Course

Unit 1

Unit I Introduction to Development Policy and Measurement. Indicators of growth, development and poverty. Historical trends in income, poverty and inequality. Overview of development challenges: poverty traps, institutional failures, coordination problems.

Unit 2

Unit II Methodological Foundations of Development Microeconomics. Role of evidence and experimentation in policy. The counterfactual problem and selection bias. Randomized Control Trials (RCTs) and quasi-experimental methods. Needs assessment, process evaluation, and cost-benefit analysis. Ethics, external validity, and scaling challenges in field experiments.

Unit 3

Unit III Development Microeconomics: Human Capital, Health, and Entrepreneurship. Education demand, returns, and constraints. Nutrition, health productivity, and the capacity curve. Behavioral and informational barriers to uptake of preventive healthcare interventions. Entrepreneurship and heterogeneity in returns: identifying who benefits most from credit and training programs.

Unit 4

Unit IV Development Macroeconomics: Growth, Structural Change, and Industrial Policy. Coordination failures and multiple equilibria. Structuralist and neo-structuralist models. Import substitution and export orientation. The Washington Consensus and its critique. Strategies and tools of industrial policy. Product space analysis. Growth identification and facilitation framework.

Unit 5

Unit V Political Economy and Structural Determinants of Development. Deep determinants: geography, institutions and culture. Evaluating institutions: efficiency vs. fairness. A model of institutional power and distribution. Institutional change and reform. Growth and inequality: theoretical models and empirical findings. Social mobility.

Text Books / References

Textbooks and Papers: Banerjee, A. V., & Duflo, E. (2011). Poor economics: A radical rethinking of the way to fight global poverty. PublicAffairs Store. Todaro, M. P., & Smith, S. C. (2020). Economic development. Pearson UK. Ray, D. (1998). Development economics. Princeton University Press. Kaushik Basu. (2003). Analytical Development Economics: The Less Developed Economy Revisited. The MIT Press. Acemoglu, D. (2009). Introduction to modern economic growth. Princeton, N.J. Deaton, A. (1992). Household saving in LDCs: Credit markets, insurance and welfare, Scandinavian Journal of Economics. Deaton, A. (1991). Saving and Liquidity Constraints. Econometrica. Banerjee, A., & Mullainathan, S. (2010). The shape of temptation: Implications for the economic lives of the poor (No. w15973). National Bureau of Economic Research. Genicot, G., & Ray, D. (2003). Group formation in risk-sharing arrangements. The Review of Economic Studies, 70(1), 87-113. Besley, T., & Coate, S. (1995). Group lending, repayment incentives and social collateral. Journal of Development Economics, 46(1), 1-18. Greenwood, J., J. M. Sanchez, et al. (2013) Quantifying the Impact of Financial Development on Economic Development. Review of Economic Dynamics 16, no. 1: 194215. Allen, R. (2017). Absolute Poverty: When Necessity Displaces Desire. American Economic Review 107(12): 3690-3721. Jones, C., and P. Klenow. (2016). Beyond GDP: Welfare Across Countries and Time. American Economic Review 106: 2426-2457. Mankiw, N.G., D. Romer, and D. Weil. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics 107(2): 407-437. Reference Books: Bardhan, Pranab and Christopher Udry. Development Microeconomics. Oxford: Oxford University Press, 1999. Banerjee, Abhijit, Roland Benabou and Dilip Mookherjee (Editors), Understanding Poverty, Oxford: Oxford University Press, 2006. Banerjee & Duflo (2019). Good Economics for Hard Times. Collins, D., Morduch, J., Rutherford, S., & Ruthven, O. (2009). Portfolios of the poor: how the worlds poor live on $2 a day. Princeton University Press. Deaton, A. (1997). The analysis of household surveys: a microeconometric approach to development policy. World Bank Publications. Karlan, D. S., & Appel, J. (2011). More than good intentions. New York: Dutton.

Prerequisite: Economics for Public Policy, Research Methods for Policy Studies I&II

Summary: The cause aims to introduce students to the main issues of development economics in the context of policy formulation. The course is focused on the issues of economic growth, poverty, and inequality and covers a set of analytical tools and frameworks that are applicable to a wide variety of developmental issues. The students will be exposed to modern empirical methods of impact evaluation such as multivariate regression, regression discontinuity design, instrumental variables, randomized control trials and others. In this course we will initially approach these questions from a macro perspective and later introduce a microeconomic view of the problems. The course prepares students to critically evaluate the scope and direction of policy interventions and formulate their own recommendations on alleviating the root causes and consequences of poverty as well as other pressing developmental issues.

Course Objectives:

1. To provide students with a comprehensive understanding of major theories and paradigms in development economics and policy.
2. To explore the role of structural factors such as institutions, governance, geography, and historical legacies in shaping development outcomes.
3. To equip students with the tools and methodologies necessary to evaluate the impact of development policies on poverty alleviation, inequality reduction, and sustainable development.
4. To highlight the social and environmental dimensions of development, including issues related to gender equality, environmental sustainability, and social justice.
5. To foster students’ ability to design innovative and contextually appropriate development policies that address the multidimensional challenges of poverty and underdevelopment.

Course Outcomes:

CO1: Students will demonstrate a deep understanding of key development theories and their relevance to contemporary development challenges.

CO2: Students will be able to conduct rigorous policy analysis, identifying the strengths, weaknesses, and potential unintended consequences of development policies.

CO3: Students will demonstrate proficiency in conducting empirical research on development issues, including data collection, analysis, and interpretation.

CO4: Students will gain cross-cultural awareness and sensitivity to the diverse social, economic, and cultural contexts in which development policies are implemented.

CO5:Students will effectively communicate complex development concepts and policy recommendations to diverse stakeholders, including policymakers, practitioners, and local communities.

Skills:

• Students will develop critical thinking skills, enabling them to evaluate development policies from multiple perspectives and engage in informed policy debates.

• Students will develop ethical decision-making skills, considering the ethical implications of development policies and prioritizing approaches that promote social justice, human rights, and environmental sustainability.

• Students will develop the ability to generate innovative solutions to complex development challenges,thinking beyond conventional approaches and paradigms.

-Program outcome PO – Course Outcomes CO Mapping

Program Specific Outcomes PSO – Course Objectives – Mapping

*CA – Can be Quizzes, Assignment, Projects, and Reports, and Seminar