Introduction to Development Economics, Spring 2017
Wednesday 8. February, 2017, 15:15-18.00
Carl-Johan Dalgaard and Henrik Hansen
Department of Economics
Agenda (for the introduction)
1. Course content
2. Learning outcome
3. Course Literature
4. Examination
5. Lecture plan
6. The exam from May 2016
Development Economics, Spring 2017
Course content
•
•
The course gives an overview of the level and changes of socioeconomic conditions, such as income, poverty, education and health in
the global south.
These conditions are put in perspective in presentations and discussions
of the major trends in classical and contemporary thinking about
economic development.
•
A broad range of topics is covered, including
• Concepts of development and well-being,
• Proximate causes of economic development
• The role of policy
•
You are exposed to current questions and historical, long-run features.
In a nutshell: Stylized facts, current economic theories
and thinking, adding some history of economic thought
Development Economics, Spring 2017
Learning Outcome:
Knowledge
•
Show overview of both the issues addressed and the basic concepts
used in development economics
•
Identify, describe and assess the measurable indicators, which are
used in socioeconomic surveys and analyses of the economic, social and
institutional situation and characteristics of developing countries.
•
Discuss theories and empirical evidence on economic inequality,
poverty and growth and their internal relationships.
•
Lay out the key elements of the more recent theories and development
models.
•
Present and discuss existing theory and empirical evidence on the
importance of human resources (health, education and population).
Development Economics, Spring 2017
Learning Outcome:
Skills
•
Select relevant micro and macro theories and empirical methods for
analyses of the current economic development issues covered in the
course.
•
Select relevant micro and macro theories and empirical methods for
analyzing development issues that are similar to the issues covered in
the course.
•
Summarize and assess theory and empirical evidence on the
economic characteristics and functions of selected markets in developing
countries.
•
Reflect upon ongoing professional debate in areas such as foreign
direct investment and foreign aid.
Development Economics, Spring 2017
Learning Outcome:
Competences
•
Ability to apply theoretical and empirical knowledge about economic
development in a competent, coherent and original way in relation to
current challenges.
Development Economics, Spring 2017
Course Literature I
Textbooks:
1. Dwight H. Perkins, Steven Radelet, David L. Lindauer and Steven A.
Block, 2013. "Economics of Development", 7th edition, W.W. Norton &
Company. Chapters 1,2, 6-10, 13, 14 and 16.
2. Debraj Ray, 1998. “Development Economics”, Princeton University
Press, Chapters 6, 7, 8, 9, 12 and 14.
3. David N. Weil, 2013. "Economic Growth", Pearson International Edition,
3rd Edition, Chapters 4, 6-10 and 13.
Development Economics, Spring 2017
Course Literature II
Journal Articles and Working Papers:
1.
Barro, R.J and Lee, J.-W. (2010). A New Data Set of Educational Attainment in the World, 1950–
2010, NBER Working Paper No. 15902, National Bureau of Economic Research.
2. Caselli, F. and Feyrer, J (2007). The marginal product of capital. Quarterly Journal of Economics,
122: 535-68.
3. Dalgaard, C.-J. and Hansen, H. (2010). Evaluating aid effectiveness in the aggregate: A critical
assessment of the evidence, Evaluation Study 2010/1, Danida, Ministry of Foreign Affairs
4. Dalgaard, C.-J. and Hansen, H. (2017). The return to Foreign aid, Journal of Development
Studies, (forthcoming)
5. Jerzmanowski, M. (2007). Total factor productivity differences: appropriate technology vs.
efficiency, European Economic Review, 51, 2080-2110. Doi:10.1016/j.euroecorev.2006.12.005
6. Jones, C. I. and Klenow, P. J. (2016). Beyond GDP? Welfare across Countries and Time,
American Economic Review, 106(9), 2426-2457.
7. Kaarsen, N., 2014. Cross-country differences in the quality of schooling. Journal of Development
Economics, 107, 215-224.
8. Lucas, R. E. (1990). Why doesn't capital flow from rich to poor countries?. American Economic
Review, 80(2), 92-96.
9. Martin Ravallion (1998). "Poverty Lines in Theory and Practice", Living Standards Measurement
Study Working Paper 133, World Bank, Washington DC.
10. Shastry, G. K., & Weil, D. N. (2003). How much of cross-country income variation is explained by
health? Journal of the European Economic Association, 1(2‐3), 387-396.
11. Vollrath, C. (2009). How Important are Dual Economy Effects for Aggregate Productivity?,
Journal of Development Economics, 88, 325-334.
12. Weil, D. N., & Wilde, J. (2009). How relevant is Malthus for economic development today?
American Economic Review, 99(2): 255-260.
