Development Economics

Course Director: Celine Harion Zipfel

Purpose
This course will examine current issues in development economics. It will provide you with an overview of the challenges of global poverty and study different policy interventions and their effectiveness.

Content
We will cover the major debates of development economics and integrate economic theory and empirical analysis to answer questions pertinent to economic policy in developing countries. A key message to come out of the literature that constitutes the frontier of research on big development policy questions is that there remain huge challenges ahead for alleviating global poverty and unleashing structural transformation in the world's poorest countries while also adapting to and mitigating the consequences of a warming climate.

The course will study the shift in the occupational structure from one dominated by subsistence self-employment (mostly in agriculture) to salaried employment in large firms that characterises economic development, as well as the constraints and frictions that households and firms encounter along this path. We will focus on topics such as poverty traps, education, labor markets, and constraints to firm growth in developing countries. The course will also include lectures on the relationship between economic development and the environment.

The syllabus will mainly be focused on applied microeconomic topics and leverage students' knowledge of empirical methods from previous training in econometrics.

Format and Structure
The course will consist of 15 lectures and 5 seminars. Note that at least 2 (maybe 3) lectures will be guest lectures, given by experts on specific topics. The course reading list consists entirely of academic papers and is extensive. It includes 1 compulsory academic paper per lecture, as well as a list of at least 5-6 other readings, which lectures may refer to but which won't go into in detail. Students are strongly encouraged to read at least the abstracts of all these other papers.

Whenever available, a link to a non-technical summary of the compulsory reading is provided; students should read these before trying to read the paper. Students are expected to be able to explain the intuition of the hypotheses tested in the compulsory paper, understand the empirical approach used to answer the research question, interpret the key exhibits of the paper accurately, and understand the discussion of any possible causal mechanisms underlying the results.

The coursework includes an assignment in which the students will use statistical/programming software to analyze data and discuss the results from a development policy perspective. Seminar 1 will be a software tutorial while Seminar 2 will discuss solutions to the first assignment. The students will also prepare an in-class presentation of the current state of evidence on a topic of their choice (drawing on a list of proposed readings), which we will take place in Seminars 3 and 4. Students will be encouraged to work on their assignments in groups of 2-4. In the final seminar, students will practice answering exam questions by attempting last year's exam with support from the course's teaching assistant.

Course Administrator: jessica.kihlman@hhs.se

Upon successful completion of the course, students will:

1. have knowledge and understanding of the major debates of development economics
2. understand how to use key empirical tools from econometrics and data analytics to critically assess the effectiveness of development policies in different settings
3. understand the intuition behind key micro-theoretical frameworks in development economics (e.g. poverty trap models)
4. be able to think critically about the available evidence on different policy interventions (and the frictions they seek to address) and use it to formulate nuanced policy recommendations

The course combines theory and empirics and has a strong applied focus. In particular, it is assumed that students will have prior knowledge in econometrics (cross-sectional and panel data analysis).

Most of the course relies on academic papers, the list of which will be provided in a detailed syllabus found on the course homepage (under downloads) at the beginning of the course. All of these articles will be sent to you by email at the start of the course. The list of *essential* readings is pasted below:

• Balboni, Clare, Oriana Bandiera, Robin Burgess, Maitreesh Ghatak, and Anton Heil (2022). "Why do people stay poor?" The Quarterly Journal of Economics, Volume 137, Issue 2, May 2022, Pages 785–844.
• Abebe, G., Stefano, C. and E. Ortiz-Ospina. 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia." American Economic Review, 111:6.
• Singh, A. (2020). "Learning more with every year: School year productivity and international learning divergence." Journal of the European Economic Association, 18(4), 1770–1813.
• De Mel, S., D. McKenzie and C. Woodruff (2008) "Returns to Capital in Microenterprises: Evidence from a Field Experiment", The Quarterly Journal of Economics, 123(4), pp. 1329-72.
• Jensen, Robert, and Nolan H. Miller. 2018. "Market Integration, Demand, and the Growth of Firms: Evidence from a Natural Experiment in India." American Economic Review, 108 (12): 3583-3625.
• Burgess, R., R. Jedwab, E. Miguel, A. Morjaria and G. Padro-i-Miquel (2015) "The Value of Democracy: Evidence from Road Building in Kenya", American Economic Review, 105(6): 1817-51.
• Liu, M., Shamdasani, Y. and Vis Taraz. 2022. "Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census." American Economic Journal: Economic Policy
• Duflo, Esther, Michael Greenstone, Rohini Pande, and Nicholas Ryan. 2013. "Truth-telling by Third-party Auditors and the Response of Polluting Firms: Experimental Evidence from India." The Quarterly Journal of Economics, 128(4): 1499–1545.
• Bhalotra, S., Clarke, D., Gomes, J. F., & Venkataramani, A. (2023). "Maternal mortality and women’s political power." Journal of the European Economic Association, 21(5), 2172–2208

The course includes group assignments where the students will use Stata/R/Python to analyze data and discuss the results from a development policy perspective. The students will also give in-class group presentations on a topic of their choice. There will also be a final exam at the end of the course. Both assignments and the final exam will carry weight towards the final grade. The assignments account for up to 25 points and the final exam up to 75 points of the final grade.

Find the course schedule in TimeEdit

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