Syllabus
Primer text: Ray Debraj (1998): Development economics. Princeton University Press. (available in the library)
The text is supplemented by a packet of recent articles and book chapters. You can download them via the intranet (Moodles). It is crucial that you use Moodles (https://dl1.cuni.cz/course/view.php?id=855). It is a platform where you can find important dates, download slides, referenced papers and tasks for exercise sessions. Each of you will get access to the account of this subject. The key is “eldc”.
Outline of the course
Lecture 1: Introduction
Topics
Why to study economic development?
Course: approach, structure and requirements
Historical and geographical overview
Economic lives of the poor
Literature
Ray Debraj (1998): Development Economics, ch.1-2, pp. 2-42.
Todaro and Smith (2004): Economic Development, ch. 1-2, pp.3-71. Library folder.
J. Bradford De Long, “Main Themes of Twentieth Century Economic Development,” University of California, Berkeley, pp. 1 – 10.
Banerjee, A. and E. Duflo (2006): Economic lives of the poor. Journal of Economic Perspectives
Banerjee A. and E. Duflo (2008): What is middle class about the middle classes around the world? Journal of Economic Perspectives
Lectures 2-3: Traditional growth models and poverty traps
Topics
Harrod-Domar model
Solow model
Convergence
Poverty traps: savings trap, capital threshold
Policy implications of poverty trap models
Literature
Ray Debraj (1998): Development Economics, ch.3, pp. 47-90.
Sachs, Jeffrey, et al. (2004): Ending Africa' s Poverty Trap, Brookings Papers on Economic Activity, Issue 1, 2004 pp. 117-130.
De Mel, McKenzey, Woodruff (2008): Returns to capital in microenterprises: evidence from a field experiment. Quarterly Journal of Economics
Lecture 4: Technology adoption and complementarities
Topics
Complementarities and coordination failure
Increasing returns
Literature
Ray, D. 1998: Development Economics. ch. 5, pp. 131-159.
Rosenstein-Rodan (1943): Problems of industrialization of Eastern and Southeastern Europe. The Economic Journal, Vol. 53, No. 210/211. (Jun. - Sep., 1943), pp. 202-211.
Todaro and Smith (2004): Economic Development, ch. 5, pp.170-5. Library folder.
Dulfo, Kremer and Robinson (2006): Why don't farmers use fertilizers: Evidence from field experiments in Kenya. American economic review
Seminar 1 (exercises) – growth models and complementarities
Lecture 5-6: Population, poverty and under-nutrition
Topics
Population: basic concepts
Demographic transition and hidden momentum
Poverty measures and evidence
Poverty, nutrition and discrimination
Literature
Ray, D. 1998: Development Economics. ch. 8-9, pp. 249-338. Library folder.
Todaro and Smith (2004): Economic development, ch.7. Library folder.
Jensen and Miller (2008): Giffen behavior and subsistance consumption. American economic review.
Strauss, John (1986): Does better nutrition raise farm productivity? Journal of political economy.
Miguel, E. and M. Kremer. 2004. „ Worms : Identifying Impacts on Education and Health in the Presence of Treatment Externalities “. Econometrica 72: 159-217.
Field, Robles and Torero: The cognitive link between geography and development: Iodine deficiency and schooling attainment in Tanzania, working paper
Sen, A. (1992): Missing women. BMJ 1992;304: 586-7(free registration required).
Sen, A. (2002): Missing women- revisited. BMJ 2003;327:1297-1298 (6 December) (free registration required).
Miguel (2004): Poverty and witch killing. Review of economic studies.
Qian (2008): Missing women and the price of tea in China. Quarterly journal of economics.
Seminar 2 (exercises) – poverty lines, population growth
Lecture 7: Education
Topics
Benefits of greater education
Barriers of increasing education
Why are field experiments a powerful tool to figure out what policy interventions work?
Evaluations of different types of interventions: supply side and demand side
Literature
Ray, D. 1998: Development Economics. ch. 4, pp. 100-107
Psacharopoulos, George (1991): The Economic Impact of Education: Lessons for Policymakers. In Meier and Rauch (eds.) (2005), pp. 189-193.
