Syllabus, Fall 2016

John F. Kennedy School of Government

Harvard University

ECONOMIC DEVELOPMENT: THEORY, EVIDENCE AND POLICY DESIGN

PED 101

Class in Fall 2016: Monday & Wednesday 8:45-10:00am, L140

Fall Review sessions: Friday 1:15-2:30pm and 2:45-4:00pm, LAND

First day of class is Wednesday, 31st August 2016

Professor Rohini Pande

Rubenstein 318

Office hours: Mon. 10:30am-12:30pm

(sign up via website)

Assistant: Eve Margolis

Office: Rubenstein 310G

Email: Eve_Margolis@hks.harvard.edu

Professor Dani Rodrik

Rubenstein 315

Office hours: Mon. 10:30am-12:30pm

(sign up on sheet outside office)

Assistant: Jessica De Simone

Office: Rubenstein 110A

Email: Jessica_De_Simone@hks.harvard.edu

COURSE INFORMATION

PED-101 is a semester-long course that evaluates theories of economic (under)development and

scrutinizes empirical evidence in order to understand key features of the development process across

countries. To do so, the course will utilize analytical frameworks, grounded in economic theory, that

examine the determinants of factor accumulation by individuals, firms and societies. Drawing on

empirical evidence on individual and societal behavior, we will evaluate the relevance of these

frameworks for diagnosing root causes of economic development. The course has three broad sections:

(i) Analytical frameworks for understanding proximate determinants of economic growth and factor

accumulation; (ii) Individual determinants and returns to investment in human capital (health and

education), financial capital (credit markets, savings behavior) and the role of behavioral economics,

culture and governance systems in affecting individual investments; and (iii) resource misallocation,

learning and coordination and their impacts on productivity; the role of industrialization and growth

diagnostics. In the Spring, PED 102 will use these frameworks to examine the design of development

policies.

Teaching fellow: Office Hours:

Raissa Fabregas rfabregas@g.harvard.edu Friday 4:10-6:10

Course assistants:

Martina Trepat martina_trepat@hks17.harvard.edu

Regina Legarreta regina_legarreta_rivero@hks17.harvard.edu

Sebastian Serra sebastian_serra@hks16.harvard.edu

COURSE REQUIREMENTS AND GRADING

General requirements

Students are required to attend two lectures and one class section each week. Sections will review

material covered in lecture, cover complementary material, and provide a forum to debate and discuss

questions about the material with fellow students. Students are expected to have read the required

readings before class, as lectures and class discussions will draw heavily on their key ideas and results.

Grading rubric

The course grade will be assigned based on the following components:

Seven short reading responses (7%)

Three assignments (33%)

Midterm (20%)

Final (40%)

Assignments and exams

The assignments and exams will test understanding of concepts taught in lectures and review sections,

and the ability to apply these insights to policy situations. Exam material will be taken from both the

lecture and review sections. We will have a case assignment and two joint assignments with other

required MPA/ID courses – one joint with API-209 Advanced Quantitative Methods I and one joint with

API-109 Advanced Microeconomic Analysis I. Assignments are to be submitted in the (physical)

dropbox before the first class of the day (ie. 10:10 am on Tu/Th and 8:40 am on M/W). Non-MPA/ID

students need not be enrolled in both classes. The joint assignments can be done as stand-alone PED-

101 assignments. Assignments will be returned via mail folders in the MPA/ID office area.

At seven regularly spaced intervals during the semester students will be required to provide short

responses to questions based on identified readings and lecture content. Responses will require students

to think critically about the reading and will be graded on a 0, check, check+ scale. Short responses are

to be submitted through the CANVAS system on Fridays by 5 pm on the dates indicated below.

READING LIST INFORMATION

The reading list below indicates the URLs for those papers that can be downloaded from the internet.

The majority of the papers and articles for this course are available online and are easily accessible

through these links. If the links become broken then you can find the articles by searching Harvard

library’s E-Journals using the following link: http://sfx.hul.harvard.edu/sfx_local/az/, which can also be

reached by the following steps: http://www.harvard.edu/ “Resources & Offices” “Library and

Academic Resources” “Find E-Journals”. Type in the journal name and select a database that has

issues for the year of the article. Each database is set up differently, but the citation will have all the

information necessary to obtain the article.

All further reading that is not available online will be placed on reserve in the HKS library. Please

check the class page frequently for announcements and other information.

ELIGIBILITY

The class is a core requirement for students in the MPA/ID program. The course is cross-listed at FAS

as Ec2326. Non MPA/ID students will be admitted only with the permission of the instructor. Students

are expected to have reasonable facility with multivariable calculus.

ACADEMIC INTEGRITY

Students are encouraged to work together and discuss class material and assignments. What is important

is the eventual understanding of material achieved, and less about how that is achieved. Any exam,

paper or assignment you submit is presumed to be your own original work, so if you do – as you will –

use words or ideas written by other people, please make sure to cite these appropriately, and to indicate

other students with whom you have collaborated. More information about Harvard’s policies on

academic integrity may be found in the Student Handbook.

IMPORTANT DATES AND COURSE STRUCTURE

Day Date Topic Professor

1 Wed Aug 31 Course Introduction Pande

2 Fri Sept 2 The evolution of thought on poverty reduction, development

and growth Pande/Rodrik

Analytical Frameworks for Development

Mon Sept 5 No Class- Labor Day

3 Wed Sept 7 Economic growth and its proximate determinants: Growth

Accounting Rodrik

Fri Sept 9 Round #1 – Send in your short response

4 Mon Sept 12 Productivity Growth: The Industrial Revolution and its Spread

Rodrik

5 Wed Sept 14 Economic Exchange, Trade and Efficiency Pande

Fri Sept 16 Round #2 – Send in your short response

6 Mon Sept 19 Resource (Mis)Allocation and Household Productivity Pande

Applying the Framework: Endowments, Investments and the Production Function

7 Wed Sept 21 Human Capital: Health- Poverty Trap Application to

Nutrition and Productivity Pande

Fri Sept 23 Round #3 – Send in your short response

8 Mon Sept 26 Human Capital: Health Returns and Constraints on

Investments. Introduction to Education Pande

9 Wed Sept 28

Human Capital: Returns to Education (Micro and Macro) and

Constraints on Accumulation

ASSIGNMENT #1 DUE

Pande

10 Mon Oct 3

Guest Lecture: Insights on Human Capital literature

Prof.Michael Kremer

Kremer/Pande

Wed Oct 5 MIDTERM

Mon Oct 10 No class – Columbus day

11 Wed Oct 12 Financial Capital: Returns to Capital and Financial Access Pande

12 Mon Oct 17 Financial Capital: Savings Accumulation Pande

Applying the Framework: Insights from behavioral economics, Culture and Governance Structures

Day Date Topic Professor

13 Wed Oct 19 Behavioral Insights for individual decision-making Pande

Fri Oct 21 Round #4 – Send in your short response

14 Mon Oct 24 Culture and Norms: An application to Gender Pande

15 Wed Oct 26 Governance and Individual Investments: Public Sector Pande

16 Mon Oct 31 Governance and Individual Investments: Private Sector

ASSIGNMENT #2 (joint with API-109) due Pande

Applying the Framework: Allocative efficiency and TFP

17 Wed Nov 2 Productivity Growth: Misallocation Rodrik

Fri Nov 4 Round #5 – Send in your short response

18 Mon Nov 7 Productivity Growth: Learning Rodrik

19 Wed Nov 9 Productivity Growth: Coordination Failures Rodrik

20 Mon Nov 14 Industrialization and Industrial Policy Rodrik

Tue Nov 15 ASSIGNMENT #3 (joint with API-209) due

21 Wed Nov 16 Industrialization and Climate Change Policy Pande

Fri Nov 18 Round #6 – Send in your short response

22 Mon Nov 21 Globalization and Economic development Rodrik

Wed Nov 23 No class

23 Mon Nov 28 Strategies of Economic Reform Rodrik

24 Wed Nov 30 Wrap up discussion Pande/Rodrik

Fri Dec 2 Round #7 – Send in your short response

Fri Dec 9

(3 – 6pm) FINAL EXAM

Readings

Required readings are marked with a star (*); recommended readings are not starred.

Most readings are available online (by clicking on the title). Readings not available online can be found

on reserve at the HKS library. See above description for more detailed instructions.

COURSE OUTLINE AND READINGS

A. Course Introduction

i. Course introduction (August 31, RP)

No readings

ii. The evolution of thought on poverty reduction, development and growth (September 2, DR/RP)

*Lindauer, David and Lant Pritchett. 2002.“What's the Big Idea?: The Third Generation of Policies

for Economic Growth”, Economía, 3(1):1-39.

*Ravallion, Martin. “Lessons from A History of thought on Poverty”, VoxEU.org, 13 August 2013

B. Analytical Frameworks for Development

i. Economic Growth and its proximate determinants: Growth Accounting (September 7, DR)

*Conference Board, Total Economy Database, Growth Accounting and Total Factor Productivity,

1990-2014. This is a database. Look at and understand the growth decompositions for four countries

that interest you.

*Caselli, Francesco. 2005. “Accounting for Income Differences Across Countries,” chapter 9 in the

Handbook of Economic Growth, Vol. 1A. P. Aghion and S. Durlauf, eds., North Holland. (On

Reserve)

Jones, Charles I. 2013. Introduction to Economic Growth (third edition). W.W. Norton, chaps. 1, 2,

3 (On Reserve)

Bosworth, Barry and Susan M. Collins. 2003. “The Empirics of Growth: An Update,” Brookings

Papers on Economic Activity, issue 2: 113-206.

Weil, David. 2007. “Accounting for the Effect of Health on Economic Growth,” Quarterly Journal of

Economics, 122(3): 1265-1306.

Mankiw, N. Gregory, David Romer, and David N. Weil. 1992. “A Contribution to the Empirics of

Economic Growth,” Quarterly Journal of Economics, 107(2): 407-437.

Hall, Robert E. and Charles I. Jones. 1999. “Why Do Some Countries Produce So Much More

Output Per Worker Than Others?” Quarterly Journal of Economics 114(1): 83-116.

Hsieh, Chang-Tai and Peter Klenow. 2007. “Relative Prices and Relative Prosperity,” American

Economic Review, 97(3): 562-585.

Clemens, Michael, Claudio Montenegro and Lant Pritchett. “The Place Premium: Wage Differences

for Identical Workers Across the US Border.” Center for Global Development Working Paper #148.

ii. Productivity Growth: The Industrial Revolution and Its Spread (September 12, DR)

*Allen, Robert C., Global Economic History: A Very Short Introduction, Oxford University Press,

2011, chapter 3, pp, 27-39.

* Mokyr, Joel, “The European Enlightenment, the Industrial Revolution, and Modern Economic

Growth,” European University Institute, Florence, 2007.

*Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2002. “The Rise of Europe:

Institutional Change and Economic Growth,” American Economic Review, 95(3): 546-579.

Mokyr, Joel. 1999. “Editor's Introduction: The New Economic History and the Industrial

Revolution,” in Joel Mokyr, ed., The British Industrial Revolution: an Economic Perspective.

Boulder: Westview Press, 2nd ed., pp. 1-127. (On Reserve)

Clark, Gregory. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton

University Press, chaps. 10-13. (On Reserve)

Galor, Oded and Andrew Mountford. 2008. “Trading Population for Productivity: Theory and

Evidence,” Review of Economic Studies, 75(4): 1143-1179.

Engerman, Stanley L. and Kenneth L. Sokoloff. 1997. “Factor Endowments, Institutions and

Differential Paths of Growth among New World Economies: A View from Economic Historians of

the United States,” in Stephen Huber, ed., How Latin America Fell Behind. Stanford: Stanford

University Press, and NBER Working Papers Series on Historical Factors in Long-Run Growth, No.

66, December 1994.

North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance. New York:

Cambridge University Press. (On Reserve)

iii. Economic Exchange, Trade and Efficiency (September 14, RP)

* Greif, Avner. 2000. “The Fundamental Problem of Exchange,” Review of European Economic

History, 4: 251-84.

* Casson, Mark and John S. Lee. 2011. “The Origin and Development of Markets: A Business

History Perspective.” Business History Review, 85(1): 9-37.

Greif, Avner and Guido Tabellini. 2010. “Cultural and institutional bifurcations: China and Europe

compared,” American Economic Review, Papers and Proceedings, 100: 135-140.

Stiglitz, Joseph E. 1989. “Markets, market failures, and development,” The American Economic

Review, 79(2): 197-203.

Greif, Avner. 2006. “The Birth of Impersonal Exchange,” Journal of Economic Perspectives, 20(2):

221-236.

Greif, Avner. 1992. “Intuitions and International Trade: Lessons from the Commercial Revolution.”

American Economic Review, 82(2): 128-133.

Greif, Avner. 1989. “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi

Traders.” Journal of Economic History, 49(4): 857-82.

Greif, Avner and Guido Tabellini. 2012. “The Clan and the City: Sustaining Cooperation in China

and Europe,” Working paper.

Grief, Avner. 2008. “Coercion and Exchange. How Did Markets Evolve?” Working paper.

Polanyi, Karl. 1944. The Great Transformation, Beacon Press, Boston, MA.

iv. Resource (Mis)Allocation and Household Productivity (September 19, RP)

*Bardhan, Pranab and Chris Udry. 1999. “Household Economics,” chapter 2 in Development

Microeconomics. Oxford University Press. 8-18

Productivity Impacts

*Goldstein, Markus and Chris Udry. 2008. “The Profits of Power: Land Rights and Agricultural

Investment in Ghana,” Journal of Political Economy, 116(6): 981-1022.

Udry, Christopher. 1996. “Gender, Agricultural Production, and the Theory of the Household,”

Journal of Political Economy, 104(5): 1010-1046.

Investment Impacts

*Qian, Nancy. 2008. “Missing Women and the Price of Tea in China: The Effect of Sex-specific

Earnings on Sex Imbalance,” Quarterly Journal of Economics, 123(3): 1251-1285.

Lundberg, Shelly J., Robert A. Pollak, and Terence J. Wales. 1996. “Do Husbands and Wives Pool

their Resources? Evidence from the United Kingdom Child Benefit,” Journal of Human Resources,

32(4): 463-480.

C. Applying the Framework: Endowments, Investments and the Production Function

i. Human Capital: Health (September 21 & 26, RP)

Sept. 21: Health-Poverty Trap Application to Nutrition and Productivity

*Ray, Debraj (1998) “Development Economics" Princeton, NJ: Princeton University Press, 272- 279,

489-504. (On Reserve)

*Schofield, Heather (2014) “The Economic Costs of Low Caloric Intake: Evidence from India”

Working Paper.

Jensen, Robert and Nolan Miller (2011). “Do Consumer Price Subsidies Really Improve Nutrition?”

Review of Economics and Statistics, 93(4):1205-1223.

Subramanian, Shankar and Angus Deaton. 1996. The Demand for Food and Calories, Journal of

Political Economy, 104(1):133-62.

Bleakley, Hoyt. 2010. Health, Human Capital, and Development, Annual Reviews of Economics, 2:

283-310.

Sept. 26: Health Returns and Constraints on Investments

*Kremer, Michael and Edward Miguel. 2004. “Worms: Identifying Impacts on Education and Health

in the Presence of Treatment Externalities,” Econometrica, 72(1): 159-217.

*Das, Jishnu, Jeffrey Hammer and Kenneth Leonard. 2008. “The Quality of Medical Advice in Low-

Income Countries,” Journal of Economic Perspectives, 22(2): 93-114.

Dupas, P., & Miguel, E. 2016. Impacts and Determinants of Health Levels in Low-Income

Countries. Working Paper. National Bureau of Economic Research.

Kremer, Michael and Edward Miguel. 2007. The Illusion of Sustainability, Quarterly Journal of

Economics, 122(3): 1007-1065.

