Department of Economics
Queen's University

ECON 239: Development Economics

Fall Term, 2010

Professor: Huw Lloyd-Ellis
Office: Dunning 320
Telephone: 533-2276
E-mail: lloydell@econ.queensu.ca
Lectures: Mondays 1:00 pm and Wednesday 11:30 pm in Dunning 14
Office Hours:
Mondays and Tuesdays 3:00-5:00 pm or by appointment
Course home page: http://qed.econ.queensu.ca/pub/faculty/lloyd-ellis/econ239
                              
Course Description:
ECON 239 studies key topics central to the process of economic development. A central theme of the course is the role of market and non-market institutions in influencing the development process. During the first few weeks we will discuss key principles, concepts and measurement issues associated with economic development, and consider alternative macroeconomic theories of growth and the associated evidence. We will then move on to consider specific issues and policy problems that are currently faced by developing nations. The topics are divided into those associated with natural resources (the agricultural sector, land markets and land reform), capital resources (the role of capital accumulation, credit constraints and the mobilization of savings), and human resources (rural labour markets, population growth and rural-urban migration). Finally, we will discuss the problems facing developing countries in their dealings with the global economy (international trade, sovereign debt crises, foreign investment and aid).

Grading: There will be 4 assignments, a midterm and a final exam with marks allocated as follows:

Assignments:
Assignments can be done in groups of up to 3 students. You may hand in one assignment per group, but make sure that the names and student numbers of all group members appear in alphabetical order on the front page of the assignment. The content of assignments will be correlated with exams, so make sure you understand everything on them. Answer guides will be provided on-line shortly after the deadline. Unless there is a valid reason, late assignments will be penalized 10% per day and will not be accepted at all once the answer guide has been made available.

Exams:
There will be no make-up mid-term exam. If you miss the mid-term exam for a valid (e.g. medical) reason and provide supportive evidence, I will allocate the mark to the final exam (so it will be worth 60%). Otherwise you will receive zero.

Q&A Page:
In addition to my office hours, I will be running an on-line Q&A page. If you e-mail me a question regarding the course material or assignments, I will post it (anonomously) together with my answer. If you have a question, check first to see if it has already been answered on the Q&A page.

Course Reading List

There is no single required text for this course. Instead readings taken from several texts and various articles are available online and on reserve in the library. In the list below, I have distinguished between "core readings", "further readings" and "case studies". You should try to read the core readings as carefully as possible. Further readings are optional unless I specifically ask about them on an assignment. I will use the case studies to provide concrete examples throughout the course, but I do not expect you to read these in detail.

Most of the core readings come from the following texts:
Economic Development by Michael P. Todaro and Stephen C. Smith (10th Edition, Pearson, 2009)
Economic Growth by David N. Weil (2nd edition, Pearson-Addison Wesley, 2009)
Economics of Development by D. Perkins, S. Radelet and D. Lindauer (6th Edition, Norton, 2006)
Development Economics by Debraj Ray (1998: Princeton).
The Economics of Microfinance by B.A. de Aghion and J. Morduch (MIT Press, 2005)

In addition I will draw some case studies and further readings from the following books:
The Elusive Quest for Growth by William Easterley (MIT Press, 2001)
The Economics of Rural Organization by K. Hoff, A. Braverman and J. Stiglitz (OUP, 1993)
Case Studies in Economic Development by Stephen C. Smith (Addison Wesley Longman, 2003).  



1. The Big Picture
          Core readings:   Lloyd-Ellis, ch. 1                               
          Further reading: Todaro and Smith pp. 39-71
Case Study:       "Africa Falls Behind: Debate over the Causes", Smith ch. 21
 
                    
Core reading:    Lloyd-Ellis, ch. 2
Further reading: Hoff et al. pp. 8-15


2. Aggregate Economic Growth: Theories and Evidence
          Core reading:     Lloyd-Ellis, ch. 3.1
          Further reading: "Aid for Investment", Easterly pp.25-44
         
          Core reading:     Lloyd-Ellis, ch. 3.2
          Further reading:  Weil pp. 48-68, 166-167, 173-180
                                    "Solow's Surprise: Investment is not the Key to Growth," Easterly pp. 47-69

          Core reading:    Weil pp. 439-468
                                   
"Colonial Origins of Economic Development", Economic Intuition, 2000, pp. 22-3.
          Further reading: "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income"

3. Agriculture and Rural Land Markets

Core reading:     Todaro and Smith pp. 431-467

          Core reading:     Ray pp. 349-352,    Ray pp. 415-445

Core reading:     Ray pp. 445-463
                          "The Evolution of the World Bank's Land Policy: Principles, Experience and Future
                          Challenges," by K. Deininger and H. Binswanger
Case Studies:     "The Economics of Land Titling in Thailand," by G. Feder
                          "Indigenous Land Rights Systems in Sub-Saharan Africa," by Migot-Adholla et al.


4. Credit Markets 
Core reading:      "Imperfect Information in Rural Credit Markets: Puzzles and Policy Perspectives"

Core readings:    Aghion and Morduch pp. 25-46
                          Ray pp. 561-572
Case Study:        "The Cost of Information and the Credit Market: Chambar Pakistan", Ray, pp. 559-561

Core readings:    Aghion and Morduch, pp. 47-52,  85-114
                           Ray pp. 572-584
Case Study:        "Hope for the Poor: The Grameen Bank of Bangladesh", Smith, ch. 4

 

5. Human Resources
Core reading:       Ray pp. 272-279,    Ray pp. 483-524

Core readings:     Todaro and Smith, pp. 320-327, 335-341
                             Ray pp. 372-387
Case Study:         "Rural Migration and Urbanization in India and Botswana", Smith, ch. 8.

          Core reading:      Todaro and Smith, pp.  273-286, 291-295
                                      Weil pp. 83-115
          Further reading:   Perkins et al. pp. 265-274
 

6. International Linkages and Economic Development

          Core reading:      Perkins et al. pp. 519-562

          Core reading:      Ray pp. 621-656

Core reading:      Perkins et al. pp. 709-756
Case Study:        "Industrial and Export Policy in South Korea"  Smith, ch. 15

          Core reading:      Perkins et al. pp. 563-604
          Further reading:  "Forgive us Our Debts," Easterly, pp. 123-137