ECON : Economic Development
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1 ECON : Economic Development Amit Basole SPRING 2013 Class Time and Location: T, Th, 2:00-3:15 pm, W Office Hours: W-05-77, T: 1:00-2:00pm, Th: 12:00-2:00pm Course Wiki Page: 1 Overview The problems of economic development are urgent, exciting, and complex. Although economic development is often equated with a growth in Gross Domestic Product (GDP), in fact it encompasses economic, social, cultural, political, and environmental spheres. Can sub-saharan Africa overcome its dependence on agricultural exports and become industrialized? What is the role of the government in facilitating development? Are poor countries really indebted to rich countries or is it the other way around? What determines whether the benefits of economic growth will be widespread or limited to a narrow section of society? This course is about these and many more questions. We will take a pluralistic approach and learn how development is viewed within different schools of economic thought such as neo-classical, Keynesian, and Marxist. 2 Objectives By the end of the course, you will be able to: Explain why some countries are rich and others are poor. Gain a qualitative as well as quantitative understanding of the development process. Appreciate that there is vigorous debate around both means and ends of the development process. Understand the interrelationships between economic growth, poverty and inequality. See the promises as well as pitfalls of globalization. Argue the limitations of market-based as well as State-based approaches to development. 3 Textbook and 1. The main textbook is The Process of Economic Development by James M. Cypher and James L. Dietz (3rd edition) (henceforth PED). It is available for purchase in the UMB bookstore. A copy is also on print reserve in the Healey Library. 2. In addition to this required readings will be drawn from various books and journals and will be made available on the course wiki page. Following are some books from which we will read several chapters. You are not required to purchase these books. 1
2 Development Economics, Debraj Ray, Princeton University Press (henceforth DE). A copy is on reserve in Healey Library. Poor Economics by Abhijit Banerjee and Ester Duflo (henceforth PE) The Elusive Quest for Growth by William Easterly (henceforth EQG) 4 Classroom Conduct and Accommodations Academic Honesty University policies on academic honesty will be enforced in this class. There will be a zero-tolerance policy for plagiarism and cheating. Plagiarism refers to unacknowledged reproduction of writing from other authors, for example copying from internet sources or any other written material from the syllabus or outside it, without referring to the source of the text. Cheating refers to copying text from fellow students. A student found practicing either will automatically receive a grade of zero for that assignment. If plagiarism occurs more than once, you may fail the class. If you are unclear on the standards for academic honesty, consult the Code of Conduct. Laptops and other electronic devices Laptops will be allowed only for taking lecture notes. This means laptops may not be connected to the Internet at any time, unless otherwise permitted. I may check your laptop use at any point during class to verify that this privilege is not being abused. No other electronic devices are permitted. Lateness and Make-up Exams Extensions and make-up exams will be given only in case of a valid medical excuse and only if I am informed ahead of the exam or deadline. Reasonable accommodation If you have a disability and feel you will need accommodations in order to complete course requirements, please contact the Ross Center for Disability Services (Campus Center, UL Room 211, ). I am happy to work with you on this. You must notify me of any accommodation in advance. 5 Work Ten Reading responses: 40% of grade Each week except the first and last week a discussion question will be ed to you. You are expected to read the assigned material for that week and write a one page, single spaced response answering the discussion question. Responses should be ed to me by 12 noon on Thursday. You can choose to write a response to any TEN of TWELVE papers. Responses will be graded on a 10 point scale as follows: 7 or less - Essay does not address the question and/or unclear/poor writing. 8 - Question is addressed but essay lacks coherence. 9 - Coherent essay, answers question directly. 10- Above plus exceptional writing and/or deeper analysis going beyond the readings. The response should be your own work. Plagiarism will automatically result in a failing grade. 2
3 Three In-Class Exams - 30% of grade There will be THREE in-class, open-book, exams, each based on the preceding one-third of class material. See schedule below for dates. Each exam accounts for 10% of the course grade. Question will be based on required readings and discussion papers. Exam Date Exam One March 7 Exam Two April 18 Exam Three Exam Period Final paper: 20% of grade The final paper is due during final exam period. Detailed guidelines will be given later in the semester. Class participation: 10% of grade One aim of the discussion papers is to facilitate in-class discussions. So come prepared to ask questions and answer them. Grading scheme A >93%, A- 90%-93%, B+ 87%-89%, B 84%-86%, B- 80%-83%, C+ 77%-79%, C 74%-76%, C- 70%-73%, D+ 67%-69%, D 64%-66%, D- 60%-63%, F <60%. 6 List of Topics and (Subject to change) SECTION 0: INTRODUCTION AND HISTORY Topic One: What is Development? Required 1. PED Ch. 1, 2 2. Sen Amartya (1999) The Ends and Means of Development, Ch. 2 of Development As Freedom, Anchor Books. 3. Rostow, WW (1960) The Five Stages of Growth - A Summary, Ch. 2 of The Stages of Economic Growth: A Non-Communist Manifesto, Cambridge University Press. 4. Mies Maria (1993) The Myth of Catching-Up Development, Ch. 4 of Shiva and Mies eds, Eco-Feminism, Zed Books Topic Two: Colonialism Required 1. PED Ch Amsden Alice (2007) Where the Sun Never Sets, and Wages Never Rise, Ch. 2 of Escape from Empire: The Developing Worlds Journey through Heaven and Hell, The MIT Press. 3
