AEC 643: Advanced Topics in Development Economics Department of Applied Economics Oregon State University. Winter 2018

Transcription

1 AEC 643: Advanced Topics in Development Economics Department of Applied Economics Oregon State University Winter 2018 Instructor: Kassahun Melesse Office Hours: Wednesday 1 pm-2 pm, 232B, Ballard Extension or by appointment. Kassahun.Melesse@oregon.state.edu Class Schedule: TR 10 am-11:20 am Course Objective and Description: The course is designed to introduce students to key issues in the economics of development and equip them with the theoretical and empirical tools required to conduct advanced research in these topics. Prerequisites: Graduate coursework in microeconomics and econometrics. Evaluation: Final grades in AEC 643 will be computed using the following weights: Problem Set (5) 25% Proposal: 30% Referee Report (1) 10% Replication Project and Presentation: 15% Book Review: 10% Participation: 10% Proposal: Students are expected to develop a research idea and write well thought-out research proposal that includes a review of the literature, a theoretical model and an empirical strategy to carry out the study. Replication Project and Presentation: Students are required to choose an empirical paper from the readings, replicate all the major results in the paper using the data used by the authors, and present their findings in class. Referee Report: You need to submit two 3-4 pages referee reports that briefly summarize the paper, critical analyze the study in question, and identify areas of improvement Book Review: Students will write a critical analysis of one of the books listed under Books for Review. Participation: Students are expected to read the assigned readings and actively participate in class. Required readings are marked with an asterisk.

2 I. General Readings Bardhan, Pranab, and Christopher Udry. Development Microeconomics. Oxford, UK: Oxford University Press, Ray, Debraj. Development Economics. Princeton, NJ: Princeton University Press, De Janvry, Alain and Elisabeth Sadoulet. Development Economics: Theory and Practice. New York: Routledge, 2016 II. Books for Review Sen, Amartya. Development As Freedom. New York: Oxford University Press, Easterly, William, The Elusive Quest for Growth: Economists Adventures and Misadventures in the Tropics, MIT Press, Cambridge, Acemoglu, D. and Robinson, J.A. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Publishers, Sachs, Jeffrey D. The End of Poverty: Economic Possibilities for Our Time. New York: Penguin Books.2005 Banerjee, Abhijit and Duflo, Esther: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, Public Affairs, New York, III. Books and Articles on Empirical Methods Deaton, Angus. The Analysis of Household Surveys. Baltimore, MD: John Hopkins University Press, ISBN: Imbens, Guido and Rubin, Donald. Causal Inference for Statistics, Social and Biomedical Sciences: An Introduction. Cambridge University Press, New York, 2015 Angrist, Joshua and Pischke, Jorn-Steffen. Mostly Harmless Econometrics: An Empiricist s Companion. Princeton. NJ: Princeton University Press, Wooldridge, Jeffery M. Econometric Analysis of Cross Section and Panel Data, 2 nd Edition, MIT Press, Cambridge, 2010 Duflo, Esther, Rachel Glennerster, and Michael Kremer. "Using Randomization in Development Economics Research: A Toolkit." Chapter 61 in Handbook of Development Economics. Vol. 4. Edited by T. Paul Schultz and John Strauss. Amsterdam, The Netherlands: North Holland, 2008 Topics I. Analytical Tools and Empirical Methods in Development Economics