Development Economics, Spring 2017
Theme I: Economic Growth, Distribution and Development
Feb. 8
CJD+HH
Economic Growth and Development
Readings: PRLB Ch. 1+2; Jones and Klenow (2016)
Feb. 15
Justin Lin Going Beyond Aid - Development Cooperation for Structural Transformation
http://www.econ.ku.dk/Kalender/andet/15022017/
Feb. 22
HH
Inequality and Development
Readings: Ray Ch. 6 and 7, Weil Ch. 13
Mar. 1
HH
Poverty
Readings: PRLB Ch. 6; Ray section 8.1, 8.2 and Appendix; Ravalion (1998).
Course Outline
Theme 2: Proximate causes of economic development
HH
The role of “Efficiency”.
Mar. 8
Readings: Weil Ch. 7, 10; Jerzmanowski (2007)
Mar. 15
CJD
Dual economies
Readings: PRLB Ch. 16; Vollrath (2009)
Mar. 22
HH
Sources of inefficiencies I: Land
Readings: Ray Ch. 12
Mar. 29
HH
Sources of inefficiencies II: Credit and interlinked markets
Readings: Ray Ch. 14.
Apr. 5
CJD
Human Resources: Population.
Readings: PRLB Ch. 7, Ray Ch. 9; Weil Ch. 4; Weil & Wilde (2009).
Apr. 12
HH
Human Resources: Education.
Readings: PRLB Ch. 8, Weil Ch. 6; Barro and Lee (2010); Kaarsen (2014).
Apr. 19
CJD
Human Resources: Health.
Readings: PRLB Ch. 9, Weil Ch. 6; Shastry & Weil (2003)
Apr. 26
CJD
Capital Resources
Readings: PRLB Ch. 10; Lucas (1990); Caselli and Feyrer (2007)
Theme 3 : The role of policy
May 3
CJD
Debt
Readings: PRLB Ch. 13 and lecture note
May 10
HH
Foreign aid
Readings: PRLB Ch. 14; Dalgaard and Hansen (2010; 2017)
May 17
CJD
Fundamental Determinants of Productivity and Historical Persistence
Development Economics, Spring 2017
Examination
Credit
Type of assessment
Aid
Marking scale
7,5 ECTS
Written examination, 3 hours under invigilation
3 hours written assignment taking place at Peter
Bangs Vej 36.
Without aids
7-point grading scale
Exam period
May 29, 2017
Re-exam
Same as ordinary, August 25, 2017.
If only a few students have registered for the reexam, the exam might change to an oral exams
with a synopsis to be handed in.
This means that the examination date also will
change.
Development Economics, Spring 2017
The Exam Questions from May 2016, A
Problem A
Please provide short answers to the following questions and statements:
1. What is the so-called “Easterlin paradox? Does it remain a paradox today?
2. Please explain what knowledge about poverty we gain from looking at the
poverty gap index in addition to the poverty headcount index
3. According to the Lewis model: Do wages grow as labor is moved into the
manufacturing sector during early phases of industrialization? Why/Why not?
4. Please explain briefly why the presence of limited liability may lead a landlord
to prefer sharecropping over fixed rent tenancy.
5. What are "population optimists" and "population pessimists"? Provide two
theoretical arguments in favor of either view.
6. Please sketch a survival curve for a poor and a rich country, respectively.
7. Please give three different motivations for providing foreign aid
Development Economics, Spring 2017
The Exam Questions from May 2016, B
Problem B
Please explain how growth accounting and development accounting can be used
to illustrate the relative importance of factor accumulation and productivity
growth in the process of economic development. Specifically,
•
illustrate how development accounting decomposes relative income
differences into factors of production and productivity and discuss the relative
order of magnitude observed across countries;
•
illustrate how productivity can be further decomposed and discuss ideas for
such a decomposition of productivity gaps;
•
give a brief account of obstacles to technology transfers from rich to poor
countries; and finally
•
give a brief account of different types of inefficiencies one may encounter
across the world.
Development Economics, Spring 2017
The Exam Questions from May 2016, C
Problem C
Please describe and discuss the role of education in economic development.
Specifically, describe
•
the importance of education for production and well-being;
•
the educational attainment across developing countries over the past 20
years;
•
the private costs and benefits of education and the methods used to estimate
the return to education;
•
issues with the quality of schooling and some possible explanations of the
variation in the quality of schooling.
Development Economics, Spring 2017
Lectures and Classes
•
The course has meetings every Wednesday 15.15-18.00 (3-6pm)
•
The first 45 minutes are for student work (discussions, writing) on
review questions, covering the material from the previous week
•
The review questions from the 13 sessions will give a pool of questions
for problem A, of which we select 7 for the actual exam
•
The last 2x45 minutes are for classical lectures by CJD and HH, covering
the topics indicated in the schedule.
Development Economics, Spring 2017