IDEC8087 Issues in Development Policy
| Offered By | International and Development Economics Program |
|---|---|
| Academic Career | Graduate Coursework |
| Course Subject | International and Developmental Economics |
| Offered in | IDEC8087 will not be offered in 2010 |
| Unit Value | 6 units |
| Course Description | This course is an introduction to the analysis of core issues in development. It is an applied course that tackles major real world problems faced by policy-makers. The course combines description and analysis with an emphasis on the elaboration of simple and useful theoretical models for an understanding of the issues that comprise the subject of development economics. Its aim is to provide students with some foundational analytic tools for addressing core problems associated with economic development today while drawing on some experiences from developing economies. |
| Indicative Assessment | Tutorials (presentation & classroom participation) 20%, Essay 40%, Final examination 40% |
| Workload | Instruction will be by a two-hour lecture and a one-hour tutorial each week. The weekly tutorial is designed to provide an opportunity for discussion of the required readings as well as of any questions arising from the lecture. |
| Course Classification(s) | AdvancedAdvanced courses are designed for students having reached 'first degree' level of assumed knowledge, which provide a deep understanding of contemporary issues; or 'second degree' and higher levels of knowledge; or for transition to research training programs. and SpecialistSpecialist courses are designed for students having reached 'first degree' level of assumed knowledge, which provide for the acquisition of specialist skills; or 'second degree' and higher level of knowledge; or for transition to research training programs; or knowledge associated with professional accreditation. |
| Areas of Interest | Economics |
| Prescribed Texts |
The textbook used for this course is: Growth & Development: With Special Reference to Developing Economies by A. P. Thirlwall (Palgrave Macmillan, Eighth Edition 2006). The textbook can be purchased from The Co-op Bookshop on campus. The textbook is also available on two-hour reserve at the Chifley Library. Supplementary readings will be identified separately for students interested to explore a topic more deeply. The Course Reader may be purchased from Reception. A copy of the Reader has also been placed on two-hour loan in the Chifley Library. |
| Other Information |
Tutorials The weekly tutorials are an opportunity for discussion of the main themes in the lectures (see tutorial questions in lecture outlines). Tutorial assessment is based on an individual oral presentation (10%) as well as the level of participation in tutorial discussion over the course of the semester. Final Exam The exam at the end of the course will be a synoptic review of the main themes covered throughout the semester. The exam is "closed book" (i.e. dictionaries are the only resource that may be taken into the exam room). Essay The purpose of the essay is to provide students with the opportunity to gain deeper knowledge and understanding of the interaction between economic, institutional and environmental factors in determining the cross-country differences in growth performance. While the essay is not intended to be a major research exercise, students are expected to interpret facts and synthesise existing knowledge and understanding. When writing the essay please keep in mind: Why is this topic important? What does it tell about the character of policy formation and economic development? What causal factors are involved in economic growth? What factors affect policy strategies and institutional, economic and environmental outcomes? Essay Topic Explain the cross-country differences in economic growth performance in the Asia-Pacific region over the last half-century. In your answer, please consider the economic, environmental and institutional factors that affect economic performance. Illustrate and support your arguments with reference to country and/or regional examples. Number of words: 2000 Recommendations when Writing your Essay 1. Your essay should have a point to it. It is not sufficient just to summarise what you have read. You will probably need to give some account of what you have read in order to discuss it, but do not try to tell all you know or have read about the topic. 2. Consider what is relevant to the point - or points - you want to make, and prune out everything else. It is usually better to concentrate on a single issue and develop it in depth. 3. Have an introduction and a conclusion. 4. Define the topic and aspects of the problem you intend to examine and state these in the introduction. 5. Pay careful attention to the word limit. 6. Do not pad your essay with long quotations. Whatever passages you quote should be brief, to the point, and properly referenced. 7. Number the pages and double-space the text. 8. Pay careful attention to grammar, punctuation and spelling. (If you have problems with grammar, it may help to read your essay through, out loud; this often picks up mistakes.) 