Introduction Economic development Development economics Why should we be interested in development economics? 1 What is Development? Indicators and Issues Seven dimensions of development Income and income growth Poverty and hunger Inequality and inequity Vulnerability to poverty Basic needs: human development Sustainability in the use of natural resources Quality of life Development goes beyond income, but can income growth deliver development? Conclusion: development is multidimensional, so can we agree on what it is? 2 The State of Development Income growth and the convergence club Poverty and hunger Inequality Basic human needs Sustainability in resource use Quality of life Conclusion 3 History of Thought in Development Economics Introduction: why history matters Basic principles in analysing the history of thought in development economics Selected schools of thought in development Conclusion 4 Impact Evaluation of Development Policies and Programs How do we know what works for development? Objectives and overview of impact evaluation Methods of impact evaluation Experimental design-rct Matching method to construct control groups: propensity score matching Difference-in-differences method Generalization of the diff-in-diffs approach: roll-outs with panel data Regression discontinuity designs (rdd) Event analysis and event-severity analysis Instrumental variables estimation Making impact evaluation more useful for policy purposes Qualitative methods Appendix 4: Econometrics of Impact Analysis Randomization Propensity score matching Difference-in-differences Staggered entry with panel data: roll-out of a program Regression discontinuity Event analysis Instrumental variables estimation 5 Poverty and Vulnerability Analysis Characterize welfare: choice of an indicator of wellbeing Separating the poor from the non-poor: choosing a poverty line (z) Poverty profile and aggregate indicators Vulnerability Other aspects of poverty Correlates of poverty: who are the poor? Where do they live? What do they do? How do they live? The geography of poverty: poverty maps Are there behavioral poverty traps? Reducing poverty 6 Inequality and Inequity Describing and measuring inequality Decomposing inequality Relationship between level of income (gdppc) and inequality: empirical evidence on the kuznets inverted u-curve The long-term evolution of inequality Pro-poor growth and the growth incidence curve The growth-inequality-poverty development triangle What roles for ethnic fractionalization and genetic diversity? What role for equity in development? Inclusive growth 7 International Trade and Industrialization Strategies Trade openness Gains from trade: why countries trade, but not everyone gains Absolute, comparative, and competitive advantage Trade policy and indicators of protection Using trade policy for development: tariffs and subsidies Dynamic gains from trade: import-substitution industrialization as a policy gamble Trade and industrialization strategies: how to choose? Is trade good for growth? Is trade good for poverty reduction? Trade and the environment Trade and food security Decline of the wto and threats to multilateralism 8 Explaining Economic Growth: The Macro Level The growth puzzle Generic modeling of income growth Capital accumulation for growth: the Harrod-Domar model Productivity growth and factor deepening: growth accounting in the Solow model Economic growth and structural transformation The role of agriculture in growth: dual-economy models The role of agriculture in growth: other models Endogenous economic growth 9 Exchange Rate Policies and Development Trade, financial flows, and exchange rate Exchange-rate regimes The real exchange rater and its effect on real balances Two examples of exchange-rate shocks 10 The Economics of Farm Households Importance of farm households Definitions of farm households Farm-household behavior models Responses to market signals: separability Net buyers, net sellers, and food security Can the family farm be competitive and survive? Risk and self-insurance in household behavior Intra-household allocation of resources and gender roles 11 Population and Development Definitions: demographic concepts Some data for world population History of world population and demographic transition Causes of population growth Population policy Other issues in population and development 12 Labor and Migration Labor and employment Rural-urban migration Extensions of the model and empirical results Impacts of migration Conclusion 13 Financial Services for The Poor The generic-lender problem Commercial banks Local moneylenders, or "usurers" Local sources of credit based on interlinkages in value chains Informal institutions: Roscas Village banks and self-help groups The microfinance revolution: group lending Mfis with individual loans: proximity lending Other issues in microfinance lending Impact evaluations on microfinance lending Increasing savings: offering saving opportunities and incentives Can the poor be insured? The promise of index-based weather insurance Mobile money and digital credit Conclusions on mfis: how useful are they for poverty reduction? 14 Social Programs and Targeting Determinants of income and paths out of poverty A typology of social programs The targeting of social programs: benefits and costs Errors in targeting: exclusion (type i) and inclusion (type ii) errors Targeting methods Quality of targeting Other issues in implementation of transfers Using social-safety-net (ssn) programs for efficiency gains and growth Impact evaluation of social programs: some examples The debate over cash transfers vs development programs for poverty reduction 15 Sustainable Development and The Environment Links between development, resource conservation, and environmental sustainability Negative externalities Incomplete property rights Public goods The sustainability objective Dilemmas in the environment-development relation Introducing new markets: payments for environmental services 16 Common Property Resources and Determinants of Cooperation Why are there common property resources? Economics of cpr use Grounds for pessimism about cooperative behavior Cooperative outcomes in non-cooperative games Determinants of cooperation and collective action Why secure property rights over land matter for economic development 17 Human Capital: Education and Health Why are education and health important for development? Indicators and status of education What determines the levels of schooling? Estimating the return to education Policy issue: conditional cash transfers Indicators and status of health What determines health achievements? Impact of health on development outcomes Issues in health policies: the debate around subsidies 18 Agriculture for Development Agriculture for development The state of world agriculture Determinants of agricultural growth Food security in developing countries The political economy of agriculture for development 19 Development Aid and Its Effectiveness Overview Aid in a historial perspective The evolution of foreign aid Fungibility of foreign aid Aid effectiveness from a macro perspective Evaluating the impact of foreign aid from a micro perspective The practice of foreign aid Aid strategies for greater effectiveness: what can be done? The debate on foreign aid Conclusion: toward a new aid architecture 20 Institutional Innovations and Development Institutions and development Assumptions underlying the new institutional economics Market failures induced by transaction costs Institutional responses to market failures Mechanisms of institutional change Examples of institutional innovations that help reduce transaction costs and/or compensate for market failures 21 Political Economy and The Role of The State Introduction Theories of the state The functionalist state The pluralist state: public choice Economics of public authority: rent-seeking, political influence, and corruption Strategies to limit rent-seeking

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