Syllabus Winter 2019: PPHA 57300 Economic Development and Policy Monday 2pm-4.50pm

Version updated: Dec 31st 2018 (Readings on syllabus (click here to be brought to that section) will be updated during the quarter. Latest version can be found on canvas here)

Instructor: Amir Jina email: [email protected] office: 2067 Teaching assistant: Jenna Allard

Course Materials: (1) Course slides posted weekly on Canvas (2) Required text:

- “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” by Abhijit Banerjee and Esther Duflo

This is the only book you are required to buy, and is available in the campus bookstore (or any bookstore).

(3) Readings for each week on this syllabus

Course Objective:

The history, current pattern, and causes of the distribution of the wealth of nations remains one of the most fascinating and fundamental of all questions in economics and policy. This course will attempt to give an overview of economic growth and development, focusing on real-world data, by looking at the empirical and theoretical research that has been used to understand them and subsequently form the basis of development policies.

The course is divided into three major sections: measuring and modeling growth and development, human capital, and markets. Throughout the quarter, we’ll explore sets of “development facts” – the way that the world currently appears to us as policy-makers – by looking at contemporary data. For each topic, we will attempt to incorporate and discuss contemporary debates in development thinking.

Class Preparation:

Class preparation will primarily involve reading the required materials for each class before class on Monday. As we have only one class per week, there will often be many readings and I’d encourage you to pace yourself throughout the week to get through these. Each week will require approximately 100 pages of reading. Readings marked with ‘**’ are required readings. Please come to class having read all required readings and as many of the other readings as you can. Any of these may be the subject of classroom discussions, and each of you is expected to join in classroom discussions and debates.

In addition, each week you will be required to submit a “data visualization” that you find during your exploration of contemporary facts about development. More details will be given on this requirement during class.

Software:

This course will require you to follow lectures and complete assignments using any statistical software, with a particular emphasis on STATA or R. Stata is available on the computers in the Harris School Computer Lab and on the student servers. Students wishing to purchase Stata may do so through the University at a substantial discount. Stata SE is $235 for a one-year license; $395 for a perpetual license. R was, is, and always will be free.

Course Grading and Evaluation

Here is a breakdown of the grading for the course 50% Homework assignments 15% Mid-term country profile 25% Final policy brief 10% Participation and visualization submission

There will be 5 homework assignments, weekly visualization submissions, and two longer assignments taking the form of policy briefs. Details on due dates and requirements will be provided shortly.

Re-Grades

Any item for which there is a re-grade request must be done within 7 days after we return the assignment or exam to you. The request for re-grade MUST be done in writing and attached to the assignment. In such cases, we will re-grade the whole assignment– not just the question you identified. As a result, your grade may be lower.

Communication

Communication from instructors to students will happen through posting of materials on Canvas and a weekly class email sent through Canvas. Emailing me directly is likely to be the least efficient way to communicate about the class, with office hours generally preferable.

Questions regarding scheduling, class materials, or assignments should be directed to Jenna Allard, who will be your TA for the quarter.

Recitations / TA session:

Each week, Jenna will dedicate formal instruction time through the weekly recitation. You must attend the recitation session. Sessions will cover material from class in more depth, and allow time for discussion and debate of materials and readings. In the event of holidays or university closures, a TA session may be used as a main class.

Office Hours:

Each week, there will be instructor and TA office hours for additional instruction.

Amir: TBA Jenna: TBA

Stata and R Support Bar:

The Harris School has dedicated additional resources for teaching programming in R and Stata through the Stata and R support bars.

Tutoring

If you would like to employ a tutor for additional instruction, please contact your academic advisor or the Assistant Director for Student Affairs, Jen Lombardo ([email protected]).

Detailed syllabus and readings NOTE: Required readings are indicated with a ‘**’ before their entry. Other readings are optional, and will either be referred to in class or provide extra background / detail on a topic.