3 Week 1 1. Growth Theory *Solow, Robert M. (1956). A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics, 70(1): *Mankiw, N. Gregory and David Romer, David N. Weil. A Contribution to the Empirics of Economic Growth, Quarterly Journal of Economics, Vol. 107, No. 2 (May, 1992), pp Acemoglu, Daron : Introduction to Modern Economic Growth. Princeton, NJ: Princeton University Press, 2009, Chapters 1-4. Romer, Paul (1986), Increasing Returns and Long-Run Growth," Journal of Political Economy,Vol. 94, No. 5 (Oct. 1986), pp Easterly, William. (2001). The Elusive Quest for Growth: Economists Adventures and Misadventures in the Tropics. Cambridge, MA: MIT Press, Chapters 1, 2, and 3. Romer P. M. (1990) "Endogenous Technological Change", Journal Political Economy, 98 (5) pt.2, Hall, Robert E. and Charles I. Jones Why Do Some Countries Produce So Much More Output Per Worker Than Others? Quarterly Journal of Economics 114(1): Acemoglu, Daron, Simon Johnson, and James A. Robinson. "The Colonial Origins of Comparative Development: An Empirical Investigation." American Economic Review 91, no. 5 (2001): Bills, Mark, and Pete Klenow. "Does Schooling Cause Growth?" The American Economic Review 90, no. 5 (2000): Rodrik, Dani, Arvind Subramanian, and Francesco Trebbi. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development." Journal of Economic Growth 9, no. 2 (2002): Frankel, Jeffrey and David Romer. Does Trade Cause Growth? American Economic Review, Weil, David Accounting for the Effect of Health on Economic Growth, Quarterly Journal of Economics, 122(3):

4 2. Household Economics *Bardhan, Pranab and Chris Udry Household Economics, chapter 2 in Development Microeconomics. Oxford University Press *Udry, Christopher (1996). Gender, Agricultural Production, and the Theory of the Household, Journal of Political Economy, 104 (5), pp Banerjee, Abhijit (2004). Educational Policy and the Economics of the Family, Journal of Development Economics, 74 (1), pp I. Singh, L. Squire, and John Strauss (1986). The Basic Model: Theory, Empirical Results, and Policy Conclusions, in Agricultural Household Models. Baltimore: Johns Hopkins University Press. Becker, Gary (1981). A Treatise on the Family, Harvard University Press. Benjamin, Dwayne (1992). Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models, Econometrica, 60(2), Boboni, Gustavo (2009). Is the Allocation of Resources within the Household Efficient? New Evidence from a Randomized Experiment, Journal of Political Economy, 117(3), pp Browning, Martin and Pierre-Andre Chiappori (1998). Efficient Intra-household Allocations: A General Characterization and Empirical Tests, Econometrica, 66(6), pp Week 2 3. Measurement of Poverty and Inequality *Deaton, Angus. The Analysis of Household Surveys: A Microeconometric Approach to Development Policy. Baltimore, MD: Published for the World Bank by Johns Hopkins University Press, 1997, Chapter 3. *Foster, J., Greer, J., Thorbecke, E.: A class of decomposable poverty measures. Econometrica 52, (1984) Banerjee, Abhijit, and Esther Duflo. "Economic Lives of the Poor." Journal of Economic Perspectives 21, no. 1 (2006): Deaton, Angus. The Analysis of Household Surveys: A Microeconometric Approach to Development Policy. Baltimore, MD: Published for the World Bank by Johns Hopkins University Press, 1997, Chapter 2, 3

5 Foster, James E. "A Class of Chronic Poverty Measures." In Poverty Dynamics: Interdisciplinary Perspectives, edited by Tony Addison, David Hulme and Ravi Kanbur, Oxford: Oxford University Press, Banerjee, A. "The Two Poverties." In Insurance against Poverty, edited by S. Dercon. Oxford:Oxford University Press, Ligon, Ethan, and Laura Schechter. "Measuring Vulnerability." Economic Journal 113, no. 486 (2003): C Ravallion, Martin. "Issues in Measuring and Modelling Poverty." Economic Journal 106, no. 438(1996): Deaton, Angus. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)." Review of Economics and Statistics 87, no. 1 (2005): Empirical Methods in Development Economics *Angrist, Josh, and Alan Krueger. "Empirical Strategies in Labor Economics." Chapter 23 in Handbook of Labor Economics. Vol. 3A. Edited by Orley Ashenfelter and David Card. Amsterdam, The Netherlands: North Holland, ISBN: *Duflo, Esther, Rachel Glennerster, and Michael Kremer. "Using Randomization in Development Economics Research: A Toolkit." Chapter 61 in Handbook of Development Economics. Vol. 4. Edited by T. Paul Schultz and John Strauss. Amsterdam, The Netherlands: North Holland, 2008 Deaton, Angus. "Instruments of Development: Randomization in the Tropics, and the Search for the Elusive Keys to Economic Development." Center for Health and Wellbeing Working Paper. Princeton, Deaton, Angus. The Analysis of Household Surveys: A Microeconometric Approach to Development Policy. Baltimore, MD: Published for the World Bank by Johns Hopkins University Press, 1997, Chapters 1 and 2. UNDP "Household Sample Surveys in Developing and Transition Countries," In Studies in Methods. New York: UNDP, Gibson, J., and D. McKenzie, "Using Global Positioning Systems in Household Surveys for Better Economics and Better Policy." The World Bank Research Observer 22(2): Grosh, M.E., P. Glewwe, and World Bank Designing Household Survey Questionnaires for Developing Countries: Lessons from 15 Years of the Living Standards Measurement Study. Washington, D.C.: World Bank,

