INAFU8145_001_2021_1 - Advanced Economic Development for Intern

INAFU8145_001_2021_1 - Advanced Economic Development for Intern


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This is an advanced course in development economics, designed for SIPA students interested in rigorous, applied training. Coursework includes extensive empirical exercises, requiring programming in Stata. The treatment of theoretical models presumes knowledge of calculus. Topics include: the economics of growth; the relationship between growth and poverty and inequality; rural-urban migration; the interaction between agrarian institutions in land, labor, credit, and insurance markets; prisoner’s dilemmas and the environment; and policy debates around development strategies. Recurrent themes: Are markets efficient, and if not, in what specific ways are they inefficient? What are the forces driving development and underdevelopment? What are the causal links between poverty and inequality and economic performance? What is the role of interventions by states or civil organizations in bringing about development? The course will integrate theoretical ideas and empirical analysis, with an emphasis on questions relevant for economic policy.



Readings marked by asterisks (*) are required. Others are recommended.


If you are at a computer in the Columbia domain, you should be able to access the articles just by clicking on the links. If you are not at a computer in the Columbia domain, you can still access the articles either just by clicking or by first searching on the Columbia library site (CLIO) for the relevant source, then clicking on the “electronic resource” links. In either case, the proxy server will ask you for your UNI and password.


Note on textbook: Although first published more than two decades ago, the textbook by Debraj Ray, Development Economics, Princeton University Press, 1998 (hereafter “Ray”), remains (in my humble opinion) the best master’s-level textbook in development economics. The theoretical discussions are still very relevant; this course will supplement the text with more recent readings and with extensive empirical exercises. The book is available online.


  1. Introduction


1.1. What is Development Economics?


* Ray, Ch. 1. (online)


1.2. Math Review


Alpha Chiang and Kevin Wainwright. Fundamental Methods of Mathematical Economics. 4th edition. New York: McGraw-Hill, 2005. Chs. 6-9, 11. (online)


  1. What is Development?


2.1. What Is the Goal?


* Amartya Sen. Development as Freedom. New York: Random House, 1999. Introduction, Chs. 1, 4. (online)

* Martha Nussbaum, Creating Capabilities: The Human Development Approach, 2011. Preface, Ch. 2. (online)


Amartya Sen. “The Concept of Development.” In H. Chenery and T.N. Srinivasan eds. Handbook of Development Economics Amsterdam: Elsevier, 1988, v. 1, pp. 9-26. (online)


2.2. Measures of Development


* Ray, Ch. 2. (online)


Lourdes Benería. Gender, Development, and Globalization. Routledge, 2003. Ch. 5 (“Paid and Unpaid Labor: Meanings and Debates”). (online)

Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi. Report by the Commission on the Measurement of Economic Performance and Social Progress. 2009, pp. 1-82. (online)


  1. Neo-Classical Growth Theory and the Convergence Debate


* Ray, Ch. 3. (online)

* William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge MA: MIT Press, 2001. Chs. 2-3. (online)


Robert Lucas. “Why Doesn’t Capital Flow from Rich to Poor Countries?” American Economic Review v. 80 no. 2, May 1990, pp. 92-96. (online)

Abhijit Banerjee and Esther Duflo (2005) “Growth Theory through the Lens of Development Economics,” Chapter 7 in Aghion and Durlauf (eds). Handbook of Economic Growth, Volume 1A. Elsevier.  Read only Section 2: “Rates of Return and Investment Rates in Poor Countries” (pp. 479-499). (online)


  1. Endogenous Growth Theory, Increasing Returns, and Poverty Traps


* Krugman, Paul (1995) “The Fall and Rise of Development Economics,” chapter 1 in Development, Geography, and Economic Theory, MIT Press. (online)

* Paul David. “CLIO and the Politics of QWERTY.” American Economic Review v. 75 no. 2, May 1985, pp. 332-37. (online)

* Kraay, Aart and David McKenzie, “Do Poverty Traps Exist?” Journal of Economic Perspectives v. 28 no. 3, Summer 2014. (online)


Ray, Chs. 4-5, Appendix 1. (online)

Paul Romer. “The Origins of Endogenous Growth.” Journal of Economic Perspectives v. 8, no. 1, Winter 1994, pp. 3-22. (online)

