Economics 455-3W Prof. Alexander Karaivanov
Seminar in Economic
Development akaraiva@sfu.ca
Fall 2008 http://www.sfu.ca/~akaraiva
Office: WMX 3629 Office Hours: Wed.
SYLLABUS
Organization
The webpage for the course
is:
http://www.sfu.ca/~akaraiva/e455.html
All course materials and
announcements will be posted on the webpage in pdf or
html format.
Grading
This is a writing-intensive,
seminar-style course, so active student participation in class will be
encouraged and rewarded. Your grade will be based on your written performance
on a final exam as well as on six short ‘memos’ / comments, on assigned
discussion papers (see below for more details). In addition, each of you will be
expected to prepare an outline and present in front of the class on a paper of
your choice from this syllabus. Finally, a short term paper (around 15
double-spaced pages) due on the last day of classes will also contribute
towards your grade. The final course grade will be determined as follows:
- class participation and presentation: 20%
of the final grade;
- six memos/comments on the discussion
papers (see the list below): 15% of
the final grade;
- final exam: 35%
of the final grade;
- term paper: 30%
of the final grade;
Note:
Barring really exceptional circumstances no make-up exams will be
permitted. If I have a reason to believe that a student has cheated on the exam
or the term paper, I will give this student a grade of F for the course. In
addition, such a student would be subject to disciplinary punishment by the
university.
Recommended (but not required) reading
Development Economics by Debraj Ray, Princeton
University Press, 1998, (hereafter DE)
The above textbook provides a basic overview
of most concepts which will be covered although taking class notes and
participating in the discussion would be sufficient for excellent performance
in the course.
In addition, various journal articles and
other reading material will be assigned, as listed below. You are only required to read the starred (*) items
on the list and material from them might be included in the final exam. The
same applies for all material covered in class, regardless of its source
(articles, class notes, text, presentations, etc.). The remaining items on the
reading list are suggested readings
aimed to deepen your understanding of the material or serve as references for
your presentation or term paper. All web-links in the reading list should be
accessible from SFU computers (including the SFU wireless network) but some may
not be accessible from off-campus.
Discussion Papers and Memos
There will be a discussion
paper assigned for each week (see the reading list below) on which you
must base your weekly memos. You are expected to write SIX, maximum
half-page long, memos/comments on the assigned discussion papers. In a given
week you can submit a comment only for
the discussion paper assigned for that
week. Comments on future or past discussion papers will receive a failing
grade. Again, you only need to submit six
comments over the whole semester. The
comment for the current week should be submitted by email to me by
To assist you, examples of
good and bad memos and some general guidelines are posted on the course
website. You are also expected to have read the weekly discussion paper and be
able to discuss it and comment on it in class. Wednesday classes will be
entirely dedicated to discussion. Participation in these discussions is part of
your final course grade.
Course Schedule
The relevant chapters from
the textbook are given in brackets. Each topic tentatively corresponds to one week
of classes, but this could change as the course progresses. I will notify you
of any changes. The most recent version of the syllabus will be always
available on the course website.
1. Introduction: Concepts and Measures of Economic
Development
DE, chapter 2
Ray, D. (2000) “What’s New in Development
Economics?” manuscript,
Stiglitz, J. (1998) "Towards
a New Paradigm for Development: Strategies, Policies, and Processes"
Hoff, K. and J. Stiglitz (2000), “Modern Economic
Theory and Development”, in Frontiers
of Development Economics: The Future in Perspective,
G. Meier and J. Stiglitz (eds),
Banerjee, A. and
Steckel, R. (2008), “Biological
Measures of the Standard of Living”, J. Econ. Perspectives
Di
Tella and MacCulloch,
(2006), “Some
Uses of Happiness Data in Economics”, J.
Econ. Perspectives
*Sep. 10 discussion: 1. Meier, G. (2005) “The New Development
Economics”, ch. 8 in “Biography of a subject: an evolution of
development economics,”
AND
2. Easterly, W. (2001), The Elusive Quest for Growth, MIT, prologue and pp. 8-15
2. Inequality and Development
DE, chapters 6, 7
Anand, S. and P. Segal, “What Do We
Know about Global Income Inequality?”, J. Econ.
Literature
Ravallion, M. (2001), “Growth, Inequality and
Poverty: Looking Beyond Averages”, World
Development
Forbes, K. (2000). "A
Reassessment of the Relationship between Inequality and Growth", AER, 90(4).
