Brown University

Economics 151 – Economic Development

 

 

Administrative details

Instructor: Andrew Foster (email: afoster@brown.edu)

Office: 222 Blistein Hall

Office hours: Tues 1-3 pm or by appointment.

Teaching Assistant: Nicholas Wilson (email: Nicholas_Wilson@brown.edu)

Class time: T, Th 10:30-11:50 AM (I Hour)

Class Location: 101 Wilson Hall

Midterm: October 28, 2004 During class

Exam: December 18, 2004, 9AM

Sections: During normal lecture—apx. once every two weeks.

Web site: http://adfdell.pstc.brown.edu/ec151, login:ec151, password: provided in class

 

Overview

This course examines why some countries persistently fail to achieve high levels of growth, and the implications of this for individual well-being. Some of the questions which we will investigate include: Why do the poor in low income countries under-invest in human capital? What are the constraints on the efficient functioning of markets in these countries? Can public policy be used to improve the functioning of these markets, and thereby accelerate growth? What constrains policy decisions in low income countries? An important aim of this course is to teach you how to use both the theoretical and empirical tools of economics to investigate these questions.

 

Given the multi-faceted nature of development as a process it should be no surprise that there is some overlap between this course and other courses offered by the department:

EC0143 Economics of Population

EC0152 The Economic Analysis of Institutions,

EC0153 Health Hunger and the Household in Developing Countries,

EC0156 Economic Growth,

EC0154 International Trade.

Economics 151 is not a prerequisite for these courses but will provide relevant background and may help students identify which of these courses is most likely to be of interest.

 

Prerequisites

The formal prerequisite for this course is intermediate microeconomics. It is also recommended that students have a background in statistics and/or econometrics.

Students with concerns about their preparation for the course should speak with the instructor.

 

 

Requirements

There are a series of problems assigned in each week. Please turn the problem sets in for the previous week by the start of class on Tuesday.  There will also be a series of empirical exercises (3-4) passed out in class. Problem sets and empirical exercises will count toward 40% of the final grade for the course. The mid-term will count for 25%. The final exam will count for the remaining 35%. Class participation is expected, and will be taken into account in marginal cases.

 

Text and readings:

The text for this class is Debraj Ray’s Development Economics.  You are responsible for the material in these chapters with particular emphasis on the material discussed in class. Several other articles are also included in the syllabus. These articles will be available on the class web site.  You will not be responsible for technical material not discussed in class, but you should be able to characterize the frame of the argument used in any of the assigned readings.

 

I may make modifications/additions to the list of problem sets and readings on this syllabus. Any such modifications will be announced in a timely fashion in class. An updated copy of the syllabus will be kept on the web site, with any changes marked with a *.

 

Syllabus

 

  1. Introduction to economic development 9/7
    1. What is development?, PPP, convergence
    2. Read Ray, Chapters 1 and 2
    3. *Do Ray 2.2, 2.6, 2.9
    4. Chapter 2 handout
  2. Economic Growth (9/14)
    1. Harrod-Domar, neoclassical versus endogenous growth;
    2.  Read Ray Chapters 3 and 4
    3. Do Ray 3.2, 3.3, 3.7, 3.8, 4.2, 4.9
    4.  Chapter 3 handout
    5. Chapter 4 handout
    6. Empirical Problem Set 1
    7.   EE 1 Data Set
  3. Industrialization and Structural Transformation 9/21
    1. History, expectations, coordination failure
    2. Read Ray Chapter 5
    3. Do Ray. 5.3,5.4,5.9
  4. Inequality and Development 9/28
    1. Measuring inequality, Kuznes, distribution and growth
    2. Read Ray Chapter 6 and 7
    3. Do Ray. 6.1, 6.3, 7.1, 7.2, 7.5, 7.9, 7.11
    4. Chapter 7 handout
  5. Income and nutrition 10/5
    1. Effects of income on nutrition, effects of nutrition on income
    2. Read Ray Chapter 8
    3. Ex. 8.1, 8.3, 8.6, 8.7
  6. Education 10/12
    1. Supply and demand for schooling, child labor
    2.  “The Schools Environment”, Public Report on Basic Education in India, Chapter 3, Oxford University Press, 1999.
    3. Foster, Andrew D. and Mark R. Rosenzweig, “Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution” American Economic Review, Vol. 86, No. 4. (Sep., 1996), pp. 931-953.
    4. Education handout.
    5. Empirical Problem Set 2.
  7. Population 10/19
    1. Fertility, gender, dowries
    2. Read Ray Chapter 9
    3. Read Dreze, Jean and Amartya Sen, 1995, “Gender inequality and women’s agency”, In India: Economic Development and Social Opportunity, Chapter 7, pp140-78. Oxford University Press: Delhi.
    4. Do Ray 9.2, 9.6, 9.14
    5. Practice midterm
  8. Rural Urban Migration 10/26
    1. The Lewis model, agricultural transformation, labor markets, migration decisions, non-farm economic growth
    2. Read Ray 10
    3. Do Ray 10.3, 10.4, 10.10
    4. Foster A. and M. Rosenzweig, 2003, “Agricultural productivity growth, rural economic diversity, and economic reforms: India 1970-200” October 2003
  9. Agriculture: Land and Labor Markets 11/2
    1. Incomplete markets, the rural household, farm size and efficiency, land tenancy
    2. Read Ray 11, 12, 13
    3. Do Ray 12.3,12.8, 13.2
  10. Agriculture: Credit and Insurance Markets 11/9
    1. Read Ray 14, 15
    2. Do Ray 14.1, 14.5 ,15.6
  11. Local political economy  11/16
    1. Effects of gender mandates, democratization
    2. Foster, Andrew and Mark Rosenzweig, “Democratization, decentralization and the distribution of local public goods in a poor rural economy”, manuscript, Brown University. 2003.
    3. Chattopadhyay, R. and E. Duflo, “Women as policymakers: Evidence form a nationawide randomized experiment”, MIT 2001.
    4. Empirical Problem Set 3 (Due 12/9/04)
      1. Esther Duflo, “Grandmothers and Grandaughters: Old Age Pension and Intra-household Allocation in South Africa”,  Mansucript, MIT.
      2. South African data set  
  12. International Trade 11/16
    1. Comparative advantage, specialization, tariffs, trade policy
    2. Read Ray 16, 17, 18
    3. Do Ray 16.4,  17.8, 17.10,
  13. Corporations, Technology and Globalization 11/23
    1. Foreign direct investment, export-led growth, technology transfer
    2. Perkins et al Economics of Development Chapter 14 (on web)