Development Economics

Semester and Year Offered: Monsoon semester/ 2nd Year

Course Coordinator and Team: Dipa Sinha

Email of course coordinator: dipa@aud.ac.in

Pre-requisites:

Aim: This course introduces the concept of development and different approaches to development that have been dominant in the development economics literature. It discusses the contemporary challenges facing developing countries in the age of globalisation through a comprehensive discussion of the thinking on and experience of Third World development since the mid-twentieth century, and the continuities and changes in their situations. There is a special emphasis on understanding processes of structural transformation and the challenges of employment generation. It examines the nature and extent of economic inequality and poverty at the national and household levels and provides a foundation in issues related to poverty in developing countries. The aim of this course is also to expose students to the contemporary discussions in the field of development economics and policy.

Course Outcomes:

At the end of the course the student will:

1. Discover the origins of the discipline of Development Economics and the various streams within it
2. Interpret different measures/indicators of development including HDI, MPDI etc.
3. Examine the problem of unemployment in developing countries in the age of globalisation
4. Explain the relationship between inequality, poverty and growth
5. Compare different methods of estimation of poverty at global and national levels
6. Evaluate policies for poverty alleviation and social protection
7. Critique development policies especially those related to education and health

Brief description of modules/ Main modules:

1. Development: Issues and Approaches

This module introduces the student to the main approaches in Development Economics that were dominant during different periods of time starting from the origins of the discipline in the 1940s and 50s to the present times. It includes a discussion on defining and measuring development, the challenge of structural transformation and employment generation, especially in the context of the globalised world. The following are the topics covered:

• Introduction to and Emergence of the Discipline
• Definition and Measurement
• Development and Structural Change
• Globalisation and Development

2. Inequality and Poverty

In this module, two main themes are discussed – the relationship between Inequality, Growth and Development and secondly, understanding the debates in defining and measuring poverty. Starting with Kuznets’ work on the relation between inequality and growth, this module discusses the links between inequality and structural change (employment) in relation to the topics in the previous module. It moves on to look at the issue of poverty and its relation to growth and inequality.

3. Gender and Development

In this module on gender and development students are given an introduction to three main themes: (1) Approaches to gender in development economics (WID, WAD, GAD) (2) Gender and employment, gendered labour markets (3) Intrahousehold decision making, unpaid work burdens on women. How all of these are related to each other and in turn also related to the present context of neoliberal policies is also discussed.

4. Education, Health and Other Public Services

As a part of understanding policy initiatives for development, this module looks at the some of the current literature and debates in development economics around provision and financing of public services, social protection etc.

5. Critiques and alternatives – Some Policy Debates

This short module is included in the course to give the students an opportunity to discuss latest policy debates. For example, to familiarise themselves with the literature on universal basic income, role/utility of randomised control trials in framing policies and so on.

Assessment Details with weights:

Book Review: 20%; Term Paper: 35%; Presentation: 20%; End-Semester Examination: 25%

The book review would be related to a recent academic book in the field of Development Economics. It will familiarise the students with the contemporary thinking in the discipline and train them to critically read literature.

In the term paper and presentation, the emphasis would be on developing the ability to formulate a small research question within a given broad topic, developing an attitude of independent thinking and learning how to assimilate material from multiple sources to present a coherent argument.

The end-semester examination would examine the students for their understanding of methods and approaches taught and their application to the range of development issues discussed in the course.

Reading List:

CONCEPT OF DEVELOPMENT

A. Introduction to and Emergence of the Discipline

1. Prabhat Patnaik, “Why Development Economics”, in The Pioneers of Development Economics: Great Economists on Development, edited by Jomo KS, pp. 62-73 (New Delhi: Tulika Books, 2006)
2. Gilbert Rist, The History of Development: From Western Origins to Global Faith, chapter 1. (London and New York: Zed Books, 2002)

B. Definition and Measurement

1. World Development Report, 2014
2. http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTNWDR2013/0,,contentMDK:23459971~pagePK:8261309~piPK:8258028~theSitePK:8258025,00.html
3. Human Development Report, 2013, Technical Notes http://hdr.undp.org/en/2013-report
4. Alkire, Sabina (2010): “Human Development: Definitions, Critiques and Related Concepts”, Oxford Poverty and Human Development Initiative (OPHI), Working Paper No. 36 (Oxford: University of Oxford)
5. Sen, Amartya K (1999): Development as Freedom (New Delhi: Oxford University Press).
6. Amartya Sen, “Development: Which Way Now?”, Economic Journal, 93 (372): 745-762 (1983)

C. Development and Structural Change

1. C. P. Chandrasekhar, “Gerschenkron and Late Industrialization”, in The Pioneers of Development Economics: Great Economists on Development, edited by Jomo KS, pp. 181-192 (New Delhi: Tulika Books, 2006)
2. Kari Polanyi Levitt, “Raul Prebisch and Arthur Lewis: The Two Basic Dualities of Development Economics”, in The Pioneers of Development Economics: Great Economists on Development, edited by Jomo KS, pp. 193-208 (New Delhi: Tulika Books, 2006)
3. Amit Bhaduri, “Structural Change and Economic Development: On the Relative Roles of Effective Demand and the Price Mechanism in a ‘Dual’ Economy”, in Rethinking Development Economics, edited by Ha-Joon Chang, pp. 219-233 (London and New York: Anthem Press, 2003)
4. Alfredo Saad-Filho, “The Rise and Decline of Latin American Structuralism and Dependency Theory”, in The Origin of Development Economics: How Schools of Economic Thought Have Addressed Development, edited by Jomo KS and Erik S. Reinert, pp. 128-145 (New Delhi: Tulika Books, 2005)
5. Lewis, A. (1954): ‘Economic Development with Unlimited Supplies of Labour’, The Manchester School of Economic and Social Studies, Volume 23, Number 2, pp. 139-91.
6. Ha-Joon Chang and Ilene Grabel (2004), Reclaiming Development: An Economic Policy Handbook for Activists and Policymakers
7. Heintz J (2009) Employment, Economic Development, and Poverty Reduction: Critical issues and policy challenges, Background paper prepared for UNRISD flagship report on Poverty, Geneva
8. Ghosh, Jayati (2008). ‘Growth, macroeconomic policies, and structural change’ Background paper prepared for UNRISD flagship report on Poverty, Geneva