Part I: Measuring and modeling economic development (weeks 1-4)

1) Where we are and how we got here: a picture of development around the world (plus class introduction) Topics: Development around the world; Development Facts; GDP PPP, etc; Convergence and Divergence; Industrial revolution and the great divergence; History of development; Development policy thought through time; Solow-Swan model;

a. **Maddison, Angus. The world economy volume 1: A millennial perspective volume 2: Historical statistics. Academic Foundation, 2007. Introduction & Chapter 1 b. **Pritchett, Lant. "Divergence, Big Time." The Journal of Economic Perspectives 11, no. 3 (1997): 3-17. i. Blog: https://marginalrevolution.com/marginalrevolution/2018/10/convergence -big-time.html c. Henderson, J. Vernon, Adam Storeygard, and David N. Weil. "Measuring economic growth from outer space." American economic review 102, no. 2 (2012): 994-1028.

2) Economic development, factor allocation, and structural change Topics: Alternatives to GDP: HDI, SDGs, etc; Endogenous growth; AK Model; Growth accounting; Factor allocation; TFP; Structural change; Lewis two-sector model; Comparative advantage; Trade; Internal and international migration;

a. **Romer, Paul, “Economic Growth” in The Concise Encyclopedia of Economics. Available at: https://www.econlib.org/library/Enc/EconomicGrowth.html b. **Jones, Charles I., and Paul M. Romer. "The new Kaldor facts: ideas, institutions, population, and human capital." American Economic Journal: Macroeconomics 2, no. 1 (2010): 224-45. c. **Rodrik, Dani. "Growth strategies." Handbook of economic growth 1 (2005): 967-1014. Sections 1-4 e. **Stiglitz, Joseph, “The Post-Washington Consensus Consensus”, in Serra, Narcís, and Joseph E. Stiglitz. 2008. The Washington Consensus reconsidered: towards a new global governance. Oxford: Oxford University Press. f. Jones, Charles I. "The facts of economic growth." In Handbook of macroeconomics, vol. 2, pp. 3-69. Elsevier, 2016. g. Murphy, Kevin M., Andrei Shleifer, and Robert W. Vishny. "Industrialization and the big push." Journal of political economy 97, no. 5 (1989): 1003-1026. h. Casson, Mark, and John S. Lee. "The origin and development of markets: A business history perspective." Business History Review 85, no. 1 (2011): 9-37.

3) Measuring and modeling poverty Topics: LDCs; Industrial policy; Poverty lines and headcounts; Inequality and distribution of wealth; Gini index; Poverty trap / multiple equilibria models; Psychology of poverty; Ethics, equity, sustainability; International aid;

a) **Banerjee and Duflo, Chapter 1 b) **Banerjee, Abhijit V., and Esther Duflo. "The economic lives of the poor." Journal of economic perspectives 21, no. 1 (2007): 141-168. c) **Robinson, James A. "Industrial Policy and Development: A Political Economy Perspective." (2009). d) **Kraay, Aart, and David McKenzie. "Do poverty traps exist? Assessing the evidence." Journal of Economic Perspectives 28, no. 3 (2014): 127-48. e) **Banerjee, Abhijit, Esther Duflo, Nathanael Goldberg, Dean Karlan, Robert Osei, William Parienté, Jeremy Shapiro, Bram Thuysbaert, and Christopher Udry. "A multifaceted program causes lasting progress for the very poor: Evidence from six countries." Science 348, no. 6236 (2015): 1260799. f) **Pritchett, Lant. "Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth." (2018). g) Ray, Debraj “Development Economics” in Palgrave Dictionary of Economics: http://www.econ.nyu.edu/user/debraj/Papers/RayPalgrave.pdf h) Rodrik, Dani. "Industrial policy for the twenty-first century." (2004). https://drodrik.scholar.harvard.edu/publications/industrial-policy-twenty-first- century i) Deaton, Angus. "Measuring poverty in a growing world (or measuring growth in a poor world)." Review of Economics and statistics 87, no. 1 (2005): 1-19. j) Marx, Benjamin, Thomas Stoker, and Tavneet Suri. "The economics of slums in the developing world." Journal of Economic Perspectives 27, no. 4 (2013): 187- 210. k) Banerjee, Abhijit V., and Esther Duflo. "Growth theory through the lens of development economics." Handbook of economic growth 1 (2005): 473-552.

Part II: Human Capital (weeks 5-7) 4) Demographics and nutrition Topics: Demographic transition; Fertility; Family planning; Population momentum; Engel’s law; Nutrition interventions; Macro- and micro-nutrients; Nutrition traps; Household economies

a) **Banerjee and Duflo, Chapter 2 b) **Subramanian, Shankar, and Angus Deaton. "The demand for food and calories." Journal of political economy 104, no. 1 (1996): 133-162. c) **Black, Robert E., Cesar G. Victora, Susan P. Walker, Zulfiqar A. Bhutta, Parul Christian, Mercedes De Onis, Majid Ezzati et al. "Maternal and child undernutrition and overweight in low-income and middle-income countries." The lancet 382, no. 9890 (2013): 427-451. d) **Galor, Oded, and David N. Weil. "Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond." American economic review 90, no. 4 (2000): 806-828. e) Jayachandran, Seema. "The Roots of Gender Inequality in Developing Countries." Annu. Rev. Econ 7 (2015): 63-88. f) Kremer, Michael. "Population growth and technological change: One million BC to 1990." The Quarterly Journal of Economics 108, no. 3 (1993): 681-716. g) Bhutta, Zulfiqar A., Jai K. Das, Arjumand Rizvi, Michelle F. Gaffey, Neff Walker, Susan Horton, Patrick Webb et al. "Evidence-based interventions for improvement of maternal and child nutrition: what can be done and at what cost?." The lancet 382, no. 9890 (2013): 452-477.

5) Health Topics: RCT methodology; Program evaluation; Public health; Health externalities; Vaccination; SIR models; Disease and development; HIV/Aids;

a) **Banerjee and Duflo, Chapter 3 b) **Miguel, Edward, and Michael Kremer. "Worms: identifying impacts on education and health in the presence of treatment externalities." Econometrica 72, no. 1 (2004): 159-217. c) **Dupas, Pascaline. "Short‐run subsidies and long‐run adoption of new health products: Evidence from a field experiment." Econometrica 82, no. 1 (2014): 197-228. d) Dupas, Pascaline, and Edward Miguel. "Impacts and determinants of health levels in low-income countries." In Handbook of economic field experiments, vol. 2, pp. 3-93. North-Holland, 2017.

6) Education Topics: Merit goods; Education; Learning crisis; Universal enrollment; Human capital accumulation; Returns to education and schooling

a) **Banerjee and Duflo, Chapter 4 b) ** World Bank. "World Development Report 2018: Learning to Realize Education’s Promise." (2018). Chapters 1-3. c) **Baird, Sarah, Craig McIntosh, and Berk Özler. "Cash or condition? Evidence from a cash transfer experiment." The Quarterly journal of economics 126, no. 4 (2011): 1709-1753. d) Duflo, Esther. "Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment." American economic review 91, no. 4 (2001): 795-813. e) Jayachandran, Seema. "The Roots of Gender Inequality in Developing Countries." Annu. Rev. Econ 7 (2015): 63-88.

Part III: Markets and Market Failures (week 8-10) 7) Agricultural land and labour markets Topics: Expected utility and risk aversion; Market failures; Adverse Selection; Moral Hazard; Public goods a) **Banerjee and Duflo, Chapter 6 and 7 b) ** Stiglitz, Joseph E. "Markets, market failures, and development." The American Economic Review 79, no. 2 (1989): 197-203. c) **Gollin, Douglas, David Lagakos, and Michael E. Waugh. "Agricultural productivity differences across countries." American Economic Review 104, no. 5 (2014): 165-70. d) **Hicks, Joan Hamory, Marieke Kleemans, Nicholas Y. Li, and Edward Miguel. Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata. No. w23253. National Bureau of Economic Research, 2017. e) Bryan, Gharad, Shyamal Chowdhury, and Ahmed Mushfiq Mobarak. "Underinvestment in a profitable technology: The case of seasonal migration in Bangladesh." Econometrica 82, no. 5 (2014): 1671-1748. f) Alesina, Alberto, Paola Giuliano, and Nathan Nunn. "On the origins of gender roles: Women and the plough." The Quarterly Journal of Economics 128, no. 2 (2013): 469-530.

8) Credit and savings, risk and insurance Topics: Adverse selection; Moral Hazard; Consumption smoothing; Cash transfers; Universal basic income; Social safety nets; Microfinance a) **Banerjee and Duflo, Chapter 7 b) **Blog about GiveDirectly UBI experiment: https://www.vox.com/policy-and- politics/2017/3/6/14007230/kenya-basic-income-givedirectly-experiment-village c) **Kochar, Anjini. "Smoothing consumption by smoothing income: hours-of- work responses to idiosyncratic agricultural shocks in rural India." Review of Economics and Statistics 81, no. 1 (1999): 50-61. d) **Burgess, Robin, and Rohini Pande. "Do rural banks matter? Evidence from the Indian social banking experiment." American Economic Review 95, no. 3 (2005): 780-795. e) **Jayachandran, Seema. "Selling labor low: Wage responses to productivity shocks in developing countries." Journal of political Economy 114, no. 3 (2006): 538-575. f) **Banerjee, Abhijit, Dean Karlan, and Jonathan Zinman. "Six randomized evaluations of microcredit: Introduction and further steps." American Economic Journal: Applied Economics 7, no. 1 (2015): 1-21. g) Paxson, Christina H. "Using weather variability to estimate the response of savings to transitory income in Thailand." The American Economic Review (1992): 15-33. h) Blattman, Christopher, Nathan Fiala, and Sebastian Martinez. The Long Term Impacts of Grants on Poverty: 9-year Evidence From Uganda's Youth Opportunities Program. No. w24999. National Bureau of Economic Research, 2018.

9) Natural resources, energy, and the environment Topics: Public goods again; Energy and development; Environment and economic growth; Externalities; Congetion; Tragedy of the commons a) **Hsiang, Solomon M., and Amir S. Jina. The causal effect of environmental catastrophe on long-run economic growth: Evidence from 6,700 cyclones. No. w20352. National Bureau of Economic Research, 2014. b) **Maccini, Sharon, and Dean Yang. "Under the weather: Health, schooling, and economic consequences of early-life rainfall." American Economic Review 99, no. 3 (2009): 1006-26. c) **Duflo, Esther, Michael Greenstone, Rohini Pande, and Nicholas Ryan. "Truth- telling by third-party auditors and the response of polluting firms: Experimental evidence from India." The Quarterly Journal of Economics 128, no. 4 (2013): 1499-1545. d) **Dietz, Thomas, Elinor Ostrom, and Paul C. Stern. "The struggle to govern the commons." science 302, no. 5652 (2003): 1907-1912.

Ethical Academic Conduct

The University’s Academic Policies and Procedures and guidance regarding Civil Conduct apply to all activity in our course. If you need to review the University’s policies, please see: https://studentmanual.uchicago.edu/Policies#Honesty https://studentmanual.uchicago.edu/university

By taking this course, you explicitly pledge your honor that you will not cheat (or help others to cheat) in any way on the assignments/exams.

We adhere to the official Harris School protocol for ethical violations:

“First Violation

If a student is accused by an instructor or teaching assistant of plagiarism, cheating, or any other form of academic dishonesty, the student will be summoned to meet with the Dean of Students and the instructor. In the meeting, the student and instructor both present information about the situation. If it is determined by the instructor and the Dean of Students that the student has, in fact, plagiarized or cheated, the following sanctions will be imposed for the first violation:

The student will generally receive a grade of 0 on the assignment or exam in question (subject to the discretion of the instructor) The student may be asked to re-do the assignment or retake the exam (without credit) to ensure that the student has learned how to properly cite sources or demonstrate that he or she has command of material covered. A formal letter of finding is sent to the student stating that the student has been found in violation of the code of academic honesty and what the sanctions were. The letter, along with any evidence presented, is archived in Harris Student Affairs records until the student graduates if the student has no other violations.