6 II. Human Capital Week 3 1. Nutrition *J. R. Behrman, A. D. Foster, and M. R. Rosenzweig (1997), The dynamics of agricultural production and the calorie income relationship: Evidence from Pakistan, Journal of Econometrics, 77(1): *Strauss, John. "Does Better Nutrition Raise Farm Productivity?" Journal of Political Economy 94 (1986): Subramanian, Shankar and Angus Deaton The Demand for Food and Calories, Journal of Political Economy, 104(1): Strauss, John, and Duncan Thomas. "Health, Nutrition and Economic Development." Journal of Economic Literature 36 (1998): P. Dasgupta (1997), Nutritional status, the capacity for work, and poverty traps, Journal of Econometrics, 77(1): Health *Kremer, Michael and Edward Miguel Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities, Econometrica, 72(1): *Das, Jishnu and Jeffrey Hammer (2007). Money for Nothing: The Dire Straits of Medical Practice in Delhi, India, Journal of Development Economics, 83(1), pp Acemoglu, Daron, and Simon Johnson. "Disease and Development: The Effect of Life Expectancy on Economic Growth." Journal of Political Economy 115 (6 (2006): Das, Jishnu, Jeffrey Hammer and Kenneth Leonard The Quality of Medical Advice in Low-Income Countries, Journal of Economic Perspectives, 22(2): Kremer, Michael and Rachel Glennerster (2011) Improving Health in Developing Countries: Evidence From Randomized Evaluations, Handbook of Health Economics, Volume 2 Bleakley, Hoyt (2010). Malaria Eradication in The Americas: A Retrospective Analysis of Childhood exposure, American Economic Journal: Applied Economics, 2(2), pp

7 Bleakley, Hoyt (2007). Disease and Development: Evidence from Hookworm Eradication in the American South, Quarterly Journal of Economics, 122(1), pp Week 4 3. Education *Duflo, Esther (2001). Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment, American Economic Review, 91(4),pp *Duflo Esther, Pascaline Dupas and Michael Kremer (2011). Peer Effects, Teacher Incentives,and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya, American Economic Review, 101(5), pp Bils, Mark and Peter Klenow (2000) Does Schooling Cause Growth? American Economic Review, 90(5), pp Card, David (2001). Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems, Econometrica, 69(5), pp Duflo, Esther (2004). The Medium Run Effects of Educational Expansion: Evidence from a Large School Construction Program in Indonesia, Journal of Development Economics, 74(1),pp Griliches, Zvi (1977). Estimating the Returns to Schooling, Econometrica, 45(1), pp Hanushek, Eric and Ludger Woessmann (2008). The Role of Cognitive Skills in Economic Development, Journal of Economics Literature, 46(3), pp Klenow, Pete and Andrés Rodriguez-Clare (1997). The Neoclassical Revival in Growth Economics: Has it Gone too Far? NBER Macroeconomics Annual, pp Kremer, Michael and Alaka Holla (2009). Improving Education in the Developing World: What Have We Learned from Randomized Evaluations?, Annual Review of Economics, Volume One,pp Krueger, Alan and Mikael Lindahl (2001). Education for Growth: Why and for Whom, Journal of Economic Literature, 39(4), pp Pritchett, Lant (2001). Where Has All The Education Gone? World Bank Economic Review,15(3), pp

8 III. Markets and Economic Development 1. Credit Markets *De Mel, Suresh, David McKenzie, and Christopher Woodruff Returns to Capital in Microenterprises: Evidence from a Field Experiment, Quarterly Journal of Economics, 123(4): *Rosenzweig, Mark, and K. Wolpin. "Credit Market Constraints, Consumption Smoothing and the Accumulation of Durable Production Assets in Low-Income Countries: Investments in Bullocks in India."Journal of Political Economy 101, no. 2 (1993): *Burgess, Robin and Rohini Pande Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment, American Economic Review, 95(3): Fafchamps, Marcel, Christopher Udry, and Katie Czukas. "Drought and Savings in West Africa: Are Livestock a Buffer Stock?" Journal of Development Economics 55, no. 2 (1998): Besley, T., Coate, S., and Loury, G. "The Economics of Rotating Savings and Credit Associations."American Economic Review 83, no. 4 (1993): Ashraf, Nava, Dean Karlan, and Wesley Yin. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines." Quarterly Journal of Economics 121, no. 2 (2006): Karlan, Dean S., and Jonathan Zinman. "Credit Elasticities in Less Developed Countries: Implications for Microfinance." American Economic Review 8, no. 3 (2008): Morduch, Jonathan. "The Microfinance Promise." Journal of Economic Literature 37, no. 4 (1999): Week 5 2. Risk and Agricultural Insurance *Townsend, Robert M. (1994): Risk and Insurance in Village India, Econometrica, Vol. 62(3), pp *M. R. Rosenzweig and H. P. Binswanger (1993), Wealth, weather risk and the composition and profitability of agricultural investments, Economic Journal, 103(416): Cole, Shawn A., Xavier Gine, Jeremy Tobacman, Petia Topalova, Robert Townsend, and James Vickery (2010): Barriers to Household Risk Management: Evidence from India. Harvard Business School Working Paper, No , April (Revised November 2010.)

9 Bardhan, Pranab and Chris Udry Risk and Insurance in an Agricultural Economy, chapter 8 in Development Microeconomics. Oxford University Press J. Morduch (1995), Income smoothing and consumption smoothing, Journal of Economic Perspectives, 9(3): Land Markets *Banerjee, Abhijit, Paul Gertler and Maitresh Ghatak. "Empowerment and Efficiency: Tenancy Reform in West Bengal." Journal of Political Economy 110, no. 2 (2002): *Goldstein, Markus and Chris Udry The Profits of Power: Land Rights and Agricultural Investment in Ghana, Journal of Political Economy, 116(6): Shaban, Radwan. "Testing between Competing Models of Sharecropping." Journal of Political Economy 95, no. 5 (1987): Banerjee, Abhijit. "Prospects and Strategies for Land Reforms." In Annual World Bank Conference on Development Economics Edited by Boris Pleskovic and Joseph E. Stiglitz. Washington, DC: World Bank, 2001, pp Field, Erica. "Entitled to Work: Urban Property Rights and Labor Supply in Peru." Unpublished paper, July Field, Erica, and Maximo Torero. "Do Property Titles Increase Credit Access Among the Urban Poor? Evidence from a Nationwide Titling Program." Unpublished paper, January Goldstein, Marcus, and Chris Udry. "Gender, Power and Agricultural Investment in Ghana." Unpublished paper, April Week 6 4. Labor Markets and Migration *Benjamin, Dwayne. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models." Econometrica 60 (1992): *H. G. Jacoby (1993), Shadow wages and peasant family labor supply: An econometric application to the Peruvian Sierra, Review of Economic Studies,60(4): Jayachandran, Seema. "Selling Labor Low: Wage Responses to Productivity Shocks in Developing Countries." Journal of Political Economy 114, no. 3 (2006):

10 Freeman, Richard. "Labor Markets and Institutions in Economic Development." American Economic Review83, no. 2 (1993): Schultz, Theodore W. "The Doctrine of Agricultural Labor of Zero Value." Chapter 4 in Transforming Traditional Agriculture. Chicago, IL: University of Chicago Press, Schultz, T. W. "The Value of the Ability to Deal with Disequilibria." Journal of Economic Literature 13, no. 3 (1975): Besley, Timothy, and Robin Burgess. "Can Labor Regulation Hinder Economic Performance? Evidence from India." Quarterly Journal of Economics 109, no. 1 (2004): Migration Munshi, Kaivan. "Networks in the Modern Economy: Mexican Migrants in the U.S. Labor Market." Quarterly Journal of Economics 118, no. 2 (2003): Yang, Dean. "International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks." The Economic Journal 118, no. 528 (2008): Munshi, Kaivan, and Mark Rosenzweig. "Why is Mobility in India So Low? Social Insurance, Inequality, and Growth." Unpublished paper, July (PDF) Banerjee, A. V., and A. F. Newman. "Information, the Dual Economy, and evelopment." Review of Economic Studies 65, no. 4 (1998): Rosenzweig, Mark R. "The Global Migration of Skill." Carlos Diaz-Alejandro Lecture. Bogota, Colombia, October (PDF) IV. Contracts and Agricultural Productivity *M. Eswaran and A. Kotwal (1985), A theory of contractual structure in agriculture, American Economic Review, 75(3): *J. J. Laffont and M. S. Matoussi (1995), Moral hazard, financial constraints and sharecropping in El Oulja, Review of Economic Studies, 62(3): G. Feder (1985), The relation between farm size and farm productivity: The role of family labor, supervision and credit constraints, Journal of Development Economics, 18(2 3): S. M. Sherlund, C. B. Barrett, and A. A. Adesina (2002), Smallholder technical efficiency: Controlling for environmental production conditions, Journal of Development Economics, 69(1):85 101

11 Week 7 V. Technology Adoption *Suri, T "Selection and comparative advantage in technology adoption." Econometrica 79(1): *Conley, T.G., and C.R. Udry, "Learning About a New Technology: Pineapple in Ghana."The American Economic Review 100(1): Foster, A.D., and M.R. Rosenzweig "Microeconomics of technology adoption." Annual Review of Economics. 2(1): Besley, Timothy, and Anne Case. "Modeling Technology Adoption in Developing Countries." American Economic Review 83, no. 2 (1993): Feder, G., R.E. Just, and D. Zilberman "Adoption of agricultural innovations in developing countries: A survey." Economic Development and Cultural Change 33(2): Foster, Andrew- D., and Mark- R. Rosenzweig. "Learning by Doing and Learning from Others:Human Capital and Technical Change in Agriculture." Journal of Political Economy 103,no. 6 (1995): VI. Gender Issues * Duflo, Esther and Raghabendra Chattopadhyay. (2004). Women as Policy Makers: Evidence from a Randomized Policy Experiment in India, Econometrica 72(5): *Qian, Nancy. "Missing Women and the Price of Tea in China." Quarterly Journal of Economics 123, no. 3 (2008): Beaman, Lori, Esther Duflo, and Raghabendra Chattopadhyay. "Powerful Women: Does Exposure Reduce Bias?" University of California, San Diego, March Alberto Alesina, Paula Guiliano and Nathan Nunn (2013), On the Origins of Gender Roles: Women and the Plough, Quarterly Journal of Economics, Vol 128(2)

