ECON 982L: Topics in Economic Development & Transition
Spring 2010
Friday 9-11 AM, Room R0.03/4
Professor Chris Woodruff, 1.119
Office Hours: Thursday 2-3:45 or by appointment
c.woodruff@warwick.ac.uk
“The consequences for human welfare involved in questions like these are
simply staggering: Once one starts to think about them, it is hard to think
about anything else.” (Robert Lucas, “On the Mechanics of Economic
Development”)
This course offers an introduction to recent research macroeconomic issues of economic
development. By macroeconomics, we mean broad ideas rather than monetary policy or
growth. As is always the case, there are so many topics, and so little time. The syllabus is
designed to include a wide variety of research methods, often applied to the same
question.
Grades will be determined by performance on the following assignments (weight in grade
in parentheses):
1) Research paper. (20%) Focusing on one topic which we cover in the course,
summarize (succinctly!) the state of knowledge on that topic, and then critique the
research on the topic. Which research—theoretical or empirical—is most
convincing? What are the most important questions left unanswered, or answered
only unconvincingly?
2) Final exam. (80%)
READINGS:
Introduction
Week 1 (22 January)
The Big Picture
*Easterly, William, 2009, “Can the West Save Africa?,” Journal of Economic
Literature, Vol 47(2), pp. 373-448 [Link to NBER version]
Burnside, Craig and David Dollar, 2000, “Aid, Policies, and Growth.” American
Economic Review Vol. 90(4), pp. 847–68. [Link]
Banerjee, Abhijit and Esther Duflo, 200, “The Economic Lives of the Poor,”
Journal of Economic Perspectives, Vo. 21(1), pp. 141-167. [Link]
*Caselli, Francesco (2005), “Accounting for Cross-Country Income Differences,”
Handbook of Economic Growth [Link]
*Mankiw, N Gregory, David Romer and David N. Weil, 1992, “A Contribution to
the Empirics of Economic Growth,” Quarterly Journal of Economics, 107,
pp. 407-37. [Link]
Week 2 (29 January)
Institutions and History
*Avner Greif. 1994. “Cultural Beliefs and the Organization of Society: A
Historical and Theoretical Reflection on Collectivist and Individualist
Societies.” Journal of Political Economy, 102 (October 1994): 912–
50.[Link]
Botticini and Ekstein, “From Farmers to Merchants, Conversions and Diaspora:
Human Capital and Jewish History,” Journal of the European Economic
Association, 5(5) pp. 885-926, September 2007. [Link]
*Acemoglu, Daron, Simon Johnson, and James Robinson (2001), "The Colonial
Origins of Comparative Development: An Empirical Investigation",
American Economic Review, 91, 1369-1401 [Link]
*Engerman and Sokoloff, 2000, “History Lessons: Institutions, Factor
Endowments and Paths of Development in the New World, Journal of
Economic Perspectives, 14(3), pp. 217-232 [Link]
Acemoglu, Daron and Simon Johnson, 2005, “Unbundling Institutions,” Journal
of Political Economy, 113(5), pp. 949-995. [Link]
Albouy, David, 2008, “The Colonial Origins of Comparative Development: An
Investigation of the Settler Mortality Data”, NBER Working paper 14130.
[Link]
Week 3 ( 5 February)
Property rights, Contract Enforcement, Corruption
*Johnson, Simon, John McMillan and Christopher Woodruff. "Property Rights
and Finance," American Economic Review, December 2002. [Link]
Di Tella, Rafael, Sebastián Galiani and Ernesto Schargrodsky, 2007, “The
Formation of Beliefs: Evidence from the Allocation of Land Titles to
Squatters,” Quarterly Journal of Economics, Vol. 122 (1), pp. 209-241.
[Link]
Timothy Besley. 1995. “Property Rights and Investment Incentives: Theory and
Evidence.” Journal of Political Economy, 103(5), pp 903-957. [Link]
*Goldstein, Marcus and Christopher Udry, 2008, “The Profits of Power: Land
Rights and Agricultural Investment in Ghana,” Journal of Political
Economy, forthcoming. [Link]
*Ben Olken, “Monitoring Corruption: Evidence from a Field Experiment in
Indonesia,” Journal of Political Economy 115 (2), pp. 200-249, April
2007. [Link]
Mauro, Paolo, 1995, “Corruption and Growth,” Quarterly Journal of Economics
110 (3), 681-712. [Link]
Week 4 (12 February)
Firms and Inequality
*Ghatak, Maitreesh and Neville Nien-Huei Jiang (2002), "A Simple Model of
Inequality, Occupational Choice and Development," Journal of
Development Economics, 69(1), pp. 205-226. [Link]
Abhijit Banerjee and Andrew Newman. 1993. “Occupational Choice and the
Process of Development,” Journal of Political Economy 101(1), pp. 274298. [Link]
Banerjee, Abhijit and Sendhil Mullainathan, 2008, “Limited Attention and
Income Distribution”, mimeo MIT [Link]
*Banerjee, Abhijit, Dilip Mookherjee, Kaivan Munshi and Debraj Ray (2001).
