Development Microeconomics

Transcription

1 Development Microeconomics Master Economics and Public Policy Elise Huillery, Assistant Professor of Economics, Sciences Po Overview The goal of this course is to better understand the lives of the world s poor and why they remain poor. Specifically, the course addresses the main dimensions of poverty: lack of human capital, lack of assets, lack of insurance, lack of voice, etc., and tries to examine why poverty is not just a matter of initial low wellbeing: What price distortions and market failures hinder their quest to improve their wellbeing? We will use economic theoretical inputs as lights to examine detailed survey data of the world s poor. Another important focus of the course is on policies that try to address the issue of poverty: Is there scope for policy to help the world s poor? What policies have been tried out? Have they been successful? To answer these questions, the course emphasizes the methodological issues and covers a large portion of methodologies used in the field of microeconomics. A large share will be devoted to a method that puts social sciences to the test: field experiments in economics. This requires a solid understanding of how to read and interpret statistics and econometrics. Recommended Textbooks A. Banerjee, R. Benabou, and D. Mookherjee, Understanding Poverty, Oxford University Press: March This is a non-technical description of research by economists on most of the topics related to development economics. Ray, Debraj, Development Economics, Princeton University Press: This is the best undergraduate textbook in development. Bardhan, Pranab, Christopher Udry, Development Microeconomics, Oxford University Press: New York 2000 Evaluation The final score is three-fold: 1) Students are asked to read an academic paper each week to prepare the lecture. They are given some questions on the paper and/or some short exercises. 5 students are randomly chosen each week to provide their answers at the beginning of the lecture. This counts for 30% of the final score. 2) A group of 2-3 students provides an oral presentation on the required reading paper each week of about 20 minutes. This counts for 20% of the final score. 3) Students take a final exam during the last lecture. This counts for 50% of the final score. Plan of the Course

2 Lecture 1: What is Poverty? Banerjee, Abhijit and Esther Duflo, "The Economic Lives of the Poor", Journal of Economic Perspectives, 21(1): DE Ch. 2, "Measuring Poverty" in UP Duflo, Esther, Poor but Rational? in Abhijt Banerjee, Dilip Mookherjee and Roland Benabou (eds.) Understanding Poverty, New York: Oxford University Press, March 2006, Ravallion M., Poverty Comparisons, Harwood Academic Publishers, 1994 Bourguignon F., "From income to endowments: the difficult task of expanding the income poverty paradigm", document de travail DELTA n Lecture 2: Poverty and Human Capital (1): The Supply for Health Miguel, Edward, and Michael Kremer (2004), Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities, Econometrica, Vol. 72, No. 1, pp Health and Nutrition DE Ch. 8 (esp. 8.4), Ch 13.4 David Cutler, Angus Deaton, and Adriana Lleras-Muney, "The Determinants of Mortality," Journal of Economics Perspectives, Summer The economics of risky behaviors Thomas Philipson and Richard Posner, "The Microeconomics of the AIDS Epidemic in Africa," Population and Development Review 21(4), December 1995, Kremer, Michael (1996) Integrating behavioral choice into epidemiological models of the AIDS epidemic Quarterly Journal of Economics, May: Pascaline Dupas, Relative risks and the market for sex: Teenagers, Sugar Daddies, and HIV in Kenya, Dartmouth College Manuscript, October Esther Duflo, Pascaline Dupas, Michael Kremer, and Samuel Sinei, "Education and HIV/AIDS Prevention: Evidence from a randomized evaluation in Western Kenya," World Bank Policy Research Working Paper #4024, June Lecture 3: Poverty and Human Capital (2): The Demand for Health Jessica Cohen and Pascaline Dupas, Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment, forthcoming Quarterly Journal of Economics Dupas, Pascaline, What matters (and what does not) in households' decision to invest in malaria prevention?, American Economic Review: Papers and Proceedings 2009, 99(2):

3 Thornton, Rebecca L "The Demand for, and Impact of, Learning HIV Status.," American Economic Review, 98 (5):, Lecture 4: Poverty and Human Capital (3): The Primacy of Education Goux, Dominique and Eric Maurin (2007), Close Neighbours Matter: Neighbourhood Effects on Early Performance at School, Economic Journal, 2007, 117:1-24 "The Primacy of Education," in UP Glewwe, Paul (2002), "Schooling and Skills in Developing Countries: Education Policies and Socioeconomic Outcomes," Journal of Economic Literature 40, June 2002, Lecture 5: Poverty and Human Capital (3): The Supply for Education Banerjee, Abhijit, Shawn Cole, Esther Duflo, and Leigh Linden (2007), Remedying Education: Evidence from Two Randomized Experiments in India, Quarterly Journal of Economics, Vol. 122, No. 3, Pages Kremer, Michael, Randomized Evaluations of Educational Programs in Developing Countries: Some Lessons, American Economic Review, May 2004 Abhijit Banerjee and Esther Duflo, "Adressing Absence", Journal of Economic Perspectives 20(1), May 2005, Lecture 6: Poverty and Human Capital (4): The Demand for Education Kremer, Michael, Edward Miguel, and Rebecca Thornton. "Incentives to Learn", forthcoming Review of Economics and Statistics Child Labor Edmonds, Eric and Nina Pavcnik (2005), "Child Labor in the Global Economy," Journal of Economic Perspectives, Winter "Policy Dilemmas for Controlling Child Labor" in UP Education Theodore Schultz, "Capital Formation by Education," Journal of Political Economy 68(6), December 1960, Parish, William and Robert Willis (1993), Daughters, Education, and Family Budgets: Taiwan Experiences Journal of Human Resources, 28(4) Emmanuel Skoufias and Bonnie McClafferty, "Is PROGRESA Working? Summary of the Results of an Evaluation by IFPRI" IFPRI FCND DP #118, 2001 Lecture 7: Poverty and the Markets (2): Credit and Investment

4 Karlan, Dean and Jonathan Zinman (2008), "Observing unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment", forthcoming Econometrica Credit and Investment DE Ch 14 "Credit, Intermediation, and Poverty Reduction" in UP Abhijit Banerjee and Esther Duflo, What do Banks (not) do?, MIT Manuscript 2004 Dean Karlan and Jonathan Zinman, "Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts," Dartmouth Manuscript 2007 Dean Karlan and Jonathan Zinman, "Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment," Dartmouth, Manuscript 2006 The microcredit promise Beatriz Armendariz and Jonathan Morduch, "Microfinance: Where do we stand?" in Charles Goodhart, editor, Financial Development and Economic Growth: Explaining the Links. Basingstoke, Hampshire, UK: Palgrave Macmillan, 2004 Dean Karlan and Nathanael Goldberg, "The Impact of Microfinance: A Review of methodological Issues," Yale Manuscript 2006 Morduch, Jonathan (1999b), The Microfinance Promise, Journal of Economic Literature, 37 (December), Lecture 8: Poverty and the Markets (3): Land and Property Rights Field, Erica, (2007), "Entitled to Work: Urban Property Rights and Labor Supply in Peru," Quarterly Journal of Economics, Vol. 122, No. 4, Pages Land DE 11 & 12 "The Role of Agriculture in Development" in UP Land Reform. Banerjee, Abhijit (1999), "Land Reform: Prospects and Strategies," MIT Mimeo Christopher Woodruff, "Review of de Soto's The Mystery of Capital," Journal of Economic Literature, December 2001, Abhijit Banerjee, Paul Gertler, and Maitreesh Ghatak (2001), Empowerment and Efficiency: Tenancy Reform in West Bengal, Journal of Political Economy 110(2), 2002 Erica Field, "Entitled to Work: Informal Enterprise in Urban Peru," Development Outreach, March 2005 Sebastian Galiani and Ernesto Schargrodsky, "Property Rights of the Poor: Effects of Land Titling," Universidad Torcuato Di Tella Manuscript, 2006 Udry, Christopher (1996), "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, Vol. 104 (5), pp Markus Goldstein and Christopher Udry (2005), "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Yale Manuscript. Economics 24 Winter 2008 Syllabus, 5 Lecture 9: Poverty and the Markets (4): Risk and Insurance

5 Dupas, Pascaline and Jonathan Robinson (2009), "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya", NBER Working Paper Insurance DE Ch 15 Townsend, Robert (1995), "Consumption Insurance: An evaluation of risk bearing systems in low income countries," Journal of Economic Perspectives 9(3), Insurance Failures "Micro-insurance: The Next Revolution?" in UP Morduch, Jonathan, "Between the State and the Market: can Informal Insurance Patch the Safety Net?" World Bank Research Observer 14(2), August 1999, Elizabeth Frankenberg, James Smith, and Duncan Thomas, "Economic Shocks, Wealth, and Welfare," Journal of Human Resources 38(2), 2003, Edward Miguel, "Poverty and Witchkilling," Review of Economic Studies, forthcoming Lecture 10: Poverty and the Political Economy (1): Public Goods Banerjee, Abhijit and Rohini Somanathan (2006), "The Political Economy of Public goods: Some evidence from India," MIT Manuscript DE - Appendix to Ch. 17 "Public Goods and Economic Development," in UP "Ethnic Diversity and Poverty Reduction," in UP Abhijit Banerjee and Rohini Somanathan, "The Political Economy of Public goods: Some evidence from India," MIT Manuscript Prenab Bardhan, Jean-Marie Balan, Sanghamitra Das, Dilip Mookherjee, and Rinki Sarkar, "The Environmental Impact of Poverty: Evidence from Firewood Collection in Rural Nepal," Boston University Institute for Economic Development Working Paper #126, Lecture 11: Poverty and the Political Economy (2): Corruption Ben Olken (2007), "Monitoring Corruption: Evidence from a Field Experiment in Indonesia," Journal of Political Economy 115(2), "Corruption and Development" in UP Abhijit Banerjee, "A Theory of Misgovernance," Quarterly Journal of Economics 112(4), 1997, Raymond Fisman and Edward Miguel, "Cultures of Corruption: Evidence from Diplomatic Parking Tickets," BREAD Working Paper #122, May Fred Finan and Claudio Ferrez, Exposing Corrupt Politicians: The Effect of Brazil s Publicly Released Audits on Electoral Outcomes, Forthcoming, Quarterly Journal of Economics.

6 Fred Finan and Claudio Ferrez, Electoral Accountability and Corruption in Local Governments: Evidence from Audit Reports, May 2007 Lecture 12: Final Exam