TrainingsMasterEconomicsCoursesDevelopment economics

Master EconomicsUE Development economics

Content

This course is meant to train students on recent topics in development economics bridging the gap between theoretical and empirical research and the implementation of public policy to eradicate poverty. In this sense, the course will allow the students to apply the analytical tools they acquired during the first year of the master to specific questions and to relate them to targeted policies and their effectiveness.

This course will focus on microeconomic issues, seeking to understand the factors and constraints influencing individual-level, household-level, or firm-level decision-making in developing countries.

We will cover a series of broad topics. The first will concern human capital. Health and education are desirable per se, but they are also important determinants of productivity and of fertility levels (and of each other). What prevents poor households from becoming healthier and to acquiring more education ? Why are girls often at a disadvantage within the household ? What policies can improve health and education levels in developing countries ?

The second broad topic will concern financial capital. Most people in developing countries are self-employed earning highly irregular income, either a daily profit in the informal sector when business is good or only realizing income once or twice a year in farming when the harvest is good. How do households deal with such irregular income ? Can they borrow and save, and if not why not ? How and how well do informal insurance networks work ? Is microfinance the solution to all problems ?

We will also consider the importance of physical capital. Since the majority of poor households live in rural areas, agricultural productivity is central determinant of income for most of the world’ poor. How do the land distribution, property rights and access to technology matter for agricultural productivity ?

To summarize, the course will cover complementary topics in the development literature linking relevant econometric techniques and theoretical models to the implementation of relevant public policies.

Course outline :

The detailed list of the topics covered (and the related plan of the course) is the following :

INTRODUCTION

  • What is economic development ? Measuring poverty.

HUMAN CAPITAL

1. Determinants of health : the household behaviour

  • Nutrition based poverty traps
  • Adoption and use of health products

2. Education :

  • The demand for education and child labour
  • The returns to education

3. Fertility, gender gaps and

  • The determinants of fertility choices and the missing women
  • Intra-household decision making

FINANCIAL CAPITAL

1. Microfinance and micro-savings

  • Access to credit in poor countries
  • Why don’t the poors save more ?

2. Coping with risk

  • Income risk and agricultural production
  • Informal safety nets

PHYSICAL CAPITAL

  • Property rights and technology adoption :
  • Property right and farm productivity
  • Technology adoption and information

Professional skills

  • Being able to understand and replicate simple theoretical models applied to core issues of development economics
  • Being able to understand and replicate simple econometric analysis to analyse core issues of development economics
  • Being able to understand how to test relevant theoretical model through econometric techniques
  • Being able to link the economic analysis of development issues to the design and implementation of effective public policies

Language used

Main language used by this course: Anglais.

Bibliography

Textbooks

  • Understanding Poverty, A. Banerjee, R. Benabou, and D. Mookherjee, editors, Oxford University Press : March 2006.
  • Development Economics by Debraj Ray

Introduction + Topic 1.1

  • UP Chapter 1 (Angus Deaton) : “Measuring Poverty” (12 pages) note : available online for those who are still in the process of ordering books.
  • Banerjee et al. (2015). “A Multi-faceted Program Causes Lasting Progress for the Very Poor : Evidence from Six Countries” (May 2015) Science, 348(6236), pp. 772.
  • Dasgupta, Partha and Debraj Ray (1986), “Inequality as a Determinant of Malnutrition and Unemployment : Theory,” Economic Journal 96 (384) : 1011-1034.
  • Jensen, Robert and Nolan Miller (2011). “Do Consumer Price Subsidies Really Improve Nutrition ?” Review of Economics and Statistics, 93(4), p. 1205-1223
  • Haushofer, Johannes and Jeremy Shapiro (2016). “The Short-Term Impact of Unconditional Cash Transfers to the Poor : Evidence from Kenya”. Quarterly Journal of Economics. 131(4), 1973–2042

Topic 1.2

  • Section 5 in : Dupas, Pascaline, and Ted Miguel (2016). “Impacts and Determinants of Health Levels in Low-Income Countries,” Handbook of Field Experiments, Eds. A. Banerjee and E. Duflo.
  • Dupas, Pascaline (2014). “Short-Run Subsidies and Long-Run Adoption of New Health Products : Evidence from a field experiment”. Econometrica.
  • Cohen, Jessica, and Pascaline Dupas (2010). “Free Distribution or Cost-Sharing ? Evidence from a Randomized Malaria Prevention Experiment.” Quarterly Journal of Economics, 125(1) : 1–45.
  • Ashraf, Nava, James Berry and Jesse Shapiro. (2010). “Can Higher Prices Stimulate Product Use ? Evidence from a Field Experiment in Zambia.” American Economic Review 100 : 2383–2413.
  • Dupas, Pascaline (2009). “What matters (and what does not) in households' decision to invest in malaria prevention ?” American Economic Review, 99(2) : 224-30.
  • Cohen, Jessica, Pascaline Dupas and Simone Schaner (2012). “Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment”.
  • Field, Erica, Rachel Glennerster and Reshma Hussam (2011). “Throwing the Baby out with the Drinking Water : Unintended Consequences of Arsenic Mitigation Efforts in Bangladesh”. Working paper.

