ECON 43850 01 WORLD POVERTY AND INEQUALITY ACROSS NATIONS Fall 2008, M W, 11.45 AM-1.00 PM, O Shaughnessy, 115 Instructor: Amitava Dutt, Decio 420, Office ph: 6317594, email: adutt@nd.edu, web page: www.nd.edu/~adutt. Office Hours: Mondays and Wednesdays, 3-4 PM, Mondays, 10-11 AM, and 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 the problems. 2. Prerequisites You are required to have already taken a principles or introductory courses in economics and statistics; intermediate courses in micro and macroeconomics, and econometrics, also provide useful background. Some of the material covered 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 their choice on which you will write papers and make in-class presentations and lead discussions. You can formally select topics after discussing it with the instructor 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 Monday before the midsemester break) and the other on or before December 10 (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. 1
Aug 27 Introduction Sept 1 World Poverty 3 Inequality across nations 8 Inequality across nations 10 Why it matters 15 Why it matters 17 Growth, development, underdevelopment 22 Growth, development, underdevelopment 24 Growth, development, underdevelopment 29 Globalization outline of 1 st paper due before this date Oct 1 Trade and inequality 6 Trade and inequality draft of 1 st paper due before this date 8 Trade and inequality 13 Factor movements 1 st paper due 15 Factor movements 20 Fall break 22 Fall break 27 Factor movements 29 Technology transfers Nov 3 Technology transfers 4 Technology transfers 10 Environmental and social factors 12 Environmental and social factors 17 Environmental and social factors 19 Political Economy 24 Political Economy outline of 2 nd paper due before this date 26 Thanksgiving break Dec 1 Political Economy 3 What is to be done draft of 2 nd paper due before this date 8 What is to be done 10 What is to be done 2 nd 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 2
of the key readings are available on electronic reserve (and marked with **); many others (books) are available on regular reserve (marked with *). General Readings: Branko Milanovic, Worlds Apart. Measuring International and Global Inequality, Princeton University Press, 2005, paperback, ISBN 10: 0-691-13051-5, 2007. UNDP (United Nations Development Programme) Human Development Report 2005: Oxford University Press, ISBN-10: 0195305116, Paperback Ha-Joon Chang, The Bad Samaritans, Bloomsbury Press, 2008, ISBN-10: 1596913991, ISBN-13 Syllabus 1. World Poverty UNDP (United Nations Development Programme), Human Development Report 2005: Oxford University Press, chap. 1. Amartya Sen, Development as Freedom, New York: Anchor Books, 1999, chaps. 1-3. 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. World Bank, World Development Report 2006, Equity and Development, World Bank and Oxford University Press, 2005, chapter 3. 3. Why world poverty and inequality matter Milanovic, Branko (2005) Worlds Apart. Measuring International and Global Inequality, Princeton University Press, chap. 12. 3
UNDP (United Nations Development Programme), Human Development Report 2005: 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, forthcoming. Todaro, Michael P. and Smith, Stephen C. (2002). Economic Development, 8 th ed., Boston: Addison-Wesley, 2002, chapters 4 and 5. Jones, Charles I. (2002), Introduction to Economic Growth, 2 nd ed., New York, W W Norton, 2002, chapters 2 and 5. Sachs, Jeffrey D. (2005). The end of poverty. Economic possibilities for our time, New York, The Penguin Press, 2005, chap. 3. Chang, Ha-Joon (2008). The Bad Samaritans, Chaps. 5, 8, 9 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 Dutt, Amitava Krishna (2008). North-South issues, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar, forthcoming, 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 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. 4
Chang, Ha-Joon (2008). The Bad Samaritans, Chaps. 2 and 3 Amsden, Alice H. (2007). Escape from Empire MIT Press, chap.5 UNDP (United Nations Development Programme), Human Development Report 2005: 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, forthcoming, 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. UNDP (United Nations Development Programme), Human Development Report 2005: Oxford University Press, chap. 3. Amsden, Alice H. (2007). Escape from Empire MIT Press, chap.4. Bhagwati, Jagdish (2004). In defense of globalization, Oxford and New York: Oxford University Press, 2004, chapters 12 13, 14. 5
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, forthcoming, 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, forthcoming, 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. 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. Deardorff, Alan V. (1992). Welfare effects of global patent protection, Economica, New Series, 59 (233), February, 35-51. 9. Environmental and social factors 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. 6
10. 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, forthcoming, Amsden, Alice H. (2007). Escape from Empire MIT Press, chaps. 1, 2, 3, 6-11. 11. 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. Radelet, Steven (2008). Foreign aid, in A. K. Dutt and J. Ros, International Handbook of Development Economics, Vol. 2, Edward Elgar, forthcoming, Chang, Ha-Joon (2008).The Bad Samaritans, Epilogue. 7