Econ Dev Theory, EvidencePol

3 Credits · Level: Graduate

This course is geared towards students in the MSFS international development (ID) concentration as well as those with an interest in poor countries and related poverty issues. The principal objective of the course is to familiarize students with the basic tools and theoretical concepts that development economists most frequently use, both to analyze and understand leading economic development issues, and to give relevant policy advice to decision makers in developing countries. Related empirical evidence is also examined with a view to verifying the relevance and utility of the theoretical concepts that are employed. Students are expected to attain a level of proficiency whereby they can hold their own and feel comfortable discussing economic development issues, particularly policy-related issues, with development practitioners and policymakers. The course starts with the basics: the meaning and measurement of development, including how to access and use important databases, particularly the World Development Indicators (WDI), the relationship between economic growth and development, and the overall growth and development experience of countries and regions in the developing world. With this foundation, the course then turns to the major subject areas, including: (i) theories of economic growth and their relevance for developing countries; (ii) growth accounting—how to decompose growth into its component parts and how to use this empirical tool to help identify the proximate causes of economic growth; (iii) the underlying long term determinants of economic growth and development—policies, institutions; human capital, natural resource endowments (geography), etc. (iii) theories of structural change—how rural agrarian societies transition to developed industrial economies and the associated internal migration and settlement issues; (iv) poverty and inequality, the linkages between them and their theoretical and empirical relationships with economic growth and development; (vi) policymaking in developing countries—specifically the role and functions of the state, public goods and externalities, evaluating public investments using tools such as cost-benefit analysis, and macroeconomic management including fiscal policy and the role of central banks and exchange rate regimes as they relate specifically to developing countries; (vi) foreign trade, finance and investment, building on the MSFS foundational course, International Trade and Finance, with specific applications and analysis in the context of developing countries; and (viii) the role and effectiveness of foreign aid and debt relief. The course ends with an overview of the current state and frontiers of development thinking today. The format of the classes is a mix of lectures, seminar-style discussions, and debates.