Topic 2.1

  • Attanasio, Orazio, Costas Meghir and Ana Santiago (2012). “Education Choices in Mexico : Using a Structural Model and a Randomized Experiment to Evaluate Progresa”. Forthcoming in Review of Economic Studies.
  • Jensen, Robert (2012). “Do Labor Market Opportunities Affect Young Women's Work And Family Decisions ? Experimental Evidence From India”. Quarterly Journal of Economics 127(2), p. 753-792.
  • Jensen, Robert (2010). “The (Perceived) Returns to Education and the Demand for Schooling," Quarterly Journal of Economics, 125(2), p. 515-548.
  • Benhassine, Najy, Florencia Devoto, Esther Duflo, Pascaline Dupas and Victor Pouliquen (2015). “Replacing the Shove with a Nudge : A Small Unconditional Transfer for Education”. AEJ Economic Policy.

Topic 2.2

  • Duflo, Esther (2001), “Schooling and Labor Market Consequences of School Construction in Indonesia : Evidence from an Unusual Policy Experiment,” American Economic Review 91 (4) : 795-813.
  • Duflo, Esther. « The Medium Run Effects of Educational Expansion : Evidence from a Large School Construction Program in Indonesia. » Journal of Development Economics 74, no. 1 (2004) : 163-197.
  • Bills, Mark, and Pete Klenow. « Does Schooling Cause Growth ? » The American Economic Review 90, no. 5 (2000) : 1160-1183.
  • Foster, Andrew D. and Mark R. Rosenzweig (1996). “Technical Change and Human-Capital Returns and Investments : Evidence from the Green Revolution” The American Economic Review, 86(4) : 931-953
  • Ozier, Owen (2016). “The Impact of Secondary Schooling in Kenya : A Regression Discontinuity Analysis”. Journal of Human Resources, forthcoming.
  • Psacharopoulos, George (1994), “Returns to Investment in Education : A Global Update,” World Development 22 (9) : 1325-1343.
  • Rosenzweig, Mark (1995), “Why Are There Returns to Schooling ?” American Economic Review P&P 85 (2) : 153-158.
  • Munshi, Kaivan, and Mark Rosenzweig (2006). “Traditional Institutions Meet the Modern World : Caste, Gender, and Schooling Choice in a Globalizing Economy.” American Economic Review 96(4) :1225-1252.

Topic 3.1

  • Amartya Sen, “More Than 100 Million Women Are Missing,” New York Review of Books 37(2), December 20, 1990
  • Eliana Carranza (2014) “Soil Endowments, Female Labor Force Participation, and the Demographic Deficit of Women in India” AEJ applied Vol. 6, Issue 4 -- October 2014
  • Nancy Qian (2008). “Missing Women and the Price of Tea in China : The Effect of Sex-Specific Income on Sex Imbalance,” The Quarterly Journal of Economics, 123(3), August 2008.
  • Chattopadhyay, Ragabhendra, and Esther Duflo (2004). “Women as Policy Makers : Evidence from a Randomized Policy Experiment in India”. Econometrica. Vol. 72, No. 5.
  • Jayachandran, Seema, and Ilyana Kuziemko (2011). “Why Do Mothers Breastfeed Girls Less Than Boys ? Evidence and Implications for Child Health in India”, Quarterly Journal of Economics, 126(3), August 2011, pp. 1485-1538
  • Pauline Rossi and Léa Rouanet (2015). “Gender Preferences in Africa : A Comparative Analysis of Fertility Choices”. World Development, Vol. 72, pp.326-345, 2015.
  • Lori Beaman, Esther Duflo, Rohini Pande and Petia Topalova (2012). “Female Leadership Raises Aspirations and Educational Attainment for Girls : A Policy Experiment in India”
  • Elaina Rose (1999). “Consumption Smoothing and Excess Female Mortality in Rural India.” Review of Economics and Statistics 81, no. 1 : 41-49.

Topic 3.2

  • Ashraf, Nava, “Spousal Control and Intra–Household Decision Making : An Experimental Study in the Philippines.” American Economic Review
  • Ashraf, Nava, Erica Field, and Jean Lee. “Household Bargaining and Excess Fertility : An Experimental Study in Zambia.” American Economic Review.
  • Anderson, S., and J.-M. Baland. ‘The Economics of Roscas and Intrahousehold Resource Allocation”. Quarterly Journal of Economics, 117(3) : 963–95.
  • Doepke, M., and M. Tertilt (2014). ‘Does Female Empowerment Promote Economic Development ?’.
  • Guirkinger, C., and J.P. Platteau (2015). ‘Transformation of the Family under Rising Land Pressure : A Theoretical Essay’. Journal of Comparative Economics, 43(1) : 112–37

Topic 4.1

  • Robert Cull, Asli Demirgüç-Kunt and Jonathan Morduch (2009). “Microfinance Meets the Market”. February 2009. Journal of Economic Perspectives 23(1), Winter : 167-192.
  • Erica Field, Abraham Holland and Rohini Pande (2014). “Microfinance : Points of Promise.”
  • Debraj Ray DE textbook, chapter 14