9. Do not use abbreviations like "etc", "&" and "%" in the body of the text. 10. Use the Crawford School reference style for references and notes, and use it consistently. Adapted from http://arts.anu.edu.au/philosophy/undergr/criteria General Assessment Criteria for the Essay The following assessment criteria will be used as a guide when your essay is graded: (1) Structure (relevance of essay to topic, coverage of the topic); (2) Argument (logically developed arguments, accuracy of presentation of facts, critical understanding of the issues); (3) Originality (clear demonstration of original and creative thought); (4) Style (fluency of writing, clarity and succinctness); (5) Presentation (legible and well set out structure with appropriate headings, sub-headings, paragraphs and sentences, appropriate word length); (6) Mechanics (grammatically correct sentences, effective use of table and figures where appropriate, correct spelling); (7) Sources (adequate acknowledgement of all sources in the Crawford School reference style). Adapted from Educational Services and Teaching Resources, Murdoch University. Submission of the Essay All written work needs to first be submitted through the www.turnitin.com site (hotlinked from your subject WebCT site), and all work is screened using Turnitin?s Originality Reports. The I.D. for this course is xxxxx and the password is xxxx. Students are able to view the reports on their drafts before final on-line submission to Turnitin. Full details on the use of Turnitin are available at www.turnitin.com. Queries about its use should be directed to the Academic Skills Advisor, Anne Patching. The final hard-copy version of your essay must be submitted at the last class for the semester. WEEKLY LECTURE OUTLINE Lecture 1 Development and underdevelopment: an overview ? Why study development economics: some critical questions ? The meaning of development and the challenge of development economics ? The perpetuation of underdevelopment Readings: Chapter 1 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Maddison, A., 2001. ?The Contours of World Development? and ?Appendix A3 Population, GDP and GDP Per Capita in 56 Asian Countries, 1820-1998? in A. Maddison, The World Economy: A Millennial Perspective, OECD, Paris. Helpman, E., 2004. ?Background? Chapter 1 in E. Helpman, The Mystery of Economic Growth, The Belknap Press of Harvard University Press, Cambridge Massachusetts. Tutorial questions: ? How would you define the process of economic development? ? What forces perpetuate underdevelopment? ? What do you see as the major challenges confronting the developing countries? Lecture 2 The development gap and the measurement of poverty ? The development gap and income distribution in the world economy ? The measurement and comparability of per capita income ? Purchasing power parity (PPP) and measuring poverty Readings: Chapter 2 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Ghose, A. K., 2004. ?Global inequality and international trade?, Cambridge Journal of Economics, March Sutcliffe, R., 2004. ?World inequality and globalisation?, Oxford Review of Economic Policy, Spring Tutorial questions: ? How would you construct a Lorenz curve and calculate the Gini ratio for the measurement of income inequality? ? What difficulties arise in measuring and comparing the per capita incomes of poor countries using the US$ as the unit of account? ? What do you understand by the concept of purchasing power parity (PPP), and how would you make PPP calculations of per capita income across countries? Lecture 3 The characteristics of underdevelopment and structural change ? The characteristics of underdevelopment ? Stages of development and structural change ? Industrialisation and growth ? Rostow?s stages of growth ? Kaldor?s growth laws Readings: Chapter 3 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Tutorial questions: ? What is the importance of the distinction between diminishing returns activities and increasing return activities? ? Why have economists identified a certain ratio of investment to GDP as necessary condition for self-sustaining growth? ? In what ways does poor education and poor health affect the performance of an economy? ? What major structural changes take place during the course of development? Lecture 4 Theories of economic growth: why growth rates differ between countries? ? Growth theories (the classical, the Harrod-Domar and neoclassical growth theories) ? The production function approach to the analysis of growth ? Production function studies of developing countries ? New (endogenous) growth theory and the macrodeterminants of growth Readings: Chapter 4 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). North, D., 1994. ?Economic Performance Through Time?, American Economic Review, 84: 359-68. Olson Jr., M., 1996. ?Big Bills left on the Sidewalk: Why some nations are rich and others poor?, Journal of Economic Perspectives, 10(2): 3-24. Lewis, W. A. 2004., ?pp. 243-256?, in W.A. Lewis, The Power of Productivity, The University of Chicago Press, Chicago. Tutorial questions: ? What are the special properties of the