4 3. Acemoglu D, Johnson S and Robinson J (2006) Understanding Prosperity and Poverty: Geography, Institutions, and the Reversal of Fortune, in Banerjee, Benabou and Mookherjee (eds)understanding Poverty, Oxford University Press. 4. Marx Karl (1867) Genesis of the Industrial Capitalist, Ch. 31 of Capital Vol. 1. Optional 1. Paul Baran, On the Roots of Backwardness, Ch. 5 of The Political Economy of Growth, Monthly Review Press. 2. Eduardo Galeano, Lust for Gold, Lust for Silver, Ch. 1 of The Open Veins of Latin America, Monthly Review Press. 3. Walter Rodney, The Colonial Economy, Ch. 14 of General History of Africa VII- Africa Under Colonial Domination SECTION 1: MICROECONOMICS OF DEVELOPMENT Topic Three: Poverty and Nutrition Required 1. DE Ch PE Ch Banerjee A and Duflo E (2008) Economic Lives of the Poor, in Giorgio Secondi (ed) The Development Economics Reader, Routledge. Topic Four: Population Required 1. PED Ch PE Ch EQG Ch. 5 Topic Five: Education Required 1. PED Ch PE Ch EQG Ch. 4 Topic Six: Microfinance Required 1. DE Ch PE Ch. 7, 9 3. Milford and Chang (2012) Microfinance and the Illusion of Development: From Hubris to Nemesis in Thirty Years, World Economic Review Vol 1:
5 Optional 1. Rosenberg, Gonzales and Narain (2009) The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates? CGAP Occasional Paper 2. Kabeer, N (2005) Is Microfinance a Magic Bullet for Women s Empowerment? Analysis of Findings from South Asia, Economic and Political Weekly, Vol. 40, No. 44/45, pp SECTION 2: STRUCTURAL CHANGE AND LATE INDUSTRIALIZATION Topic Seven: Agrarian Relations and Land Reform 1. DE Ch PED Ch Griffin, Khan, and Ickowitz (2002) Poverty and the Distribution of Land, Journal of Agrarian Change, Vo. 2, pp Topic Eight: Comparative Advantage: Static and Dynamic 1. PED Ch. 4, 6 (parts) 2. Stock Robert (2012) Africa in the World Economy, Ch. 16 of Africa South of the Sahara, Guilford Press. 3. Chang Ha-Joon (2003) Kicking away the ladder: The Real History of Free Trade, FPIF Special Report. 4. Marx Karl (1848) On the Question of Free Trade, Speech to the Democratic Association of Brussels, Jan 9, FILM: Life and Debt Optional 1. DE Ch. 17 Topic Nine: Political Economy of Late Industrialization 1. PED Ch. 5, 9 and DE Ch Amsden Alice (2007) The Light of the Moon, Ch. 6 of Escape from Empire: The Developing Worlds Journey through Heaven and Hell, The MIT Press. 4. Kay, Cristobal (2002) Why East Asia overtook Latin America: Agrarian Reform, Industrialisation and Development, Third World Quarterly, Vol 23, pp Optional 1. Amsden Alice (1989) Getting Relative Prices Wrong, Ch. 6 of Asia s Next Giant: South Korea and Late Industrialization, Oxford University Press. 5
6 Topic Ten: The Informal Sector 1. Wilson Tamar (1998) Introduction to special issue of Latin American Perspectives on The Urban Informal Sector, 25: 2, pp Breman Jan (1999) The study of industrial labour in post-colonial IndiaThe informal sector: A concluding review, Contributions to Indian Sociology, 33; Jhabvala Renana, Excluding the Majority: Workers, Producers, and Categories of Employment, Self Employed Women s Association, Research Paper. Optional 1. Chen, Sebstad and O Connell (1999) Counting the Invisible Workforce: The Case of Homebased Workers, World Development Vol. 27, pp Gerry Chris (1987) Developing Economies and the Informal Sector in Historical Perspective, Annals of the American Academy of Political and Social Science, Vol. 493, The Informal Economy, pp SECTION THREE: MACROECONOMICS OF DEVELOPMENT Topic Eleven: Balance of Payments and the Debt Crisis 1. PED Ch. 15, Boyce J and Ndikumana L (2012) Selection from Africa s Odious Debts Optional 1. Toussaint Eric Transfers from Periphery to Center, From Labor to Capital, Ch. 9 of Your Money or Your Life: The Tyranny of Global Finance Topic Twelve: The Washington Consensus and Beyond 1. PED Ch Amsden Alice (2007) America s Fatwas, Ch. 9 of Escape from Empire: The Developing Worlds Journey through Heaven and Hell, The MIT Press. 3. Stiglitz Joseph (2003) The East Asia Crisis- How IMF Policies Brought the World to the Verge of a Global Meltdown, Ch. 4 of Globalization and its Discontents, Norton Books. 4. Onis Z and Senses F (2005) Rethinking the Emerging Post-Washington Consensus, Development and Change, 36: FILM: Commanding Heights (Episode: The Rules of the Game) 6
7 Topic Thirteen: Growth, Poverty, Inequality 1. DE Ch. 3, 7 (parts) 2. EQG Ch. 2 and 3 3. Picketty Thomas (2006) The Kuznets Curve- Yesterday and Tomorrow, in Banerjee, Benabou and Mookherjee (eds)understanding Poverty, Oxford University Press. 4. Ravallion Martin (2007) Economic Growth and Poverty Reduction: Do Poor Countries Need to Worry About Inequality? 2020 FOCUS BRIEF on the Worlds Poor and Hungry People. FINAL PAPER - DUE EXAM PERIOD 7
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