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Prof Oriana Bandiera 32L.3.02 and Prof Robin Burgess 32L.3.03B

This course is available on the BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Economics and Economic History, BSc in Economics with Economic History, BSc in Geography with Economics, BSc in Government and Economics, BSc in Philosophy and Economics, BSc in Philosophy, Politics and Economics, BSc in Politics and Economics and MSc in Development Studies. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.

Students should have completed Microeconomic Principles I or II (or equivalent) and Macroeconomic Principles (or equivalent). A knowledge of introductory econometrics at least to the level provided by a course such as EC220 Introduction to Econometrics, or EC221 Principles of Econometrics, is also necessary.  Students who do not have all three pre-requisites and General Course students must consult with Professor Bandiera or Dr Fischer before selecting it.

The course provides an introduction to selected issues in economic development including theory, evidence and policy. It will analyse economic institutions in developing countries focusing around the themes of ''Markets, Institutions and Welfare'' and "Public Policy and Welfare". Failures in key markets such as those for land, labour, credit and insurance have far reaching implications both for productive efficiency and welfare. The story of economic development is, in many ways, one of how informal, imaginative institutions have evolved to fill the gaps left by these market failures. The course will study how institutions have evolved to cope with missing markets, and how they affect the allocation and the distribution of resources. The course will analyse both the channel through which the institutional environment affects efficiency and welfare and how public policy can be designed to increase welfare and growth. The course has a strong applied focus. Under each section we want to derive testable implications from the theory, subject these to econometric testing, comment on the robustness of the results obtained and draw out policy conclusions.

15 hours of lectures and 10 hours of classes in the MT. 15 hours of lectures and 10 hours of classes in the LT.

Feedback is provided for four assignments (two in MT and 2 in LT)

Teaching in the course will be done mainly from journal articles drawn from the forefront of theoretical and applied research in development economics. Background texts for the course are A. Banerjee and E. Duflo, Poor Economics, Public Affairs, 2011 and D. Ray, Development Economics, Princeton UP, 1998.

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the summer exam period.