D.Globalisation and Development

1. Amit Bhaduri and Deepak Nayyar (1996) The Intelligent Persons Guide to Liberalisation, Penguin India, New Delhi.
2. Milanovic, B. (2003). ‘The two faces of globalization: against globalization as we know it’. World Development 31 (4), pp. 667-683
3. Dani Rodrik, “Goodbye Washington Consensus, Hello Washington Confusion?”, Journal of Economic Literature, XLIV: 973-987 (2006)
4. Joseph Stiglitz, Towards a New Paradigm of Development: Strategies, Policies, and Processes, 9th Raul Prebisch Lecture, UNCTAD (1998)
5. Ha-Joon Chang (2007) The Myth of Free Trade and the Secret History of Capitalism

2. Inequality and Poverty

A. nequality, Growth and Development

1. Easterly, W. ‘Inequality does cause under development: insights from a new instrument’, Journal of Development Economics 84(2) 2007, pp.755–76.
2. Kuznets, S. (1955), ‘Economic Growth and Income Inequality’, American Economic Review, Vol.45, pp.1-25.
3. Milanovic, Branko. 2002. “Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Budget Surveys." World Bank Policy Research Working Paper 2876.
4. Milanovic, B. (2005). Worlds Apart. Measuring International Inequality. Princeton: Princeton University Press.
5. Bourguignon, F (2003): The Poverty-Growth-Inequality Triangle

B. Defining and Measuring Poverty

1. Subramanian S (2012): The Poverty Line, Oxford University Press
2. Chen, S. and M. Ravallion (2010): ‘The developing world is poorer than we thought, but no less successful in the fight against poverty’, Quarterly Journal of Economics 125(4) 2010, pp.1577–625
3. Reddy, Sanjay (2008) “The World Bank’s new poverty estimates: Digging deeper into a hole”.
4. Banerjee, A. and E. Duflo. (2006). “The Economic Lives of the Poor”, Journal of Economic Perspectives, 21(1), 141-167.
5. Ravallion, M. (2005). “A Poverty –Inequality trade off ?”, World Bank Policy Research Working Paper 3579, April

3 Gender and Development

1. Agarwal, Bina. A Field of One’s Own: Gender and Land Rights in South Asia, Cambridge University Press, 1994.
2. Elson, D. (1990) “Male Bias in the Development Process: An Overview”, in Diane Elson(ed) Male Bias in the Development Process, Manchester: Manchester University Press, pp. 1–15.
3. Agarwal, B. (1997) “Bargaining and Gender Relations: Within and Beyond the Household”, Feminist Economics, spring, pp. 1–25.
4. UN Women (2015): Progress of World’s Women
5. Sen, A. (1990) “More than 100 million women are missing”, http://ucatlas.ucsc.edu/gender/Sen100M.html
6. Deaton, Angus. "Looking for boy-girl discrimination in household expenditure data." The World Bank Economic Review 3, no. 1 (1989): 1-15.
7. Clots-Figueras, Irma. "Women in politics: Evidence from the Indian States." Journal of Public Economics 95, no. 7 (2011): 664-690.

4. Education, Health and Other Public Services

1. Sen, Amartya (1995): “The political economy of targeting”, in van de Walle and Nead (eds.), Public Spending and the Poor: Theory and Evidence, Johns Hopkins University Press, Baltimore, MD.
2. Reeves A, Gourtsoyannis Y, Basu S, McCoy D, McKee M, Stuckler D. Financing universal health coverage—effects of alternative tax structures on public health systems: cross-national modelling in 89 low-income and middle-income countries. Lancet 2015
3. Savedoff WD, Bitrá n R, De Ferranti D, et al. Transitions in health financing and policies for universal health coverage: final report of the transitions in health financing project. Washington DC: Results for Development Institute, 2012.
4. Gertler, Paul, and Simon Boyce. "An Experiment in Incentive-Based Welfare: The Impact of PROGESA on Health in Mexico." Working Paper, April 2001.
5. Subramanian, S, and A. Deaton. (1996). “The Demand for Food and Calories,” Journal of Political Economy, 104(1), 133-162.

5. Critiques and alternatives

1. Arturo Escobar, Encountering Development: The Making and Unmaking of the Third World, pp. 21-54 (Princeton: Princeton University Press, 1995)
2. Michael J. Watts, “Theory and Practice and the Crisis of Development”, in Power of Development, edited by Jonathan Crush, pp. 44-61 (London and New York: Routledge, 1995)
3. Abhijit Banerjee and Esther Dulfo (2011) Poor Economics: A Radical Rethinking of the way to Fight Global Poverty, (New York: Public Affairs)

ADDITIONAL REFERENCE: