Development Economics, Winter 2011 Thomas Gall tgall@uni-bonn.


Office Hour: Wed, 11–12 Lenn´ estr. 35 Second Floor

Development Economics for Bachelor Students The course presents current theories of poverty and underdevelopment, for instance those emphasizing links to financial market frictions, inequality, health, political economy, and institutions, as well as their empirical support. Policies that seek to address these issues will be considered, with a special emphasis on empirical evaluation of their efficacy. The course will follow a problem based approach, presenting methodological background (growth theory, some contract theory, instrumental variables estimation and randomized controlled trials) as it is needed. Classes will be taught in English. Presentation slides will be made available on the internet after class and most of the lectures are covered in one of the textbooks. Textbooks: (*) Ray, Debraj: 1998, Development Economics. Princeton University Press. Todaro, Michael P., and Stephen C. Smith: 2011, Economic Development (11th ed.). Pearson Education.

Plan of the Term and Syllabus
A list of articles follows that will be covered (or touched on) in the lecture. Note that these articles are not required reading but rather additional background material. Material that is substantially used in the lecture and might therefore be considered particularly useful for studying is indicated by a star (*). 10.10.: Introduction (*) Banerjee, A. V. and E. Duflo: 2007, ‘Economic Lives of the Poor’. Journal of Economic Perspectives 21(1), 141–167. (*) Banerjee, A. V. and E. Duflo: 2008, ‘What is Middle Class About the Middle Classes Around the World?’. Journal of Economic Perspectives 22(4), 3–28. Besley, T. and R. Burgess: 2003, ‘Halving Global Poverty’. Journal of Economic Perspectives 17(3), 3–22. 1

V.10. Princeton Chapters 1. Hsieh. 12. 385–472. MIT Press. (*) Banerjee. WIDER Lecture. W. P. Sala-i-Martin: 1999. Shleifer. The World Bank. (*) Mankiw. Duflo: 2005. D.: Economic Growth and Convergence (*) Chapters 3-5 in Ray (1998). Vishny: 1989. K. Review of Economic Studies 71(1). and M. Vol. Ravallion: 2004. 1003–1026. Journal of Development Economics 75(1). ‘Misallocation and Manufacturing TFP in China and India’. Weil: 1992. J. Policy Research Working Paper Series 3341. C. Aghion and S. and P. 202-211. Interpretations and Policies’. 19–42. ‘The Dual role of Market Power in the Big Push: From Evidence to Theory’. and K. 2 . Journal of Political Economy 97(5). ‘How Have the World’s Poorest Fared Since the Early 1980s?’. A. N. C.: 2006. ‘Global Patterns of Income and Health: Facts. In: P. V. S. ‘How Efficiently is Capital Allocated? Evidence from the Knitted Garment Industry in Tirupur’.. 473–552. and D. Durlauf (eds. A. N. R. F. ‘Accounting for Cross-Country Income Differences’.N: 1943. D. pp. In: P. pp. and X. Quarterly Journal of Economics 124(4). 1A. Romer. Economic Journal 53(210). Aghion and S.: 2004. A. Klenow: 2009. A. (*) Deaton. ‘Industrialization and the Big Push’.. ‘A Contribution to the Empirics of Economic Growth’.): Handbook of Economic Growth Vol. and E. G. 1. Caselli.10. to 19. de Fontenay. M. ‘Growth Theory Through the Lens of Development Economics’. Development Economics. Economic Growth. 407– 437. University Press. Rosenstein-Rodan. ‘Problems of Industrialisation of Eastern and Southeastern Europe’. and R.-T. North-Holland. C. 1403–1448. Durlauf (eds..: 2005.Chen.): Handbook of Economic Growth. Amsterdam: Elsevier. (*) Banerjee. Quarterly Journal of Economics 107(2). 221–238. N.: 1998. Munshi: 2004. 4 and 5 in Barro. (*) Murphy.

