Economics 455-3W Prof. Alexander Karaivanov
Seminar in Economic
Development akaraiva@sfu.ca
Spring 2011 http://www.sfu.ca/~akaraiva
Office: WMX 3629 Office Hours: Wed.
Course Outline
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, thus active student participation in class is encouraged
and rewarded. Your grade will be based on your 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 student must prepare a (powerpoint or similar) outline on a paper of their choice
from this syllabus and present it in front of the class. Finally, a short term
paper (around 12-15 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.
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. All
material covered in class, regardless of its source (articles, class notes,
text, presentations, etc.) can also appear on the exam in some form. The
remaining items on the reading list are only 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.
The textbook Development Economics by Debraj Ray, Princeton University Press, 1998, (hereafter DE) provides a basic overview of most
concepts which will be covered. However, taking class notes and participating
in the discussion would be completely sufficient for obtaining an excellent
grade in the course.
Discussion Papers and Memos
There will be a discussion
paper assigned for each week (see the reading list below). The
discussion papers are required reading. You should read them carefully and prepare
one or two question with which to participate in the class discussion.
You are also expected to
write SIX, maximum half-page long, memos/comments on different assigned
discussion papers (you can pick any six during the term). 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 must 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 may 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, Methods and Measures of
Economic Development
DE, chapter 2
Ray, D. (2000) “What’s New in Development
Economics?” manuscript,
Banerjee, A. (2008) “Big answers for big questions: the
presumption of growth policy”, MIT
Deaton, A.
(2010) “Understanding
the Mechanisms of Economic Development”, J. Econ. Perspectives
Ray, D. (2010) “Uneven Growth: A
Framework for Research in Development Economics”, J. Econ. Perspectives
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
*Jan. 19 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
*Jan. 26
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)
Banerjee, A. et al. (2010), “Targeting the Poor: Evidence from a
Field Experiment in Indonesia”, MIT (pp. 1-38)
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
Banerjee, A. and S. Mullainathan
(2010), “The Shape of Temptation: Impications for the Economic Lives of the Poor”,
working paper, MIT
*Feb. 2
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.
Hoff, K. (2000), "Beyond Rosenstein-Rodan: The Modern Theory of Underdevelopment Traps",
Annual World Bank Conference on Development Economics (pp. 1-39 only)
*Feb. 9
Discussion: Easterly, W. (2005), “Reliving the '50s: The
Big Push, Poverty Traps, and Takeoffs
in Economic Development”, CGD WP 65/2005.
READING BREAK: FEBRUARY 14-18
5. Agricultural
Organization and Productivity – Theory, Evidence, and Policy
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
*Feb. 23 Discussion: Lin, J. (1992), "Rural reforms and agricultural growth in China" Amer.
Econ. Review
6. Credit
Markets in Developing Economies
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
Credit 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
Banerjee, A. and E. Duflo (2010), “Giving Credit Where It’s Due”, working paper, MIT
Banerjee, A. and B. Moll (2009), “Why Does Mis-allocation
Persist?”, working paper, MIT
*Mar. 2 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
Udry, C., (1995) ''Risk
and Savings in Northern Nigeria'', American
Economic Review
*Mar. 9
Discussion: Townsend, R. (1995) "Consumption
Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies",
J. Econ. Perspectives
8. Microfinance
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
Morduch, J. (1999) “The Microfinance Promise” J. Econ. Literature,
37(4)
Karlan, D. (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
Cull et al. (2009), “Microfinance
meets the market”, J. Econ. Perspectives
*Mar. 16
Discussion: Armendariz, B. and J. Morduch (2004): “Microfinance:
Where Do We Stand?”, ch.
5 in Financial Development and Economic
Growth: Explaining the Links
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).
*Mar. 23
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”
Nunn, N. (2010), “The Slave Trade and the Origins
of Mis-Trust in Africa”, AER forthcoming
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
*Mar. 30
Discussion: Landes, D. (2006) “Why Europe and the West? Why
Not China?” J. Econ. Perspectives
11.
International Issues: 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
Easterly, W.
(2006) “Planners
vs. Searchers in Foreign Aid”, Asian
Development Review
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), “Where
Does 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)
*Apr. 6 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.
Alesina, A. and E. La
Montalvo, J. and M. Reynal-Querol, Ethnic Polarization, Potential
Conflict and Civil Wars , AER
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
Duflo, E. et al. (2009), “Marry for
What? Caste and Mate Selection in Modern India”, working paper, MIT
Duflo, E. and R. Chattopadhyay
(2004), “Women as Policy Makers:
Evidence from a Randomized Policy Experiment in India”, working paper, MIT
Banerjee et al. (2009), “Corruption”, working paper, MIT
Aker,
J. and
Easterly, W. and Nyarko, Y. (2008), “Is the Brain Drain Good for Africa?”, working paper