“Inequality, control rights, and rent seeking: Sugar cooperatives in
Maharashtra,” Journal of Political Economy, 109(1), pp. 138-190. [Link]
*Banerjee, A., P. Gertler and M. Ghatak. 2002. "Empowerment and Efficiency:
Tenancy Reform in West Bengal," Journal of Political Economy, 110(2),
pp. 238-280. [Link]
Besley, Tim and Robin Burgess, 2000, Land Reform, Poverty Reduction and
Growth: Evidence from India,” Quarterly Journal of Economics, 115(2),
pp. 389-430 [Link]
Week 5 (19 Feb)
Finance
Lucas, Robert E., 1990, “Why Doesn’t Capital Flow from Rich to Poor
Countries?,” American Economic Review, 80(2), pp 92-96.[Link]
*Rajan, R. and Luigi Zingales, 1998, "Financial Dependence and Growth,"
American Economic Review, 88 (3), 559-586. [Link]
Caselli, Francesco and James Feyrer, 2007, “The Marginal Product of Capital,”
Quarterly Journal of Economics, Vol. 122(2), pp.535–568. [Link]
King, Robert G. and Ross Levine, 1993, "Finance and Growth: Schumpeter Might
be Right," Quarterly Journal of Economics, 108(3), pp. 717-737. [Link]
*De Mel, Suresh, David McKenzie and Christopher Woodruff, 2008, “Returns to
Capital in Microenterprises: Evidence from a Field Experiment,”
Quarterly Journal of Economics, 123(4), pp. 1329-1372. [Link]
Banerjee and Duflo, 2008, “Do Firms Want to Borrow More? Testing Credit
Constraints Using a Directed Lending Program,” MIT mimeo [Link]
*Abhijit Banerjee and Kaivan Munshi, 2004, “How Efficiently is Capital
Allocated? Evidence from the Knitted Garment Industry in Tirupur.”
Review of Economic Studies, 71(1), pp. 19-42. [Link]
Khwaja, Asim and Atif Mian, 2005. “Do Lenders Favor Politically Connected
Firms? Rent provision in an Emerging Financial Market,” Quarterly
Journal of Economics, 120(4), pp. 1371-1411. [Link]
Microfinance
*Banerjee, Abhijit, Esther Duflo, Rachel Glennerster and Cynthia Kinnan (2009)
The Miracle of Microfinance? Evidence from a Randomized Evaluation,
Mimeo MIT. [Link]
Karlan, Dean and Jonathan Zinman, 2009, “Expanding Microenterprise Credit
Access: Using Randomized Supply Decisions to Estimate the Impacts in
Manila,” Mimeo Yale [Link]
Week 6 (26 Feb)
Firm Efficiency
Harvey Leibenstein , 1966, “Allocative Efficiency vs. ‘X-Efficiency’,” The
American Economic Review, Vol. 56, No. 3. (Jun., 1966), pp. 392-415.
[Link]
*Bloom, Nicholas and John Van Reenen, 2007, “Measuring and Explaining
Management Practices Across Firms and Countries,” Quarterly Journal of
Economics, November 2007. [Link]
*Hsieh, Chang-Tai and Peter Klenow, 2007, “Misallocation and Manufacturing
TFP in China and India,” NBER Working Paper 13290. [Link]
Foster, Lucia, John Haltiwanger and Chad Syverson, 2008, “Reallocation, Firm
Turnover, and Efficiency: Selection on Productivity or Profitability,”
American Economic Review, 98(1), pp. 394-425. [Link]
Banerjee and Moll 2009, “Why Does Misallocation Persist?”, Mimeo MIT [Link]
Bloom, Nick, Raffaella Sadun and John Van Reenen, “The Organization of Firms
Across Countries,” NBER Working Paper 15129 [Link]
*Bloom, Nick, Benn Eifert, Aprajit Mahajan, David McKenzie and John Roberts,
2009, “Management Matters: Evidence from India”, working paper,
Stanford University [Link]
*Sutton, John, 2004, “The Auto-component Supply Chain in China and India: A
Benchmarking Study.” Unpub. Paper, LSE. [Link]
John Sutton. 2000. “The Indian Machine-Tool Industry: A Benchmarking Study.”