3. ‘Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed Lending Program’.11. T. P.24.. American Economic Review 83(4). 14. 329–349. Eighth World Congress.5 in Ray (1998) Aleem. 195–228.1-14. and S. 14. Murdoch. 3 . O. ‘The Economics of Rotating Savings and Credit Associations’. 7.: 2003. Journal of Economic Perspectives 23(1). 1–46. L. Coate. ‘The Microfinance Promise’. Cull. A. V. Zeira: 1993. ‘The Economics of Lending with Joint Liability: Theory and Practice’.: Health and Education (*) Chapter 8. W.3. Journal of Development Economics 60(1). and J.: Tutorial Class 9. Loury: 1993. J.11. R. Besley. C.. Demirguc-Kunt: 2009. 274–298. V. 35–52.): Advances in Economics and Econometrics. 167–192. A. M. ‘Income Distribution and Macroeconomics’. Cambridge: Cambridge University Press. and G. Duflo: 2008. and T. In: M. Journal of Economic Literature 37(4). Banerjee.10. Hansen. to 2. to 16. Newman: 1993. Credit Markets and Economic Development’.2.11. (*) Galor. A.4 in Ray (1998). ‘Imperfect Information. Guinnane: 1999.: 1999. Journal of Political Economy 101(2). Banerjee. MIT Working Paper. (*) Ghatak.: Tutorial Class 26.8-9. ‘Microfinance Meets the Market’. J.: 1990. Review of Economic Studies 60. I. and E. World Bank Economic Review 4(3). Turnovsky (eds. and A.: Imperfect Capital Markets and Micro Finance (*) Chapter 7. Chapter 8 in Todaro and Smith (2011).11. J..-8. and A. S. F. 1569–1614. Volume III. pp. V. Screening and the Cost of Informal Lending: A Study of a Rural Credit Market in Pakistan’. ‘Occupational Choice and the Process of Development’. Morduch. (*) Banerjee.4 and 13. ‘Contracting Constraints. 792–810. Dewatripont.10.

American Economic Review 93(4). Munshi. Journal of Economic Literature 46(3).12. 159-217. 795–813. S. and A. Rosenzweig: 2006. Subramanian. and Schooling Choice in a Globalizing Economy’. R.: Tutorial Class 23. (*) Pande. S. A. and Durable Inequalities’. ‘Can Mandated Political Representation Provide Disadvantaged Minorities Policy Influence? Theory and Evidence from India’. ‘Measuring Discrimination in Education’. ‘The Demand for Food and Calories’. Economic Literature 41(1). Review of Economic Studies 77(4). American Economic Review 94(2). M.11. Hanna.. Chattopadhyay. ‘The Role of Cognitive Skills in Economic Development’. and P.P. 326–330. Gender. Pandey: 2006. R. to 5. American Economic Review 91(4). K. Hanushek. Discrimination (*) Anderson. Deaton. ‘Health. 4 . ‘Missing Women: Age and Disease’. Ethnicity. 21. Miguel: 2004.11. K. Duflo: 2004. 607–668 (*) Schultz. Ray: 2010.: 2004. Woessmann: 2007. ‘Discrimination. and E. Health. A. A. 199–250. Deaton. Journal of Political Economy 104(1). and L. E. Econometrica 72(1).: Gender. Deaton: 1996. ’Women as Policy Makers: Evidence from a Randomized Policy Experiment in India’. Econometrica 72(5). and E. T. Inequality and Economic Development’. Hoff. ‘School Subsidies for the Poor: Evaluating the Mexican Progresa Poverty Program’. E. American Economic Review 96(4). 113–158. Social Identity. American Economic Review 96(2). Linden: 2009. and Health Services in Rural Rajasthan’.: 2003.: 2001. and M.: 2003. NBER Working Paper 15057. and L. 1132–1151. and E. (*) Kremer. R. and D. ‘Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment’. 1225–1252. Journal of Development Economics 74. ‘Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities’.Banerjee. ‘Wealth. Duflo: 2004. 206–211. Journal of Duflo. 1262–1300. ‘Traditional Institutions Meet the Modern World: Caste. 133–162. 1409–1443.