12 Week 8 VII. Public Goods and Infrastructure *Donaldson, Dave. Railroads of the Raj: Estimating the Impact of Transportation Infrastructure, American Economic Review, forthcoming. *Duflo, Esther, and Rohini Pande. "Dams." Quarterly Journal of Economics 122, no. 2 (2007): Galiani, S., P. Gertler, and E. Schargrodsky. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality." Journal of Political Economy 113, no. 1 (2005): VIII. The Political Economy of Development 1. Institutions and Economic Performance *Acemoglu, Daron, Simon Johnson, and James A. Robinson. "The Colonial Origins of Comparative Development: An Empirical Investigation." American Economic Review 91, no. 5 (2001): *T. Besley (1995), Property rights and investment incentives: Theory and evidence from Ghana, Journal of Political Economy, 103(5): Acemoglu, Daron, Simon Johnson, James Robinson, and Pierre Yared. (2008). Income and Democracy, American Economic Review, 98(3), Casey, Katherine, Rachel Glennerster, and Edward Miguel. (2012). Reshaping institutions: Evidence on aid impacts using a pre analysis plan, Quarterly Journal of Economics, 127(4), Dal Bo, Pedro, Andrew Foster, Louis Putterman (2010) "Institutions and Behavior: Experimental Evidence on the Effects of Democracy", American Economic Review, 100(5), Week 9 2. Conflict *Easterly, William, and Ross Levine. (1997). Africa s Growth Tragedy: Policies and Ethnic Divisions, Quarterly Journal of Economics, 112 (4):

13 *Burgess, Robin, Remi Jedwab, Edward Miguel, Ameet Morjaria, and Gerard Padró i Miquel "The Value of Democracy: Evidence from Road Building in Kenya." American Economic Review, 105(6): Habyarimana, James, Macartan Humphreys, Daniel N. Posner, and Jeremy M. Weinstein.(2007). Why Does Ethnic Diversity Undermine Public Goods Provision? American Political Science Review, 101 (4): Chassang, Sylvain, and Gerard Padro i Miquel. (2010). Economic Shocks and Civil War, Quarterly Journal of Political Science, 4(3), Corruption * Olken, Benjamin. (2007). Monitoring Corruption: Evidence from a Field Experiment in Indonesia, Journal of Political Economy, 115(2): * Reinikka, Ritva, and Jakob Svensson. (2004). Local Capture: Evidence from a Central Government Transfer Program in Uganda, Quarterly Journal of Economics, 119(2): Khwaja, Asim Ijaz and Atif Mian. (2005). Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market, Quarterly Journal of Economics, 120(4): Olken, Ben and Rohini Pande (2012) Corruption in Developing Countries, Annual Review of Economics, Vol. 4. IX. Behavioral Economics and Development Week 10 *Tanaka, T., C.F. Camerer, and Q. Nguyen "Risk and time preferences: Linking experimental and household survey data from Vietnam." The American Economic Review 100(1): *Duflo, Esther, Michael Kremer, and Jonathan Robinson (2011) Nudging Farmers to Use Fertilizer:Evidence from Kenya American Economic Review 101 (6): Mullainathan, Sendhil (2006) Development Economics Through the Lens of Psychology, Proceedings of the Annual Bank Conference on Development Economics Banerjee, Abhijit- V., and Sendhil Mullainathan. "Limited Attention and Income Distribution." American Economic Review 98, no. 2 (2008): Bertrand, M., S. Mullainathan, and E. Shafir "A behavioral-economics view of poverty. American Economic Review:

14 Students with Disabilities: I will provide reasonable accommodation for students who submit appropriate documentation of special learning needs. Please let me know early in the term if special arrangements are needed. Accommodations are collaborative efforts between students, faculty and Disability Access Services (DAS). Students with accommodations approved through DAS are responsible for contacting the faculty member in charge of the course prior to or during the first week of the term to discuss accommodations. Students who believe they are eligible for accommodations but who have not yet obtained approval through DAS should contact DAS immediately at Academic Honesty: If you violate academic honesty in my course, you will receive an F on the work in question and/or in the class. Academic or Scholarly Dishonesty is defined as an act of deception in which a Student seeks to claim credit for the work or effort of another person, or uses unauthorized materials or fabricated information in any academic work or research, either through the Student's own efforts or the efforts of another. Violations include: Cheating, Fabrication, Assisting, Tampering, and Plagiarism. The full OSU Statement of Expectations for Student Conduct is available at: