ECON 43850 01 WORLD POVERTY AND INEQUALITY ACROSS NATIONS Fall 2010, M W, 1.30-2.45 PM, DeBartolo, 333 Instructor: Amitava Dutt, Decio 420, Office ph: 6317594, email: adutt@nd.edu, web page: www.nd.edu/~adutt. Office Hours: M W, 10:30 to 11.30 AM, Tues 2:00 to 3.00 PM or by appointment 1. Course Description There are vast differences in levels of income and output between what are called economically developed and less-developed countries of the world. Most of the world s poor live in the less-developed countries, although poverty also exists in the developed countries. This course examines the causes and consequences of world poverty and inequality across nations and discusses possible ways of reducing such poverty and inequality. Focusing on countries, it examines the extent of world poverty and inequality, and studies trends in them. It examines why world poverty and inequality persists, focusing mainly on factors involving interactions between rich and poor countries (such as international trade, international capital flows and technology transfers) and the consequences of globalization. It explores why people all over the world should be concerned about these problems and what can be done to deal with them. 2. Prerequisites Basic high-school algebra and geometry skills will be assumed. Some background in economics and statistics is useful but not necessary. Some of the material will be more sophisticated in nature, but I will cover the material required to prepare students for that material. 3. Course plan For the first couple of days I will provide a brief overview of the material covered in the syllabus and reading list. After that you will be asked to select two topics of your choice on which you will write papers and make in-class presentations and lead discussions. You can formally select topics after discussing it with me and sending an email to confirm. All students are required to participate in discussions on each topic. The final version of one paper is due on or before October 13 (the last class day before the midsemester break) and the other on or before December 8 (the last day of class). The recommended length of each paper is 14 to 16 pages (including notes and references). You are required to turn in an outline and at least one draft of each paper before submitting the final versions, the draft at least two weeks before the due date of the paper and the draft one week before. We will try to follow this schedule, although deviations may well occur. Please check my website for revised versions of the schedule and this syllabus as the semester progresses. 25-Aug Introduction 1
30-Aug World Poverty and inequality 1-Sep Inequality across nations 6-Sep Inequality across nations 8-Sep Why it matters 13-Sep Growth, development, underdevelopment 15-Sep Growth, development, underdevelopment 20-Sep Globalization 22-Sep Globalization 27-Sep Trade and inequality outline of 1st paper due for this date 29-Sep Trade and inequality 4-Oct Trade and inequality Draft of 1st due before this date 6-Oct Factor movements 11-Oct Factor movements 13-Oct Factor movements 1st paper due 18-Oct Fall break 20-Oct Fall break 25-Oct Technology transfers 27-Oct Technology transfers 1-Nov Technology transfers 3-Nov Environmental and social factors 8-Nov Environmental and social factors 10-Nov Environmental and social factors 15-Nov International Political Economy 17-Nov International Political Economy 22-Nov Political Economy outline of 2nd paper due before this date 24-Nov Thanksgiving break 29-Nov Political Economy Draft of 2nd paper due for this date 1-Dec Political Economy 6-Dec What is to be done 8-Dec What is to be done 2nd paper due 4. Grading The grading will be based on the following: 45 % on the first paper. 45 % on the second paper. 10 % on presentations and class participation. 5. Syllabus and Reading List Don t be too concerned about the length of the reading list. You don t have to read all of it unless you really want to. I will mention the key readings for each class meeting ahead of time. Several of the key readings are available on electronic reserve (and marked with **); many others (books) are available on regular reserve (marked with *); reading marked with *** are available on concourse under this course. 2
General Readings: *** UNDP (United Nations Development Programme) Human Development Report world, Oxford University Press. * Ha-Joon Chang, The Bad Samaritans, Bloomsbury Press, 2008. * Jagdish Bhagwati, In Defense of Globalization, with a new afterword, Oxford University Press, 2007. and the United Nations, 2008. Syllabus 1. World Poverty and Inequality * Sen, Amartya (1999). Development as Freedom, New York: Anchor Books, 1999, chaps. 1-3. * Dutt, Amitava Krishna and Wilber, Charles (2010). Economics and Ethics: An Introduction, Palgrave-Macmillan, chapters 8, 9. *** UNDP (United Nations Development Programme), Human Development Report world, Oxford University Press, chap. 1. *** Ranis, Gustav and Stewart, Frances (2010). Success and Failure in Human Development, 1970-2007, Human Development Research Paper, UNDP. 2. Inequality Across Nations ** Sala-i-Martin, Xavier (1996). The Classical Approach to Convergence Analysis, Economic Journal, 106 (137), 1019 36. Pritchett, Lant (1997). Divergence, Big Time, Journal of Economic Perspectives, 11:3, 3 17. ** Jones, Charles I. (1997). On the Evolution of the World Income Distribution, Journal Economic Perspectives, 11:3, 19 36. * Milanovic, Branko (2005) Worlds Apart. Measuring International and Global Inequality, Princeton University Press, chaps. 1 through 11. 3
*** World Bank, World Development Report 2006, Equity and Development, World Bank and Oxford University Press, 2005, chapter 3. and the United Nations, 2008, chapters 1, 2. 3. Why world poverty and inequality matter * Milanovic, Branko (2005) Worlds Apart. Measuring International and Global Inequality, Princeton University Press, chap. 12. *** UNDP (United Nations Development Programme), Human Development Report world, Oxford University Press, chap. 2, 5. *** World Bank, World Development Report 2006, Equity and Development, World Bank and Oxford University Press, 2005, chapter 4, skim chapters 5, 6. ** Sachs, Jeffrey D. (2001). The strategic significance of global inequality, Wilson Quarterly, 24(3), 187-98. 4. Growth, development and underdevelopment Dutt, Amitava Krishna (2008). General long-run approaches to growth and development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 1, Edward Elgar. * Sachs, Jeffrey D. (2005). The end of poverty. Economic possibilities for our time, New York, The Penguin Press, 2005, chap. 3. 5. Globalization and inequality * Myrdal, Gunnar (1957). Rich Lands and Poor, New York: Harper & Brothers (also published as Economic Theory and Under-developed Regions, London: Duckworth). * Chang, Ha-Joon (2008), The Bad Samaritans, Chap. 1 Glenn, John (2007). Globalization. North-South Perspectives, London: Routledge, chapters 1-3. ** Dutt, Amitava Krishna and Mukhopadhyay, Kajal (2005). Globalization and the Inequality Among Nations: A VAR approach, Economics Letters, 88, September, 295-99. 6. Trade and inequality 4
** Singer, Hans (1950). The Distribution of Gains between Investing and Borrowing Countries. American Economic Review, Papers and Proceedings, Vol. 4 No. 2, May, 473-85. * Chang, Ha-Joon (2008). The Bad Samaritans, Chaps. 2 and 3 ** UNDP (United Nations Development Programme), Human Development Report world, Oxford University Press, chap. 3. ** Dutt Amitava Krishna (2006). Globalization, trade liberalization and conflict: a Southern perspective, in B. N. Ghosh, ed., Globalisation and the Third World: A Study of Negative Consequences, Houndmills, UK and New York: Macmillan / Palgrave, pp. 233-50. Rodriguez, Francisco (2008). Trade and Development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. Sapsford, David (2008). Terms of trade and economic development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. and the United Nations, 2008, chapter 3. ** Chang, Ha-Joon (2003). Kicking away the ladder globalization and economic development in historical perspective, in J. Michie, ed., The Handbook of Globalisation, Cheltenham: Edward Elgar. 7. Factor movements and inequality * Chang, Ha-Joon (2008). The Bad Samaritans, Chap 4. ** Chang, Ha-Joon (1998). Globalisation, transnational corporations, and economic development, in D. Baker, G. Epstein and R. Pollin, eds., Globalisation and progressive economic policy, Cambridge: Cambridge University Press, pp. 97-113. * Easterly,William The elusive quest for growth, Cambridge, Mass: MIT Press, chaps. 2, 6, 7. *** Dutt, Amitava Krishna (2006). The flawed logic of capital account liberalization, Economic and Political Weekly (India), May 13-19, vol. 41, No. 19, 1850-53. * Stiglitz, Joseph (2002). Globalization and its discontents, New York: W W Norton, chapter 3, p. 67-73, chapter 4. 5
*** UNDP (United Nations Development Programme), Human Development Report world, Oxford University Press, chap. 3. * Bhagwati, Jagdish (2004). In defense of globalization, Oxford and New York: Oxford University Press, 2004, chapters 12, 13, 14. Griffith-Jones, Stephanie (2008). Private capital flows and development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. * Sachs, Jeffrey D. (2005). The end of poverty. Economic possibilities for our time, New York, The Penguin Press, chap. 13. Rivera-Batiz, Francisco (2008). International migration and the brain drain, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. *** UNDP (2009). Human Development Report, 2009, Overcoming barriers: Human mobility and development, Palgrave-Macmillan, Overview, chapters 2 and 3. 8. Technology transfers and convergence? ** Lucas, Robert E. (2000). Some macroeconomics for the 21 st century, Journal of Economic Perspectives, 14(1), Winter 2000, 159-68. * Chang, Ha-Joon (2008).The Bad Samaritans, Chap. 6. ** Chang, Ha-Joon (2003). Globalisation, economic development and the role of the state, London and New York: Zed Books and Third World Network, chapter 8. ** Abramovitz, Moses (1986). Catching Up, Forging Ahead, and Falling Behind, Journal of Economic History, 46:2, 385 406. ** Baumol, William J. (1986). Productivity Growth, Convergence, and Welfare: What the Long-Run Data Show, American Economic Review, 76:5, 1986, 1072 85. ** Amsden, Alice (2001), The rise of the rest, Oxford: Oxford University Press, 2001, chap. 3. *** Boldrin, Michele and Levine, David K. (2008). Against Intellectual Monopoly, Cambridge: Cambridge University Press, esp. chapters 1-4, 6, 8. Chin, Judith C. and Grossman, Gene M. (1990). Intellectual Property Rights and North- South Trade, in Ronald W. Jones and Anne O. Krueger, ed., The political economy of international trade: Essays in honor of Robert E. Baldwin, Oxford: Blackwell. 6
*** UNDP (1999). Human Development Report 1999, Globalization with a Human Face, Oxford: Oxford University Press, chap. 2. 9. Environmental and social factors *** UNDP (2007). Human Development Report, 2007-2008: Fighting climate change, Human solidarity in a divided world, Palgrave-Macmillan, Overview, chapters 1 and 2. * Copeland, B. R. and Taylor, M. S. (2005). Trade and the environment, Princeton: Princeton University Press, esp. chapters 1, 3, 5 and 6. * Roberts, J Timmons and Parks, Bradley C. (2007). A Climate of Injustice. Global Inequality, North-South Politics and Climate Policy, Cambridge, Mass: MIT Press, esp. chapters 3, 4, 5. * Bhagwati, Jagdish (2004). In defense of globalization, Oxford and New York: Oxford University Press, chapters 10, 11, 17. *** Singh, Ajit and Zammit, Ann (2004). Labor standards and race to the bottom, ESRC Center for Business, University of Cambridge, Working Paper. 10. International political economy and international institutions * Sachs, Jeffrey D. (2005). The end of poverty. Economic possibilities for our time, New York, The Penguin Press, 2005, chap. 11. Raffer, Kunibert (2008). International institutions in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. Radelet, Steven (2008). Foreign aid, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. and the United Nations, 2008, chapter 4. * Chang, Ha-Joon (2008). The Bad Samaritans, Chapter 7. 11. Political economy, culture and institutions * Chang, Ha-Joon (2008). The Bad Samaritans, Chapters 5, 8, 9. and the United Nations, 2008, chapter 5. Evans, Peter (2008). Interdisciplinary approaches to development: the institutional 7
Turn, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 1, Edward Elgar. Gray, Cheryl W. (2008). Corruption and development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. Bardhan, Pranab (2008). Law and development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. Hoksbergen, Roland and Charles K. Wilber (2008). Culture and development, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar. 12. What is to be done? In addition to some of the material already referred to: *** World Bank, World Development Report 2006, Equity and Development, World Bank and Oxford University Press, 2005, chapter 10. * Chang, Ha-Joon (2008).The Bad Samaritans, Epilogue. * Amsden, Alice (2007). Escape from empire: the developing world's journey through heaven and hell, Cambridge, MA: MIT Press. 8