Ghatak, M. and N. Jiang (2002), “A Simple Model of Inequality,
Occupational Choice and Development”, JDE
Bjornskov, C. (2008), “The growth–inequality association: Government
ideology matters”, JDE
Banerjee, A. and
Deaton, A. (2003), “Health,
Inequality and Economic Development”, Journal
of Economic Literature
Benjamin D., L. Brandt, and J. Giles, (2005), “The Evolution of Income Inequality in Rural China ”, EDCC, 53(4)
Benabou, R. (1996), “Inequality and Growth”, NBER Macroeconomics Annual
*Sep. 17
Discussion: Bourguignon and
Morrison (2002), “Inequality
Among World’s Citizens 1820-1992”, American Economic Review
3. Poverty and Development
DE, chapter 8
Ray, D. (2000) “What’s New in Development
Economics?”, manuscript, NYU, (section 4, you can
skip the math)
Dollar, D. (2002), “Growth is Good for the
Poor”, World Bank
Chen, S. and M. Ravallion (2000), “How did the World’s
Poor Fare in the 1990s?”, World Bank
Ravallion, M. and S. Chen (2005), China’s (Uneven) Progress Against Poverty, World Bank research
paper.
O Grada,
C. (2007), “Making
Famine History”, Journal of Economic
Literature, March 2007.
Bourguignon, F. (2004), “The
Poverty-Growth-Inequality Triangle”, working paper, the World Bank
Besley, T. and R. Burgess (2003), “Halving
Global Poverty”, J. Econ.
Perspectives
Banerjee, A. and E. Duflo (2007), “Aging and Death under a Dollar a Day”,
working paper, MIT
*Sep. 24
Discussion: Banerjee, A. and E. Duflo, “The Economic Lives of the Poor”,
working paper, MIT
4. Coordination Failure and Multiple Equilibria
DE, pp. 131-154
Ray, D. (2000) “What’s New in Development
Economics?”, manuscript, NYU, (section 3)
Murphy, K., A. Schleifer and R. Vishny (1989), “Industrialization
and the Big Push”, Journal of
Political Economy
Rosenstein-Rodan, P. (1943), "Problems
of Industrialization of Eastern and South-Eastern Europe", Econ. Journal
Easterly, W. (2006), “The Big Push Déjà Vu”, Journal of Economic Literature
Bandiera, O. and I. Rasul, (2003) "Social Networks
and Technology Adoption in Northern Mozambique", mimeo.
*Oct. 1
Discussion: Hoff, K.
(2000), "Beyond
Rosenstein-Rodan: The Modern Theory of
Underdevelopment Traps", Annual World Bank Conference on Development
Economics (pp. 1-39 only)
5. Agricultural
Organization and Productivity – Theory, Evidence, and Policy
DE,
chapters 11, 12
Banerjee, A., P. Gertler and M. Ghatak (2002): "Empowerment and Efficiency
- Tenancy Reform in West Bengal"
Asuncao, J. and M. Ghatak (2003): “Can Unobserved
Heterogeneity in Farmer Ability Explain the Inverse Relationship between Farm
Size and Productivity?”, Economics Letters
Besley, T. and Burgess, R. (2000): "Land
Reform, Poverty and Growth: Evidence from India", QJE.
Shaban, R. (1987): "Testing between alternative models of sharecropping", Journal
of Political Economy
Huang J., K. Ostuka, and S. Rozelle,
“The Role of Agriculture in China's Economic Development”,
mimeo, 2005
Banerjee, A. and L. Iyer (2005), “History,
Institutions and Economic Performance: The Legacy of Colonial Land Tenure
Systems in India”, American Economic
Review, Sep. 2005
Rozelle, S. and J. Swinnen (2004), “Success
and Failure of Reform: Insights from the Transition of Agriculture"
Tokarick, S. (2008), “Dispelling
Some Misconceptions about Agricultural Trade Liberalization”, JEP
*Oct. 8
Discussion: Lin, J. (1992), "Rural reforms and agricultural growth in China" Amer.
Econ. Review
6. Credit Markets in
Developing Economies
DE,
chapter 14
Ghosh, P., D. Mookherjee and D. Ray (2000), “Credit Rationing in
Developing Countries: An Overview of the Theory”, ch.