Cobb-Douglas production function, and how might the function be used to calculate the sources of growth? ? What is the difference between exogenous and endogenous technical progress? ? What factors does the growth of ?total factor productivity? depend on? ? What have we learned from the major studies of the macrodeterminants of growth in developing countries? Lecture 5 Factors in the development process ? Land, labour and agriculture ? The role of agriculture in development ? Economic development with unlimited supplies of labour ? Rural-urban migration and urban unemployment ? Capital and technical progress ? How societies progress technologically Readings: Chapters 5 and 6 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Psacharopoulos, G., 1994. ?Returns to investment in education: a global update?, World Development, September Todaro, M., 1969. ?A model of labour migration and urban unemployment in less developed countries?, American Economic Review, March Tutorial questions: ? What is the importance to economic development of rapid productivity growth in agriculture? ? What factors hold back productivity growth in agriculture? ? In what sense is there disguised unemployment on the land? ? Explain the continued process of rural-urban migration despite growing unemployment in urban areas. ? What is meant by the process of capital accumulation? ? Why is the rate of return on investment in education higher in developing countries than in developed countries? Lecture 6 Dualism, centre-periphery models and the process of cumulative causation ? Dualism and the process of cumulative causation ? International inequality and centre-periphery models ? Models of ?regional? growth rate differences ? The new economic geography Readings: Chapter 7 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Higgins, B., 1956. ?The ?dualistic theory? of underdeveloped areas?, Economic Development and Cultural Change, January Lucas, R., 1990. ?Why doesn?t capital flow from rich to poor countries?, American Economic Review, Papers and Proceedings, May Tutorial questions: ? What do you understand by the terms technological dualism, social dualism and geographic dualism? ? In what ways might dualism impede the functioning of the total economy? ? What are the media through which the process of circular and cumulative causation work? ? How does distance and geography affect the geographical pattern of economic development? Lecture 7 Resource allocation in developing countries: the market mechanism and the role of the state ? The market mechanism and market failures ? The role of the state and corruption ? The allocation of resources: the broad policy choices ? Choice of techniques ? Balanced versus unbalanced growth ? Investment criteria Readings: Chapter 9 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Arndt, H. W., 1988. ?Market failure and underdevelopment?, World Development, February Easterly, W., 2002. ?Governments Can Kill Growth?, Chapter 11 pp. 217-231 in W. Easterly, The Elusive Quest for Growth, The MIT Press, Cambridge Massachusetts. Krueger, A. O., 1990. ?Government Failures in Development?, Journal of Economic Perspectives, 4 (3): 9-23. Ranis, G., 1962. ?Investment criteria, productivity and economic development: an empirical comment?, Quarterly Journal of Economics, May Stewart, F. and Ghani, E., 1991. ?How significant are externalities for development??, World Development, June Streeten, P., 1993. ?Markets and states: against minimalism?, World Development, August Tutorial questions: ? What is the role of markets in the development process? ? Distinguish the different types of market failure and the role that governments can play in rectifying market failures. ? How can the role of the state be made more effective? ? What major factor distinguishes static from dynamic investment criteria for the allocation of resources? Lecture 8 Development and the environment ? A model of the environment and economic activity ? The market-based approach to environmental analysis ? The harvesting of renewable resources ? Non-renewable resources ? Measuring environmental values ? Sustainable development Readings: Chapter 11 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Grossman, G. and A. Krueger, 1995. ?Economic growth and the environment?, Quarterly Journal of Economics, May Tutorial questions: ? What are the functions of the environment in supporting economic activity? ? What is an externality, and why are externalities considered to be a problem? ? What conditions determine the efficient use of renewable and non-renewable resources? ? What are the different types of value that should be included in social costs? ? Define and explain the idea of sustainable development. Lecture 9 Financing development from domestic resources ? Financial systems and economic development ? The informal financial sector ? Critics of financial liberalisation and empirical evidence ? Fiscal policy and taxation ? The Keynesian approach to the financing of development ? The quantity theory approach to the financing of development ? Non-inflationary financing of investment Readings: Chapter 14 