ECONOMICS 280 Development Economics

Fall 2003 - TTh 1-3 and 3-5pm
Instructor: Jim Casey
Contact Info: Rm. 104, Ext. 8102, Email: Caseyj
Office Hours: MW 1:30-4:30, and by appointment
Prerequisite: Economics 101, 102

Thich Nhat Hanh, Peace Is Every Step

Quick Overview:

This class serves as an introduction to the study of Development Economics. The course will be divided into four sections and will be framed around a set of questions.

The first section provides an overview of Development Economics and asks the following kinds of questions: What is development economics? What is the difference between "growth" and "development"? What is the current state of affairs in the world of development? What does it mean to be poor? How do we measure poverty? What is the HDI and what can it tell us?

The second section introduces specific theories of growth and development. This is the "history of thought" section and leads to current ideas related to “endogenous growth,” "unfreedom" and “ecological and institutional economics.” In this section of the course we will pose the following types of questions: What are the main constraints to growth? Is it good enough to simply grow? Why do some countries grow faster than other countries? Does growth entail development? What does it mean to be free? How does growth affect the environment?

Section three deals, primarily, with the factors of production: physical, human and natural capital. We will spend a significant amount of time discussing the role of human capital and how it is inseparable from discussions of physical and natural capital. Here we might ask questions like the following: What is the relationship between income and health or income and education? Why do some countries invest heavily in human capital while others do not? How important are natural resources as inputs to production? What is the role of agriculture in the process of development?

The last part of the course, section four, is reserved for “global issues.” Here we will ask: What is the role of the IMF and World Bank? What is trade liberalization? Why were there protests in Seattle, Genoa, and Washington D.C.? Is free trade good for growth? Is it good for the poor?

Readings:

(1) (H&R) Hess, Peter and Clark Ross. 1997. Economic Development: Theories, Evidence, and Policies. The Dryden Press.

(2) Sen, Amartya. 1999. Development as Freedom. Random House.

(3) Stiglitz, Joseph E. 2002. Globalization and Its Discontents. Norton Press.

(4) Selected Online Reading Assignments

Requirements:

The first thing you will need to do is pick a developing country of your choice. (GNI) You will be required to write three "linked" 4-5 page papers. What does "linked" mean? You are actually only writing one 12-15 page paper, but we will break the paper into three sections and each will be turned in and graded separately. The first paper provides an overview of the current economic situation in your country and identifies a specific area of inquiry. The second paper is linked to the first by developing a formal model, based on theory, to analyze your specific inquiry, and the third paper is a conclusion/policy recommendation for your country, again, based on your model from paper number two. Each paper is worth 5% of your final grade.

There will be a midterm and a final exam scheduled on Tuesday the 14th of October and during exam week from December 13-19. Each exam is worth 25% of your grade.

15% of your grade will be class participation. Notice this does not say class attendance. You will be required to engage actively in the discussions in this class. Do NOT assume that everyone gets an A for class participation or that class participation can “only improve your grade” for it will be possible to receive an F in class participation.

10% of your grade will be the cumulative result of four problem sets.

The last component of this course is a Service learning component (SLC). The purpose of the SLC is two-fold. First, it serves as exposure to poverty in our community. Second, it is a methodological tool to help learn about economic theory, particularly theories of human capital development.

Each student will be required to volunteer 10 hours, approximately 1 hour per week, with a person or group that suffers from the effects of poverty. Avery Gholston, Shepherd Program Community Service Coordinator and Stacy McLoughlin, Shepherd Program, Service Learning Coordinator will assist you in choosing an appropriate placement.

Additionally, you are required to write in your journal after each volunteer experience. Please note the date and the amount of time you volunteered. Your entry should reflect on your experience. How did it feel? What did you do? Who are you serving? Who is serving you? What did you think about? How does this experience influence how you think about underdevelopment and poverty? Is there a connection through your previous academic study to your work? Are there dimensions of your community that you have not yet explored or fully understood? These are your own reflections. They will also serve as helpful reminders for the final assignment of the semester. Although your journal will not be graded, it may serve you to keep thorough notes/reflections for use in your final paper.

The final assignment will require you to write a 3-4 page paper linking your experience to a particular theory from class. In class we will introduce and use numerous theories and models of development and the SLC is an experiential component allowing the theory to come “alive.” For example, what is the relationship between nutrition and income? Is it causal? Is it two-way? Your service experience is intended to help you determine the answer to these questions. This paper will be graded and will count for the remaining ten percent of your final grade.

This assignment is important, because the only way to truly understand poverty or underdevelopment is to be poor. I do not expect anyone to take an oath of poverty to complete this course. However, I do believe there is something to be learned from working with people who are poor. This service learning experience is aimed at enriching your understanding of underdevelopment and hopefully to attain a higher level of compassion and understanding when thinking about economic/social policy and poverty.

To begin this part of the course each student must meet with Avery Gholston, Community Service Coordinator, and Stacy McLoughlin, Service Learning Coordinator, during the first week of the term. Avery and Stacy will hold joint office hours in Newcomb 20, Monday, Wednesday and Thursday from 2:00 p.m. to 5:00 p.m. during the week of September 15^th. You may schedule appointment on the first day of class or by e-mailing Avery at gholstona@wlu.edu.

15% of your grade will be based on 3 writing assignments.	(1) Background* 4-5 pp. (2) Theoretical model* 4-5 pp. (3) Policy Brief* 2-3 pp. must use 12 pt. Ariel font, double spaced. All three sections of the paper will be due as one paper on December 9, 2003. This is exactly what I want from you writinghtm.htm* AN EXCELLENT PAPER TO USE AS A MODEL FOR YOUR OWN WORK: http://home.wlu.edu/~blackmerh/restrict/casey1.pdf
25% of your grade will be based on a midterm exam.	October 14
25% of your grade will be based on a final exam.	Dec. 13-19
15% of your grade will be class participation.	(A*) SEE BELOW
10% of your grade will be the cumulative result of four problem sets.	1 Sept. 2 Oct. 23 3 3,3,3, for Stiglitz' book Dec. 8 4 problem TBA Dec. 11
10% of your grade will be based on a final SLC paper.	Your journal and SLC paper are due December 11, no exceptions.

***PREPARATION FOR DISCUSSION SECTIONS

100 Word Abstracts

Throughout the term articles will be assigned (A*) that will be the focus of a subsequent discussion. Students will be required to turn in--at the beginning of the class the article will be discussed--a 100 word abstract based on their reading (lots of reflection and a bit of writing). Abstracts must: (1) identify the question or issue being explored in the article, (2) the author’s hypothesis and if they have a view on the validity of the hypothesis if they express one, and (3) a brief summary of the evidence they bring to bear on the hypothesis and whether it is consistent with the hypothesis--if they discuss evidence.

READING POLICY

Students are expected to read the assigned materials for section discussions. Discussion is contingent upon preparation by all of the stakeholders in the educational process--faculty and students. It is the responsibility of all of us to be prepared to participate and learn together. Hence, if you have not read the assigned material you should not attend the discussion section.

Course Outline:

Week, Required Reading

1, September 11, What do economists do? , Service Learning

September 16, 18 - H&R 1 & 2 (A*) The Fall and Rise of Development Economics

2, September 23, 25 - H&R 3 & 4 (A*) Growth Strategies by Dani Rodrik

3, September 30 and October 2 - H&R 5 & 6, (A*) Poverty Reduction and Economic Growth

4, October 7, 9 – H&R 8 and (A*) PROGRESA 4-01.pdf

5, October 14 – Midterm Exam

6, October 21, 23 - Sen Amartya. 1999. Development as Freedom. Random House.

7, October 28, 30 - H&R 9 and (A*)Are Educated Workers Really More Productive?

8, November 4, 6 - H&R 10 and (A*) Interest Rates in the North and Capital Flows to the South: Is There a Missing Link?

9, November 11, 13 - H&R 11 and (A*) Rural Poverty Dynamics: Development Policy Implications