Second Violation

If a student who has already been found in violation academic dishonesty is again accused of academic dishonesty, the case will be sent to the Harris Area Disciplinary Committee. Details about the Area Disciplinary Committee procedures can be found in the University Student Manual (https://studentmanual.uchicago.edu/area).

Information about the first violation, including the formal letter of finding any evidence, will be presented to the Area Disciplinary Committee, along with evidence of the current allegation. If the student is found in violation of academic honesty a second time, the Area Disciplinary Committee can assign sanctions including suspension or expulsion from the University.

Just to summarize what the linked content says: In the case where we need to convene an Area Disciplinary Committee to hear a case, Dean Baicker would select 3 faculty and at least one student of her choosing to sit on the committee. The faculty selected must be full-time faculty, not lecturers. A representative from central University campus and student life would also be on the committee. The Harris Dean of Students will also sit on the committee, but as a non-voting representative. The committee would hear the case and decide what sanctions, if any, to apply to the student. These sanctions can include suspension or expulsion.

Academic Dishonesty Appeals

If a student has been found in violation of academic honesty and does not believe that either the finding or the sanction is fair or correct, the student has the right to appeal the finding by requesting a hearing from the Area Disciplinary Committee. More information about the Area Disciplinary Committee is available here.”

To clarify ethical academic conduct within the boundaries of your homework assignments:

Homework assignments are team assignments. You are allowed to work on the homeworks within your assigned group. Copying the homework of another group/ passing code from group to group is cheating. Providing another group with your group’s assignment to copy is cheating.

Copyrights and Course Content (Use of Course Hero and similar websites):

This course is a work of original authorship. All course materials (including, but not limited to, class lectures and discussions, handouts, examinations, study guides and web materials) and the intellectual content of the course itself are protected by United States Federal Copyright Law. Students are permitted to make notes solely for their own private educational use. Students and all other persons are expressly forbidden from recording lectures or discussions and from distributing or selling lectures notes and all other course materials without the prior written permission of the instructors. Because the instructors own the copyright to the classroom presentations and all course materials, any notes taken during those presentations and subsequently sold or distributed to others would constitute an unauthorized derivative work and expose the person or persons involved to individual copyright infringement actions by the instructors.

Harris Integrity Policy for Problem Sets Involving Code 1) Academic dishonesty will not be tolerated. If you commit plagiarism, you may receive an F and be referred to the Area Disciplinary Committee. 2) All work must be your own. Do not a) show other students your code b) ask for another student's code c) use online solutions to textbook questions d) copy large portions of code from online repositories (e.g. replication code) 3) Every submission begins with “This submission is my work alone and complies with the 57300 integrity policy. Add your initials to indicate your agreement: **__**” 4) So how can I collaborate? a) In-person collaboration i) clarify ambiguities in problem set questions ii) discuss conceptual aspects of problem sets (e.g. at the whiteboard) iii) show output on screen (e.g. a graph or table) iv) Show helpful documentation files b) Electronic collaboration i) Piazza message board (1) ask questions (2) share error messages (but not code) ii) Code from an online forum or resource (other than documentation files) (1) cite all code you use, even a one-line snippet 5) How do these rules change for problem sets working in groups? a) You and your group members will submit a single problem set. b) If you work collaboratively with other students, but turn in your own problem set i) You can talk to your group members as needed and look at other members work to facilitate that discussion. ii) Your problem set should be solely your authorship (written up by yourself, in your own language, including your own code.) iii) Your code should have a comment at the top listing the members of your group. iv) Any part of your code that was substantially altered because of your group discussion should cite others' contributions with names and descriptions in a comment at the place where it is applicable. 6) Unsure about some aspect of this policy? Please ask your instructor!