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Levine, R., 1997. ?Financial development and economic growth: views and agenda?, Journal of Economic Literature, June Tutorial questions: ? How can ?monetisation? of the economy help to raise the level and productivity of capital accumulation in developing economies? ? What are the essential features of the informal financial sector in developing countries? ? Outline the main requisites of a well-developed financial system. ? What forms does financial repression take in developing countries? ? What are the dangers of financial liberalisation, and on what factors does the success of liberalisation depend? ? Suggest reforms to the tax system in developing countries that would promote both equity and capital accumulation. Lecture 10 Foreign assistance, debt and development ? Dual-gap analysis and foreign borrowing ? Capital imports, domestic saving and the capital-output ratio ? Types of international capital flows ? The debate over international assistance to developing countries ? Foreign direct investment and multinational corporations ? Optimal borrowing and sustainable debt Readings: Chapter 15 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Allsopp, C. and V. Joshi, 1991. ?The assessment: the international debt crisis?, Oxford Review of Economic Policy, Spring Bosworth, S. and S.Collins, 1999. ?Capital flows to developing economies: implications for savings and investment?, Brookings Papers on Economic Activity, 1 Collier, P. and D.Dollar, 2004. ?Development effectiveness: what have we learned??, Economic Journal, June Tutorial questions: ? What is the distinctive contribution of dual-gap analysis to the theory of development? ? Under what circumstances will foreign borrowing (a) raise the rate of growth of income, and (b) raise the rate of growth of output? ? How might the flow of resources to developing countries be augmented, and what criteria should govern their distribution between countries? ? What are the advantages and disadvantages of FDI in developing countries? ? What is the nature of the debt problem in developing countries? Lecture 11 Trade and development ? The gains from trade ? Trade liberalisation, exports and growth ? Models of export-led growth ? Import substitution versus export promotion ? Technical progress and the terms of trade ? Effective protection Readings: Chapter 16 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Bleaney, M. and D. Greenaway, 1993. ?Long run trends in the relative prices of primary commodities and in the terms of trade of developing countries?, Oxford Economic Papers, July Edwards, S., 1993. ?Openness, trade liberalisation and growth in developing countries?, Journal of Economic Literature, September Greenaway, D., W. Morgan and P. Wright, 2002. ?Trade liberalisation and growth in development countries?, Journal of Development Economics, 17 Tutorial questions: ? What is the essence of the distinction between static and dynamic gains from trade? ? Why might there be a tendency for the terms of trade to move against primary products and primary-producing countries, and what does the empirical evidence show? ? What has been the impact of trade liberalisation exports and economic growth in developing countries? ? Why are regional trade agreements (RTAs) inferior to the generalised freeing of trade? ? What do you understand by the concept of ?effective protection?, and how is it measured? Lecture 12 The balance of payments, international monetary assistance and development ? Balance-of-payments-constrained growth ? The exchange rate and devaluation ? The IMF supply-side approach to devaluation ? Capital flows ? Exchange rate systems for developing countries ? The East Asian financial crisis: a cautionary tale ? The international monetary system and developing countries Readings: Chapter 17 in Growth & Development: With Special Reference to Developing Economies (Thirlwall 2006). Tutorial questions: ? What factors determine the demand for a country?s exports and imports? ? Can the devaluation of a country?s currency guarantee balance-of-payments equilibrium on the current account? ? What do you understand by the IMF?s ?supply-side approach to devaluation? in developing countries? ? What factors need to be taken into account in choosing a country?s exchange-rate regime? ? What are the lessons of the financial crisis in South-East Asia in 1997? Lecture 13 Summary and conclusion ? The goal of development ? Revisiting the challenge of development ? Development issues: settled and open Academic and Research Skills Adviser Anne Patching Room 112 (first floor) Email: anne.patching@anu.edu.au Tel: 6125 6554 Academic and Research Skills Workshops organised during the semester will cover specific topics relevant to the reading and writing requirements for this subject. Students may also refer to the IDEC Academic and Research Skills Booklet. |
| Academic Contact | Dr Ligang Song |
The information published on the Study at ANU 2010 website applies to the 2010 academic year only. All information provided on this website replaces the information contained in the Study at ANU 2009 website.