11 in
Besley, T. (1995): "How
do Market Failures Justify Interventions in Rural Credit Markets", World Bank
Besley, T. and A. Levenson (1996), “The
Role of Informal Finance in Household Capital Accumulation: Evidence from
Taiwan”, Economic Journal
Banerjee, A. and E. Duflo (2008), “Do Firms
Want to Borrow More? Testing Creit Constraints Using
a Directed Lending Program”, working paper, MIT
Banerjee, A., E. Duflo and K. Munshi
(2003), “The (mis)-allocation of Capital”, European Economic Review
Townsend,
R. (1995), “Financial
Systems in Northern Thai Villages”, Quarterly
Journal of Economics
Townsend, R. (2004), “Credit Intermediation
and Poverty Reduction”, working paper
*Oct. 15
Discussion: Banerjee, A. (2004), “Inequality
and Investment”, working paper, MIT
7. Insurance Markets in
Developing Economies
DE,
chapter 15
Townsend,
R. (1994), “Risk
and Insurance in Village India”, Econometrica
Jacoby, H. and E. Skoufias, (1998), ”Testing
Theories of Consumption Behavior Using Information on Aggregate Shocks: Income
Seasonality and Rainfall in Rural India”, American Journal of Agricultural Economics, 80(1)
Udry, C., (1995) ''Risk
and Savings in Northern Nigeria'', American
Economic Review
*Oct. 22
Discussion: Townsend, R. (1995) "Consumption
Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies",
J. Econ. Perspectives
8. Microfinance
Ghatak, M. and T. Guinnane (1999):
"The Economics of
Lending with Joint Liability: Theory and Practice", JDE
T. Besley, S. Coate, and G.
Loury (1993): "The Economics of Rotating Savings and Credit Associations"
AER, 83
Ahlin, C. and R. Townsend (2003): "Using
Repayment Data to Test Across Models of Joint
Liability Lending"
Burgess, R. and R. Pande, (2005), "Do
Rural Banks Matter? Evidence from the Indian Social Banking Experiment"
Morduch, J. (1998): "Does
Microfinance Really Help the Poor? New Evidence from Flagship Programs in
Bangladesh", working Paper, NYU
Armendariz, B. and J. Morduch (2004): “Microfinance:
Where Do We Stand?”, ch.
5 in Financial Development and Economic
Growth: Explaining the Links
Karlan, Dean (2005), "Social
Connections and Group Banking", mimeo,
Gine. X. and D. Karlan (2006), “Group vs. Individual
Liability: A Field Experiment in the Philippines”, mimeo
Ananth, B., D. Karlan and S. Mullainathan (2007), “Microentrepreneurs and
Their Money: Three Anomalies”
Banerjee, A. and
*Oct. 29
Discussion: Morduch, J. (1999):
"The Microfinance Promise" J. Econ. Literature,
37(4)
9. Political Economy
Fernandez, R. and D. Rodrik
(1991), "Resistance
to Reform: Status Quo Bias in the Presence of Individual-Specific
Uncertainty", American Economic Review
Bourguignon and Verdier
(2000), “Oligarchy,
Democracy, Inequality, and Growth”, JDE
Alesina, A., and D. Rodrik (1994)
"Distributive
Politics and Economic Growth", Quarterly Journal of Economics
Acemoglu, D. and J. Robinson (2000), "Political
Losers As a Barrier to Economic Development",
AER
Dennis T. Yang et Cai Fang, (2000), The Political Economy of China’s Rural-Urban Divide,
working paper.
Faccio, M. (2006), “Politically
Connected Firms”, American Economic
Review, March 2006
Rodrik, D. and R. Wacziarg (2005),
“Do
Democratic Transitions Produce Bad Economic Outcomes?”,
AER, 95(2)
Persson, T. and G. Tabellini
(2006), “Democracy
and Development: The Devil in the Details”, AER 96(2).
*Nov. 5
Discussion: Roland, G.
(2002), “The Political Economy of Transition”, J. Econ. Perspectives 16(1)
10. Social Capital and
Culture
DE, pp. 155-159
*Knack, S. and P. Keefer,
(1997) “Does
Social Capital have an Economic Payoff? A Cross Country Investigation”
Alesina, A. and E. La
Narayan, D. and L. Pritchett (1997) "Cents and Sociability:
Household Income and Social Capital in Rural Tanzania"
Guiso, L., P. Sapienza and L. Zingales
(2006), “Does
Culture Affect Economic Outcomes?” J.