Topic 4.2

  • Gugerty, Mary Kay (2007), “You Can’t Save Alone : Commitment in Rotating Savings and Credit Associations in Kenya.” Economic Development and Cultural Change 55 (2007) : 251-282.
  • Dean Karlan, Aishwarya Ratan, Jonathan Zinman (2014). “Savings By and For the Poor : A research review and agenda”. Review of Income and Wealth, 60(1), pp. 36-78.
  • Dupas, Pascaline and Jonathan Robinson (2013). “Why don’t the poor save more ? Evidence from health savings experiments”. American Economic Review, 103(4), pp. 1138-71.
  • Dupas, Pascaline and Jonathan Robinson (2013). “Savings Constraints and Microenterprise Development”. American Economic Journal : Applied Economics, January 2013.

Topic 5.1

  • Udry, Christopher (1990), “Credit Markets in Northern Nigeria : Credit as Insurance in a Rural Economy.” World Bank Economic Review 4 (3) : 251-269.
  • Karlan, Dean, Robert Osei, Isaac Osei-Akoto and Christopher Udry (2013), “Agricultural Decisions after Relaxing Credit and Risk Constraints.” Quarterly Journal of Economics
  • Cole, Shawn et al. (2013), “Barriers to Household Risk Management : Evidence from India.” American Economic Journal : Applied Economics 5 (1) : 104-35.

Topic 5.2

  • Dercon, Stefan (2002), “Income Risk, Coping Strategies, and Safety Nets.” World Bank Research Observer 17 (2) : 141-166.
  • Townsend, Robert (1994), “Risk and Insurance in Village India.” Econometrica 62 (3) : 539-591.
  • Ambrous, A.,M. Mobious, AND A. Szeidl (2014) : “Consumption Risk-Sharing in Social Networks,” American Economic Review, 104 (1), 149–182. [677]
  • Fafchamps, M., and S. Lund (2003) : “Risk Sharing Networks in Rural Philippines,” Journal of Development Economics, 71, 261–287. [675,682]
  • Foster, A. D., and M. R. Rosenzweig (2001) : “Imperfect Commitment, Altruism, and the Family : Evidence From Transfer Behavior in Low-Income Rural Areas,” Review of Economics and Statistics.

Topic 6.1

  • Woodruff, C. (2001), “Review of de Soto's The Mystery of Capital”, Journal of Economic Literature 39(4), 1215-1223. (9 pages)
  • Udry, Christopher (2011). “Land Tenure”, in Ernest Aryeetey, Shantayanan Devarajan and Ravi Kanbur, eds. The Oxford Companion to the Economics of Africa, 2011 (6 pages).
  • Allendorf, Keera (2007). “Do Women’s Land Rights Promote Empowerment and Child Health in Nepal ?” World Development 35(11) : 1975–1988. (13 pages).
  • Field, Erica, and Maximo Torero (2006). “Do Property Titles Increase Credit Access Among the Urban Poor ? Evidence from a Nationwide Titling Program.” Working paper.
  • Sebastian Galiani and Ernesto Schargrodsky (2010). “Property rights for the poor : Effects of land titling”. Journal of Public Economics.
  • Entitled to Work : Urban Tenure Security and the Labor Supply in Peru, Quarterly Journal of Economics, November 2007, 4(122) : 1561-1602.
  • Gollin, Doug, David Lagakos and Mike Waugh (2012) “The Agricultural Productivity Gap in Developing Countries”. Quarterly Journal of Economics
  • Goldstein, Markus, and Chris Udry (2008). “The Profits of Power : Land Rights and Agricultural Investment in Ghana,” Journal of Political Economy, December 2008

Topic 6.2

  • Kyle Emeick, Alain de Janvry, and Elisabeth Sadoulet and Manzoor H. Dar (2016). Technological innovations, downside risk, and the modernization of agriculture, American Economic Review.
  • Suri, Tavneet (2011). “Selection and Comparative Advantage in Technology Adoption", Econometrica, 79 (1), pp. 159-209.
  • Duflo, Esther, Michael Kremer and Jonathan Robinson (2011), “Nudging Farmers to Use Fertilizer : Theory and Experimental Evidence from Kenya” American Economic Review 101 (6) : 2350-2390.
  • Aker, Jenny C. (2010). “Information from Markets Near and Far : The Impact of Mobile Phones on Grain Markets in Niger”. American Economic Journal : Applied Economics 2(3) : 46-59.
  • Aparajita Goyal (2010). « Information, Direct Access to Farmers, and Rural Market Performance in Central India » American Economic Journal : Applied Economics
  • AD Foster, MR Rosenzweig, “Microeconomics of technology adoption” Annual Review of Economics
  • O Bandiera, I Rasul “Social networks and technology adoption in northern Mozambique”

Structure and organisation

The course will consist of 8 lectures of 3 hours. The final grade will be the weighted average of a final written exam (2/3) and two « problem sets » (1/3) which will be given after the third and sixth week of classes.

Volume of teachings

  • Lectures: 24 hours

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