7.1 Required reading
In this session we give a broad overview of the development state of the world today. We go back in time to show how countries and regions have developed historically.
Gerard Roland. 2013. Development Economics, chapters 1 and 2
Debraj Ray. Development Economics, Chapter 2
Martin Ravallion. 2016. The Economics of Poverty: History, Measurement, and Policy. Oxford University Press.
Because poor countries are clearly geographically clustered, an obvious first place to look for an explanation of income differences would be geographical differences across countries, such as climate, fauna and flora, soil, endemic diseases and the like. This lecture will discuss how much traction these geographical explanations have in understanding why some countries prosper and others not.
Jeffrey Sachs, Andrew Mellinger and John Gallup (2001). The Geography of Poverty and Wealth. Scientific American March 2001.
Jared Diamond (1997). Guns, Germs, and Steel. New York: W.W. Norton & Co. Chapters 1-10.
Vernon Henderson, Zmarak Shalizi and Anthony Venables (2001) Geography and Development, Journal of Economic Geography, 1(1): 81-105.
Nunn, Nathan and Diego Puga (2012) Ruggedness: The Blessing of Bad Geography in Africa, Review of Economics and Statistics 94(1): 20-36.
History and Institutions
Broadly defined institutions are the ‘rules of the game’. They cover rules ranging from property rights, gender principles over redistributive norms and even politeness norms. Geography and history have come together dynamically to create institutions that differ widely across countries. Most of today’s poorest countries have relatively recent histories of colonialism and, in the longer past, a legacy of slave trade. This part of the lecture series discusses research investigating how history has cast a long shadow over current-day economic performance, through its effect on institutions.
Daron Acemoglu, Simon Johnson and James Robinson (2004). Institutions as a fundamental cause of long-run growth. Chapter 6 in Pilippe Aghion and Steven Durlauf (eds) “Handbook of Economic Growth Vl1A. Pages 385-472.
Daron Acemoglu, Simon Johnson, and James Robinson (2001), ‘The colonial origins of comparative development: An empirical investigation’, American Economic Review, 91(5):1369–1401.
Daron Acemoglu and James Robinson (2012). Why Nations Fail: The Origins of Power, Prosperity and Poverty.
Daron Acemoglu, Simon Johnson, and Robinson, James (2002) “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.” Quarterly Journal of Economics 118: 1231-1294.
Sokoloff, Kenneth L., and Stanley L. Engerman (2000) "Institutions, Factor Endowments, and Paths of Development in the New World." Journal of Economic Perspectives, 14(3): 217-232.
The economics of institutions
In this final chapter we will dig deeper into the economics of institutions to unpack exactly how they impact economic development.
Gerard Roland. 2013. Development Economics, chapters 7-11
Elinor Ostrom. Understanding Institutional Diversity, Princeton University Press
Engerman, Stanley L, and Kenneth L Sokoloff. 2005. “Institutional and Non-Institutional Explanations of Economic Differences.” In Handbook of New Institutional Economics, edited by C Menard and M.M. Shirley, 639–65. Amsterdam: Springer.
5. Presentations and Debates
As part of the course you will read a number of seminal academic articles on the topic of economic and institutional development, participate in class discussions related to those articles, make a short video presentation, and give a live presentation. The presentations are group work.
General required reading for this part of the course is
Banerjee and Duflo. 2012. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.PublicAffairs (chapter 10).
We will select a number of papers to read from the following list or similar articles in the literature. In academic year 2015-16 we read 6 papers, but that number could be revised depending on student numbers.
Abhijit B. and L. Iyer (2005), “History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India”, American Economic Review, 95(4): 1190-1213.
Acemoglu, D., S. Johnson and J. Robinson (2001), “The colonial origins of comparative development: An empirical investigation”, American Economic Review, 91(5):1369-1401.
Nunn, N. and L. Wantchekon (2011), “The Slave Trade and the Origins of Mistrust in Africa”, American Economic Review, 101(7): 3221-3252
Wantchekon, L. (2003), “Clientelism and Voting Behavior Evidence from a Field Experiment in Benin”, World Politics, 55: 399-422.
Wantchekon, L. (2013) “Can Informed Public Deliberation Overcome Clientelism?” American Economic Journal: Applied Economics , vol. 5(4), pages 241-55, October.
Collier,P. and Vicente, P.C. (2014) "Votes and Violence: Evidence from a Field Experiment in Nigeria," The Economic Journal, Volume 124, Issue 574, pages F327–F355.
Martinez-Bravo, M. , Padró i Miquel, G., Qian, N. and Yao, Y. (2011) "Do Local Elections in Non-Democracies Increase Accountability? Evidence from Rural China" NBER Working Papers 16948, National Bureau of Economic Research, Inc.
Olken, B. A (2007) “Monitoring Corruption: Evidence from a Field Experiment in Indonesia.” Journal of Political Economy, 115( 2):200-249. .
Ferraz, C. and Finan, F. (2008) “Exposing corrupt politicians: the effects of Brazil’s publicly released audits on electoral outcomes”. The Quarterly Journal of Economics, 123(2):703-422
Olken, B. A. (2010) "Direct Democracy and Local Public Goods: Evidence from a Field Experiment in Indonesia," American Political Science Review , 104(2): 243-267
Nathan Nunn. “The long-term effects of Africa's slave trades”. Quarterly Journal of Economics, 123(1): 139-176, 2008.
Olken, Benjamin A., and Rohini Pande. 2012. “Corruption in Developing Countries.” Annual Review of Economics 4 (1): 479–509.
Miguel, E., S. Satyanath and E. Sergenti (2004) Economic Shocks and Civil Conflict: An Instrumental Variables Approach. Journal of Political Economy 112: 725-753.
O. Dube and J. Vargas (2013) Commodity price Shocks and Civil Conflict : Evidence from Colombia. Review of Economic Studies. 80 (4): 1384-1421
Besley and Person (2011) The Logic of Political Violence. Quarterly Journal of Economics 126(3), pp. 1411-1445.
7.2 Optional reading
The following study material can be studied voluntarily :