Econ. Perspectives
Guiso, L., P. Sapienza and L. Zingales
(2004), “The
Role of Social Capital in Financial Development” AER, 94(3)
Greif, A. (1994), “Cultural
Beliefs and the Organization of Society: a historical and theoretical
reflection on collectivist and individualist societies”, Journal of Political Economy
Sobel, J. (2002), “Can We Trust Social
Capital?”, Journal
of Economic Literature
Karlan, D. (2005), “Using
Experimental Economics to Measure Social Capital and Predict Financial
Decisions”, American Economic Review,
Dec. 2005
*Nov. 12
Discussion: Landes, D. (2006) “Why Europe and the West? Why
Not China?” J. Econ. Perspectives
11.
Policy Issues I: Institutions, Property Rights, Corruption
*North, D. (1991) “Institutions”,
Journal of Economic Perspectives
*Hall, R. and C. Jones
(1999), “Why Do Some
Countries Produce So Much More Output per Worker than Others?", Quarterly Journal of Economics
Acemoglu D., S. Johnson and J. Robinson (2001), “The Colonial
Origins of Comparative Development: An Empirical Investigation”, American Economic Review
Sokoloff, K. and
Besley, T. (1995): "Property rights and investment incentives: theory and evidence
from Ghana", JPE
Mauro, P., (1995) "Corruption
and Growth", Quarterly Journal
of Economics
Khanna,
T. and Y. Yafeh (2007), “Business
Groups in Emerging Markets: Paragons or Parasites?”,
JEL 06/2007
Djankov, S., R. La Porta, F.
Lopez-De-Silanes and A. Shleifer, (2002), "The Regulation of Entry" Quarterly Journal of
Economics, 117 (1)
*Nov. 19
Discussion: Svensson, J. (2005), “Eight
Questions About Corruption”, J. Econ.
Perspectives
12.
Policy Issues II: Trade, Globalization, Foreign Aid
DE, chapter 18
*Dollar, D.
(2001), “Globalization,
Inequality and Poverty since 1980”, World Bank
*Burnside, C. and
D. Dollar (2000), “Aid,
Policies and Growth”, World Bank
Fischer, S.
(2003), “Globalization
and Its Challenges”, American
Economic Review
Dollar, D. and A.
Kraay (2001), “Trade, Growth and
Poverty”, working paper, World Bank
Winters, L.,
Rodrik, D. (2006),
Goodbye Washington Consensus, Hello Washington Confusion?”
,
J. Econ. Literature
Easterly,
W. and T. Pfutze (2008),
“WhereDoes the Money Go?
,
J. Econ. Perspectives
Banerjee, A. and R. He (2008),
Making Aid Work
,
working paper, MIT
Chong, A. and M. Gradstein (2008),
What Determines Foreign Aid? The Donors' Perspective
,
JDE
Bourguignon, F. and M. Sundberg (2007),
Aid Effectiveness: Opening the Black Box
,
AER 97(2)
Rajan, R. and A. Subramanian (2007),
Does Aid Affect Governance?
,
AER 97(2) (use only
together with above paper by Bourguignon and Sunberg!)
*Nov. 26 Discussion: Easterly, W. (2003),
Can Foreign Aid Buy Growth?
,
J. Econ. Perspectives
Additional papers on various other topics in development that can be used for class presentations or as sources of inspiration for your term paper. These will not be covered in class unless they are chosen for presentation.
Alesina, A. and E. La Ferrara (2005),
Ethnic Diversity and Economic Performance
,
J. Econ. Literature
Montalvo, J. and M. Reynal-Querol,
Ethnic Polarization, Potential Conflict and Civil Wars
,
AER
Campos, N. and F. Coricelli (2002),
Growth in Transition: What We Know, What We Don't, and What We Should
,
JEL
Abadie, A. (2006),
Poverty, Political Freedom and the Roots of Terrorism
,
AER
Djankov, S., Y. Qian, G. Roland, and E. Zhuravskaya (2006),
Who Are China's Entrepreneurs?
,
AER
Canning, D. (2006),
The Economics of HIV/AIDS in Low-Income Countries: The Case for Prevention
,
JEP
Bosworth, B. and S. Collins (2008),
Accounting for Growth: Comparing China and India,
,
JEP
Anderson, S. (2007),
The Economics of Dowry and Brideprice
,
JEP
Stromberg, D. (2007),
"Natural Disasters, Economic Development, and Humanitarian Aid",
,
JEP
La Porta, F. Lopez-de-Silanes and A. Schleifer (2008),
The Economic Consequences of Legal Origins,
,
JEL