E. Duflo, M. Kremer and R. Glennerster (2006): Using Randomization in Development Economics Research: A Toolkit. In Schultz and Strauss (2008): Handbook of Development Economics, volume 4.
E. Duflo: Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment
Glewwe, P., Ilias, N., & Kremer, M. (2010). Teacher incentives. American Economic Journal: Applied Economics, 2(3), 205–227.
Jensen, R. (2010). The (perceived) returns to education and the demand for schooling. The Quarterly Journal of Economics, 125(2), 515-548.
Barrera-Osorio, F., Bertrand, M., Linden, L. L., & Perez-Calle, F. (2011). Improving the Design of Conditional Transfer Programs : Evidence from a Randomized Education Experiment in Colombia. American Economic Journal: Applied Economics, 3(2), 167–195.
Seminar 3 (discussion seminar): Education
Papers to read (also pick one and write a summary before the seminar)
Banerjee and Duflo (2011). Poor economics . chapter 1 - Think again, again
Glewwe, Kremer and Moulin (2007): Many children left behind? Textbooks and test scores in Kenya.
Duflo, E. and R. Hanna (2005): Monitoring works: Getting teachers to come to school. NBER working paper 11880
Lecture 9: Microcredit and asymmetric information
Topics
The poor: un-bankable?
Adverse selection and credit rationing
Moral hazard and credit rationing
Microcredit innovation and its key characteristics
Measuring adverse selection and moral hazard
Literature
Armendariz DeAghion and Morduch (2005): Economics of microfinance. MIT, ch. 1-2, pp. 1-52. Library folder.
Karlan and Zinman (2007): Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment. Econometrica.
Seminar 5 (discussion seminar): Microfinance
Papers to read (also pick one and write a summary before the seminar)
Banerjee, Duflo, Glennerster and Kinnan (2009): The miracle of microfinance? Evidence from a randomized evaluation. AEJ: Applied
Karlan and Zinman (2011): Microcredit in Theory and Practice: Using Randomized Credit Scoring for Impact Evaluation. Science.
Karlan, D. and X. Gine (2006): Group Versus Individual Liability: A Field Experiment in the Philippines.
Lecture 10: Institutions and corruption
Topics
Overview: corruption and development
Parasite and productive enterprises
Informal property rights and “mystery of capital”
Literature
Pande, Rohini (2008): Understanding Political Corruption in Low Income Countries. In Schultz and Strauss (2008): Handbook of Development Economics, volume 4.
Bowles, Durlauf and Hoff (2006): Poverty traps. Princeton University Press. p. 79-94.
DeSoto, Fernando (2000): The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Basic Books. Ch1, 3.
Seminar 6 (exercises) – Microfinance
Lecture 11: Psychology of poverty
Topics
Does poverty increases impatience?
Does poverty impair cognitive function and increases stress?
How does stress and lower cognitive function affect decision-making?
Literature
Mani, S. Mullainathan, E. Shafir, J. Zhao, Poverty impedes cognitive function. Science 341(6149), 976-980 (2013).
Haushofer, J., & Shapiro, J. (2013). Household Response to Income Changes: Evidence from an Unconditional Cash Transfer Program in Kenya. Working paper
Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Science (New York, N.Y.), 344(6186), 862–7. doi:10.1126/science.1232491
Lerner, J. S., Li, Y., & Weber, E. U. (2013). The financial costs of sadness. Psychological Science, 24(1), 72–9. doi:10.1177/0956797612450302
Bartos, V., Bauer, M., Chytilova, J. and Levely, I. (2017): Does poverty inhibit attention or self-control? Experimental evidence on behavioral sources of impatience among the ultra-poor. Working paper
Seminar 7 (exercise): Institutions
If time allows: Lecture 12: Heath: Lessons about pricing from RCTs
Topics
Demand for health products: shall health products be subsidized?
Literature
Kremer, M
Annotation
The course covers several major topics in development economics. It focuses on concepts that are important for understanding causes of under-development and poverty.
After introducing traditional growth models, particular attention is devoted to the role of technological complementarities, population growth, human capital, institutions, access to finance and psychological effects of poverty. We will also extensively discuss how the existing empirical evidence speaks to some of the key issues.
Most of the evidence will be based on field experiments.