P.N. Rosenstein-Rodan. “Problems of Industrialization of Eastern and South-Eastern Europe.” Economic Journal v. 53, June-Sept. 1943, pp. 202-211. (online)

Kevin Murphy, Andrei Shleifer and Robert Vishny, “Industrialization and the Big Push.” Journal of Political Economy v. 97 no. 5, 1989, pp. 1003-1026. (online)


  1. Inequality and Poverty


* Ray, Chs. 6, 8. (online)

* Abhijit Banerjee and Esther Duflo (2007) “The Economic Lives of the Poor,” Journal of Economic Perspectives 21, 141-167. (online)


Martin Ravallion, “Poverty Comparisons: A Guide to Concepts and Measures.” World Bank Living Standards Measurement Studies Working Paper #88, 1992. (online)

Abhijit Banerjee and Esther Duflo, Poor Economics, Public Affairs, 2011. Ch. 1. (online)

Maitreesh Ghatak, “Theories of Poverty Traps and Anti-Poverty Policies.” World Bank Economic Review 29, S1, 2015, pp. S77-S105. (online)


  1. The Rural-Urban Interaction


* Ray, Ch. 10, pp. 345-347, 353-398. (online)


Douglas Gollin, “The Lewis Model: A 60-Year Retrospective,” Journal of Economic Perspectives, 28, 3: 71-88. (online)

Robert Bates, Markets and States in Tropical Africa, UC Berkeley Press, originally published 1981, updated and expanded edition, 2014. Introduction. (online)

John R. Harris and Michael P. Todaro. “Migration, Unemployment and Development: A Two-Sector Analysis.” American Economic Review 60, 1, March 1970, pp. 126-42. (online)


  1. Evaluation of Social Programs


* Esther Duflo, Rachel Glennerster, and Michael Kremer. (2007). “Using Randomization in Development Economics Research: A Toolkit.” In Schultz, T. P. and Strauss, J. A., editors, Handbook of Development Economics, volume 4, pp. 3895-3962. Elsevier. Read sections 1-3 and 5. (online)


Susan Parker and Petra Todd. “Conditional Cash Transfers: The Case of Progresa/Oportunidades.” Journal of Economic Literature, 55, 3, 2017, pp. 866-915. (online)


  1. Microeconomics of Agrarian Markets


* Ray, Ch. 14. (online)

* Abhijit Banerjee and Esther Duflo, Poor Economics, Public Affairs, 2011. Ch. 7. (online)


Ray, Chs. 11, 12, 13, 15. (online)

Abhijit Banerjee and Esther Duflo, Poor Economics, Public Affairs, 2011. Ch. 6. (online)

Abhijit Banerjee, Dean Karlan and Jonathan  Zinman. “Six Randomized Evaluations of Microcredit: Introduction and Next Steps.” American Economic Journal: Applied Economics, 7, 1, 2015, pp. 1-21. (online)


  1. Prisoners’ Dilemmas and the Environment


* Pranab Bardhan. “Analytics of the Institutions of Informal Cooperation in Rural Development.” World Development v. 21 no. 4, 1993, pp. 633-639. (online)


Nathaniel Keohane and Sheila Olmstead. Markets and the Environment, 2nd ed, 2016. Ch. 5. (online)

Lawrence Goulder. “Markets for Pollution Allowances: What are the (New) Lessons? Journal of Economic Perspectives, v. 27 no. 1, Winter 2013, pp. 87-102. (online)

Elinor Ostrom and Roy Gardner. “Coping with Asymmetries in the Commons: Self-Governing Irrigation Systems Can Work.” Journal of Economic Perspectives v. 7 no. 4, Fall 1993, pp. 93-112. (online)


  1. Development Strategies


* Gustavo Crespi, Eduardo Fernández-Arias, E., and Ernesto Stein, editors. Rethinking Productive Development: Sound Policies and Institutions for Economic Transformation. Inter-American Development Bank, Washington DC, 2014. Read synopsis. (online)


Ray, Ch. 16-17. (online)

Dani Rodrik. “Goodbye Washington Consensus, Hello Washington Confusion?” Journal of Economic Literature, v. 44, pp. 973-987, 2006. (online)

Amsden, Alice. Asia’s Next Giant. New York: Oxford University Press, 1989, preface, chapters 1, 6. (online)

Course Summary:

Date Details Due