Course Syllabus

Development Economics

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Semester & Location:

Spring 2020 - DIS Copenhagen

Type & Credits:

Elective Course - 3 credits

Major Disciplines:

Economics, International Relations

Faculty Member:

Michael Hedegaard

Program Director:

Susanne Goul Hovmand - sgh@dis.dk

Program Coordinator: 

Alex Berlin - ab@dis.dk

Program Assistant:

 Marissa Buffo- mbu@dis.dk

Time & Place:

Mondays & Thursdays 11.40 - 13.00, F24-503



 

Development Economics is about acquiring an understanding of the factors behind the development of developing and emerging economies. 

The course consists of seven modules that explore the nature and causes of development and underdevelopment, the effects of development assistance in recipient countries, and the vexing phenomenon of "growth without development," all in terms of

(1) macroeconomic models of development;

(2) the basic contemporary policy debate ("Planners" vs. "Searchers");

(3) private sector activity and FDI's 

(4) obstacles and opportunities attributable to the international development assistance architecture;

(5) sustainability and human development goals and how they tie in to economic goals

(6) project research of specific development project

(7) final country simulation assignment.

Key course themes

Within the wider disciplines of economics and political economy, development economics is one of the more recent branches, as well as one of the most exciting and challenging. Development economics studies one of the key challenges of our time, namely, economic growth and development in low-income countries, and the transformation of these economies into modern, high-income countries. In this course, development and underdevelopment will be looked at through the lens of key economic concepts, policy prescriptions, development assistance architecture, and applied project management tools. 

Today, emerging and developing countries make up about 60 % of world GDP at Purchasing Power Parity. This group make up 155 countries and includes such different countries as Bolivia, Somalia, Kenya, China, India and Ukraine. The main criteria used by World Economic Outlook for this classification are income per person, export diversity and degree of integration into the global financial system. Emerging and developing countries have seen significant economic growth during the last decades, but still, the World Bank estimated that, as of 2015, 3.4 billion people - or 46% of the world's population - lived on less than $5.50 a day.

The course provides the students with the basic knowledge and theories of economic growth and development. It also examines the way key social institutions and economic policies of developing and emerging economies have affected their economic performance. The knowledge acquired is important in evaluating investment projects in emerging and developing countries and provide useful skills for local economic consulting firms and local or international organizations.

Developing countries are not alike – substantial differences exist both with respect to per-capita income levels, efficiency and growth in income. Some of these countries, primarily in East Asia and Central and Eastern Europe, have grown at rates above those of the industrialized countries. These high-growth emerging countries have typically liberalized their international trade and investments and built good institutions of law and order. Other countries, e.g. in sub-Saharan Africa, have not succeeded in economic growth and many have even for periods experienced a fall in per capita income. For this reason, they have been important beneficiaries of aid from the rich countries – directly or through international organizations such as the World Bank. For international economic consultants working with projects directed to the third world it is important to understand the main barriers for economic development to be able to find solutions to overcome these barriers. Important questions are:

  • What are the main reasons for differences in economic development?
  • fWhich of the developing countries will be most prosperous in the future, and why?
  • How will the globalization process affect wealth and income distribution in poor countries?
  • Which policies are needed for a successful transition of the poor countries?

While development economics is concerned with sustained economic growth over time, its interests are not restricted to economic growth. Rather, development economics is predicated on an understanding that growth without development is possible, even if the two are closely linked. Accordingly, the study of economic development also treats the economic, political, social and institutional structures and processes necessary for rapid and large-scale improvements in levels of living for the populations of developing countries. The scope of this course is therefore inherently cross-disciplinary. It draws not only on economics, but also on approaches ranging from political science to philosophy, cultural history, and private sector development.  

We will specifically look at Human Development in developing countries and its relationship to economic growth. We know that countries can improve the standard of living and the quality of people’s lives even under adverse circumstances, and that countries have made great gains to meet the Millennium Development Goals (MDGs) despite only modest growth in income. At the same time, some countries with strong economic performance over the decades have failed to make similarly impressive progress in life expectancy, poverty alleviation, schooling, and overall living standards.

The role of international development assistance in promoting economic development, and how to measure that contribution, are key issues in the current international debate. International development assistance is seen by some as inefficient and a waste of taxpayers’ money, while others go so far as to argue that aid can have negative impacts, and can act as a brake on economic development.

The key themes that cut across this course are:

  • Theories of economic development: what are the causes of economic growth as well as the barriers to development? How do we best explain sustained economic development, and what are the limitations of these theories? Issues of inequality, poverty and underdevelopment: Why have some countries come to be known as “growth disasters”?
  • The changing landscape of international development assistance, with particular emphasis on the differences between various agencies, e.g., differences between US and Danish development assistance: What are the ideological underpinnings of different approaches to development and how has development assistance changed during the last 50 years?
  • The role of the private sector in development economics
  • Modalities of development assistance: supporting economic development through programs, budget assistance and projects. Logical Framework Approach and capacity building tools.

