Module Code and Title:        DEV304 Development Problems and Policies

Programme:                          BA in Development Economics

Credit Value:                          12

Module Tutor:                        Sanjeev Mehta

General objective: The module examines alternative approaches of development. It provides an introduction to growth accounting and global growth experience. It fosters student’s ability to examine arguments on major development trade-offs. The module also examines the role of institutions in economic development. 

Learning outcomes – On completion of the module, students will be able to:

1. Describe various approaches to development.
2. Analyse the historical perspective on economic growth.
3. Apply relevant growth models to address development problems.
4. Analyse inequality and poverty measurement approaches.
5. Apply different methodologies of poverty and inequality analyses.
6. Examine the role of political institutions in economic development.
7. Assess the role of state in economic development.
8. Examine the impacts of various methods of financing development. 
9. Provide logical and evidence-based arguments on issues related to economic development.

Learning and Teaching Approach: 

Assessment Approach:

Each student will submit two assignments (10 marks each), with a focus to design alternative models or simulate to compare/evaluate the impact of a development intervention(s) one before mid-term covering Unit II, and, one after mid-term covering Unit III. Each assignment should have a maximum limit of 750-850 words. 

1    Appropriateness of a model

1    Defining the concepts

1    Use of appropriate analytical tools

5    Analysis and findings

2    Conclusion

Groups of 4-6 will complete a report based on an activity involving data analysis on poverty and inequality/ application of growth models/ cross sectional study on convergence. Report words limit: 1000-1200 words.

1    Situation analysis

2    Methodology of group work

6    Discussion on findings in the joint report

4    Peer review of individual reports 

2    Presentation (individually marked)

Each student will complete an essay on major development challenges from among    the issues covered in units IV and V. Word limit: 1000-1200 words.

2    Logical flows of thoughts

7    Ability to comprehend relevant issues in the debate

3    Evidence based arguments

1    Language skills

1    Subtleness of conclusion

1    Structure of the Essay

Students will take a written exam of 1.5-hr duration covering topics up to the mid-point of the semester. The exam will comprise structured questions like MCQ, fill-in-the-blanks, matching, definition, as well as open-ended essay questions.

Students will take a written exam of 2.5-hr duration encompassing all the subject matter covered in the semester. This assessment is comprehensive and summative in nature, and will comprise structured questions like MCQ, fill-in-the-blanks, matching, definition, as well as open-ended essay questions.

Overview of assessment approaches and marks

Pre-requisites: None 

Subject matter:

1. Unit I: Concepts of Growth and Development
   1. Meaning of growth and development; Modern economic growth (Simon Kuznet’s views); 
   2. Historical perspective of growth: Rostow’s stage theory
   3. Basic indicators of the measures development: Per Capita Income, PQLI, HDI, capability approach 
   4. Characteristics of developing world: diversity within commonality
   5. Development trajectories across nations and within them
2. Unit II: Growth Models (This unit will introduce students to define, and model growth under different assumptions.) 
   1. Structural change model (Lewis Model)
   2. Neo-classical counter revolution
   3. Big push strategy
   4. Harrod-Domar model
   5. Solow model 
3. Unit III: Development Problems and Policies 
   1. Poverty and Inequality
   2. Measuring inequality: Four criteria for inequality measurement, Lorenz curve, Gini coefficient
   3. Inequality, income and growth: inverted-U curve hypothesis, uneven and compensatory changes
   4. Policies for the political redistribution and growth 
   5. Absolute poverty: Extent and magnitude, Growth and poverty
   6. Poverty measurement: Head count ratio, poverty gap, FGT index, Human Poverty Index, Multi-dimensional Poverty Index
   7. Characteristics of the poor: demographic features, rural and urban poverty, women and children, assets, nutrition, replacement level fertility rate
   8. Mechanisms that generate poverty traps and path dependence of growth processes, policies to avoid poverty traps and path dependency 
   9. Policies and approaches to poverty alleviation: redistribution, direct interventions
4. Unit IV: Financing Development
   1. Domestic resource mobilisation: Taxes, capital market, frontloading, internal borrowing 
   2. External finance: International aid, FDI and external borrowing 
   3. Innovative development financing: crowdfunding, venture capital, public private partnership
5. Unit V: Political Institutions
   1. Rationale for development planning
   2. Relation between democracy and development 
   3. Alternative institutional trajectories and their relationship with economic performance
   4. With-in country differences in the functioning of state institutions 
   5. State ownership and regulations
   6. Government failure and corruption 

Reading List:

Essential Reading

Meier, G. M. & Rach, J.E. (2005). Leading Issues in Economic Development. 8^th Ed. Oxford University Press.

Ray, D. (2016). Development Economics. Oxford University Press. 

Todaro, M. P. & Smith, S. (2015). Economic Development. 12^th Ed. Pearson.

Nafziger,W.E.(2012). Economic Development. Cambridge University Press. 

Additional Reading

Banerjee, A., Benabou, R. & Mookerjee, D. (2006). Understanding Poverty. Oxford University Press.

Basu, K., edt. (2012). The New Oxford Companion to Economics in India. Oxford University Press.

Dasgupta, P. (2007). Economics: A Very Short Introduction. Oxford University Press. 

Easterly, W. (2007). The White Man’s Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Penguin. 

Putnam, R. (1994). Making Democracy Work: Civic Traditions in Modern Italy. Princeton University Press.

RGoB (2017). Bhutan Living Standard Survey Report 2017. National Statistics Bureau. 

RGoB (2017). Population and Housing Census 2017 (National Report). National Statistics Bureau

Sachs, J. (2006). The End of Poverty: Economic Possibilities for Our Time. Penguin Books.

Sen, A. (2000). Development as Freedom. Oxford University Press. 

UNDP (2012). Innovative Financing for Development: A New Model for Development Finance? Discussion Paper. 

Date: June 2022