Unpub Paper, LSE. [Link]
Week 7 (5 Mar)
Market Forces
*Murphy, Kevin, Andrei Shleifer and Robert Vishny (1989), "Industrialization
and the Big Push", Journal of Political Economy [Link]
*Michael Kremer. 1993. “The O-Ring Theory of Economic Development.”
Quarterly Journal of Economics v. 108 no. 3, pp. 551-75. [Link]
Rosenstein-Rodan, Paul, 1943, “Problems of Industrialization of Eastern and
South- Eastern Europe”, Economic Journal v 53, No. 210/211, p 202-11.
*Verhoogan, Eric, 2008, “Trade, Quality Upgrading, and Wage Inequality in the
Mexican Manufacturing Sector,” Quarterly Journal of Economics, Vol
123(2), pp. 489-530. [Link]
Donaldson, David, “Railroads of the Raj: Estimating the Impact of
Transportation Infrastructure” [Link]
Week 8: (12 Mar)
Organization of Firms and Interfirm Relationships
*Bertrand, Marianne, Simon Johnson Krislert Samphantharak and Antoinette
Schoar, 2008, “Mixing Family With Business: A Study of Thai Business
Groups and the Families Behind Them,” The Journal of Financial
Economics, 88 (3), 466-498. [Link]
Khanna, Tarun and Yishay Yafeh, 2007, “Business Groups in Emerging Markets:
Paragons of Parasite?’ Journal of Economic Literature, Vol. 45, pp. 331372 [Link]
*Andrabi, Tahir, Jishnu Das and Asim Khwaja, 2009, “Report Cards: The Impact
of Providing School and Child Test-scores on Educational Markets,”
working paper, Kennedy School of Government [Link]
McMillan, John and Christopher Woodruff, 1999, “Interfirm Relationships and
Informal Credit in Vietnam,” Quarterly Journal of Economics, 114: 12851320. [Link]
*Banerjee, Abhijit and Esther Duflo, 2000, “Reputation Effects and the Limits of
Contracting: A Study of the Indian Software Industry,” Quarterly Journal
of Economics, 115(3), pp. 989-1017 [Link]
Iyer, Raj and Antoinette Schoar, 2009, “The Importance of Holdup in
Contracting: Evidence from a Field Experiment,” working paper, MIT.
[Link]
Andrabi, Tahir, Maitreesh Ghatak and Asim Khwaja, 2006, “Subcontractors for
Tractors: Theory and Evidence on Flexible Specialization, Supplier
Selection, and Contracting,” Journal of Development Economics
Volume 79(2), pp. 273-302 [Link]
Week 9 (19 Mar)
Informality
De Soto, Hernando, 1989, The Other Path, pp. 231-258.
Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei
Shleifer, 2002, “The Regulation of Entry,” Quarterly Journal of
Economics, 117(1), pp. 1-37. [Link]
*Kaplan, David, Eduardo Piedra, and Enrique Seira, 2007, “Entry Regulation and
Business Start-ups: Evidence from Mexico,” World Bank Policy Research
Working Paper 4322. [Link]
Bruhn, Miraim, 2008, “License to Sell: The Effect of Business Registration
Reform of Entrepreneurial Activity in Mexico,” World Bank Policy
Research Working Paper 4538. [Link].
Bertrand, Marianne and Francis Kramarz, 2002, “Does Entry regulation Hinder
Job Creation? Evidence from the French Retail Industry,” Quarterly
Journal of Economics, 117(4), pp 1369-1413. [Link]
Rauch, Jim, 1991, “Modeling the Informal Sector Formally” Journal of
Development Economics, 35(1), pp. 33-47. [Link]
*Farrell, Diana, 2004, “The Hidden Dangers of the Informal Economy, Mckinsey
Quarterly, 2004, Issue Number 3. [Link]
*Lagakos, David, 2009, “Superstores or Mom and Pops? Technology Adoption
and Productivity Differences in Retail Trade,” Federal Reserve Bank of
Minneapolis Research Department Staff Report 428 [Link]
*De Mel, Suresh, David McKenzie and Christopher Woodruff, 2009, “What is the
Cost of Formality? Experimentally Estimating the Demand for
Formalization,” mimeo Warwick [Link]