The way this course addresses these themes is grounded in real life, practical, and case-based, while relying on a solid theoretical framework. 

Learning objectives

  • Understand the complexity of economic growth and development and the debates surrounding the ways and means to support it.
  • Gain knowledge of various paradigms of economic development, and their application in a geographic and historic perspective.
  • Knowledge of the main international institutions to assist the developing countries and the ability to use and apply institutional knowledge in an economic context
  • Gain factual knowledge of the “international development assistance architecture,” including the main institutional actors, the policy framework, and operational challenges.
  • Be able to critically address current debates surrounding development assistance, as well as their underlying theoretical and ideological underpinnings.
  • Skills enabling students to evaluate and potentially formulate policies to alleviate specific problems in developing and emerging economies, and to understand the effect of policy spill-overs from other countries
  • Skills necessary to analyze and forecast market development an thus evaluate market and direct investment opportunities

Grading Breakdown

 Assignment / Course requirement

Deadline

Percentage of final grade

Engagement and Participation

Ongoing

30 %

Midterm (short answer test)

Session 13

20 %

Research Paper project analysis

Session 19

20 %

Development project simulation (in groups)

Session 23-25

30 %

 

 Notes:

The midterm is short fact-based test focusing on the material covered in modules 1 & 2.

Research paper project analysis (individual): This is a 5-page paper analyzing a specific development project/programme.  The student should be able to (i) relate the specific project/programme examined to the needs and challenges faced by the country; and (ii) reflect on the donors/promoters, the applied channels and modalities, and the underlying theoretical paradigms involved.

Development project simulation (groups): The students will play the role of development consultants hired for an assignment by the government of a developing country. The overall heading of the assignment is: “How to make best use of $50,000,000: Proposal for a development project that maximizes impact, and is aligned with the country's own policies"  On the basis of the material covered during this course (both theoretical and factual), as well as on solid independent research, each group will develop a proposal and present their strategic findings in class.

Academic Regulations  

Please make sure to read the Academic Regulations on the DIS website. There you will find regulations on:

DIS - Study Abroad in Scandinavia - www.DISabroad.org

Special note about laptop use in class: Use of laptop computers in class is allowed for the purpose of note-taking ONLY; other computer activities can prove distracting.  Students May lose their laptop privileges if they use their computers for other activities besides taking notes.  Students should also refrain from any activity/behavior that May be disturbing to other students who are making the effort to be attentive.

Readings

Please pick up the compendium from Book Pickup during arrivals week.

  • Babatunde, M. A. and Busari, D.T. “Global economic slowdown and the African continent: rethinking export-led growth,” International Journal of African Studies, 2009.
  • Danish Ministry for Foreign Affairs 2008: Denmark – Bhutan Development Strategy 2008 - 2013
  • Easterly, William: “A modest proposal,” Book review of Jeffrey Sachs’ The end of poverty, Washington Post, March 13, 2005
  • Easterly, William: “Planners vs. Seekers in foreign aid,” lecture to the Asian Development Bank, 2006
  • Heidhues, F.: “Why is development in Sub-Saharan Africa So Difficult? Challenges and Lessons Learned,” 2009, in Review of Business and Economics.
  • Helliwell, John, Richard Layard, and Jeffrey Sachs (Columbia University, 2013): World Happiness Report, Chapter 2 (“The State of World Happiness”), Part II: “Bhutan Gross National Happiness and the GNH Index”
  • Moyo, D. Dead Aid: Why Aid Is Not Working and How There Is A Better Way for Africa. New York: Farrar, Straus and Giroux, 2009.  Chapters 1-3.
  • Phillips, D. A. Development Without Aid: The Decline of Development Aid and the Rise of the Diaspora (Anthem Press, 2013), Chapter 2.
  • Sachs, Jeffrey: “The end of poverty: economic possibilities in our time,” Carnegie Council lecture, 2005
  • Sen, Amartya: “The man without a plan,” Book review of William Easterly, The White Man’s Burden, Washington Post, April 2006
  • Todaro, Michael P. & Smith, Stephen C.:Economic Development, 11th ed. (Addison-Wesley, 2011), Chapters 1-3.
  • Whitfield, Lindsay: “Reframing the aid debate: Why aid isn’t working and how it should be changed,” DIIS Working paper no. 2009:34
  • Williams, D.: International Development and Global Politics: History, Theory, and Practice (Routledge, 2012), Chapters 2-3.

 

Course Summary:

Date Details Due