Quarterly Journal of Economics 123(1). A. and K. L. D. In: A.(*) Qian. Quarterly Journal of Economics 118(5). D. ‘Do Institutions Cause Growth?’. S. Chapt. A. Journal of Economic Growth 9(3). Mookherjee. Banerjee. ‘Factor Endowments.12. ‘Colonialism.12. 1190–1213. V. Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India’. 587–588 7. and K.. Rodrik.. S. 1231–1294. and L. D. and J. N. L. (*) Engerman. ‘Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development’. and A. La Porta. D.. and J. Economia 3.: 2008.. Engerman. 271–303. Robinson: 2001. Subramanian and F. D. Quarterly Journal of Economics 123(3). E.12. N. to 19. Sokoloff: 2006.: 1990. Robinson: 2002. and Long-run Paths of Development’. 131–165. ‘The Colonial Origins of Comparative Development: An Empirical Investigation’. Trebbi: 2004. American Economic Review 91(5). 41–109. Journal of Economic Growth 9(2). L.: Institutions (*) Acemoglu. 139–176. Acemoglu. ‘Missing Women’.): Understanding Poverty. ‘Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution’. Institutions: Institutional Change and Economic Performance.:1992. Oxford University Press. ‘Missing Women and the Price of Tea in China: The Effect of Sex Specific Earnings on Sex Imbalance’. American Economic Review 95(4).: Tutorial Class 12. B´ enabou (eds. ‘The Long Term Effects of Africa’s Slave Trades’. F. Shleifer: 2004. North. Banerjee. Sokoloff: 2002. S. 3. L. 1251–1285. V. Inequality. S. and R. Cambridge University Press. R. British Medical Journal 304. A. A. Lopez-de-Silanes. Glaeser. and Paths of Institutional and Economic Development among New World Economies’. Iyer: 2005. L. 5 . Inequality. 1369–1401. Johnson. Sen. (*) Nunn. ‘History. A. C.: 2008. Johnson.

Mauro. 18. 1–27. ‘Corruption and Growth’. P. Djankov.: 1996.: Political Economy and Corruption Chapter 7. M. C. Quarterly Journal of Economics 109(2).: Optional Topic 1. R.: 1995. (*) Olken. 681–712. to 16. Bugess: 2004.1. A. and G. Persson. ‘Monitoring Corruption: Evidence from a Field Experiment in Indonesia’. Journal of Economic Bertrand. to 30. ‘Do Democracies Have Different Public Policies than Nondemocracies?’.5-6 in Ray (1998) (*) Alesina. Quarterly Journal of Economics 110 (3). Tabellini: 2008. American Economic Review 84(3). Mullainathan.1. Besley. and G. S. Quarterly Journal of Economics 119(1). ‘Distributive Politics and Economic Growth’. and R. Hanna and S.1.. Quarterly Journal of Economics 122(4). ‘The growth effects of democracy: Is it heterogenous and how can it be estimated?’. T. Tabellini: 1994. Vishny: 1993.W.: Tutorial Class 6 . A.: Tutorial Class 23. Journal of Political Economy 115 (2).1. In: E. 600–621. ‘Obtaining a Driving License in India: An Experimental Approach to Studying Corruption’.1. Harvard University Press.2. and R. Persson. ‘Corruption’. 599–617. Mulligan. Sala-i-Martin. Quarterly Journal of Economics 108(3). 91-134. ‘Democracy and Economic Growth’. (*) Shleifer.: 2007. Rodrik: 1994. T. 51–74.: Tutorial Class 9. R.): Institutions and Economic Performance. B. B. X. and R. and D. 200-249. ‘Is Inequality Harmful for Growth?’. T.. Gil: 2004. 465–490.12. Helpman (ed.21. Journal of Economic Perspectives 18(1). Growth 1(1). Barro. ‘Can Labor Regulation Hinder Economic Performance? Evidence from India’.2. 1639–1676. J.

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