Cohen, Jessica and Pascaline Dupas. 2010. Free Distribution or Cost-Sharing? Evidence from a

Randomized Malaria Prevention Experiment, Quarterly Journal of Economics, 125(1), pp.1-45.

Dupas, Pascaline. 2011. “Health Behavior in Developing Countries,” Annual Review of Economics,

3: 425-449.

Almond, Douglas. 2006. Is the 1918 Influenza Pandemic Over? Long-term Effects of In Utero

Influenza Exposure in the Post-1940 U.S. Population, Journal of Political Economy, 114(4):672-

712.

ii. Human Capital: Education/Skills

Sept. 26/28: Returns to Education ( Micro and Macro) and Constraints on Accumulation (RP)

*Pritchett, Lant. 2006. “Does Learning to Add up Add up: The Returns to Schooling in Aggregate

Data.” Handbook of the Economics of Education.

Duflo, Indonesia School Paper AER

*Jensen, Robert. 2010. “The (Perceived) Return to Education and the Demand for Schooling”,

Quarterly Journal of Economics, 125(2): 515-548.

Montenegro, Claudio and Harry Patrinos, “Returns to Schooling Around the World” Background

paper for the WDR 2013.

Hanushek, Eric, Guido Schwerdt, Simon Wiederhold & Ludger Woessmann. 2013. "Returns to

Skills around the World: Evidence from PIAAC”NBER working paper 19762.

Acemoglu, Daron and Joshua Angrist. 2001. “How Large are Human Capital Externalities?

Evidence from Compulsory Schooling Laws,” NBER Macroeconomics Annual 2000, 15:9-74.

Jensen, Robert. 2012. "Do Labor Market Opportunities Affect Young Women's Work and Family

Decisions? Experimental Evidence from India," Quarterly Journal of Economics, 127(2): 753-792.

Jayachandran, Seema and A. Lleras-Muney. 2009. “Life Expectancy and Human Capital

Investments: Evidence from Maternal Mortality Declines,” Quarterly Journal of Economics, 124(1):

349-397.

*Baird, Sarah, Craig McIntosh, and Berk Ozler. 2011. Cash or Condition? Evidence from a Cash

Transfer Experiment, Quarterly Journal of Economics, 2011, Vol. 126(4), pp. 1709-1753.

Jensen, Robert & Emily Oster. 2009. “The Power of TV: Cable Television and Women’s Status in

India,” Quarterly Journal of Economics, 124(3): 1057-1094.

Oct. 3: Guest Lecture: Michael Kremer

iii. Returns to Capital and Financial Access, Savings Constraints

Oct 12: Financial Capital: Returns to Capital and Financial Access (RP)

*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):

1329-1372.

*Burgess, Robin and Rohini Pande. 2005. “Do Rural Banks Matter? Evidence from the Indian Social

Banking Experiment,” American Economic Review, 95(3): 780-795.

Duflo, Esther, Michael Kremer, and Jonathan Robinson. 2008. “How High Are Rates of Return to

Fertilizer? Evidence from Field Experiments in Kenya”, American Economic Review P&P, Volume

98(2): 482-488.

Banerjee, Abhijit and Esther Duflo. 2014. Do firms want to borrow more? Testing credit constraints

using a directed lending program. The Review of Economic Studies, 81(2), 572-607.

Khwaja, Asim and Atif Mian. 2008. "Tracing the Impact of Bank Liquidity Shocks: Evidence from

an Emerging Market." American Economic Review, 98(4): 1413-42.

Udry, Christopher and Santosh Anagol. 2006. “The Return to Capital in Ghana,” American

Economic Review, 96(2): 388-393.

Paravisini, Daniel. 2008. “Local Bank Financial Constraints and Firm Access to External Finance”,

Journal of Finance, 63(5): 2161-2193.

Oct. 17: Savings Accumulation (RP)

*Ashraf, Nava, Dean Karlan and Wesley Yin. 2006. “Tying Odysseus to the Mast: Evidence from a

Commitment Savings Product in the Philippines”, Quarterly Journal of Economics 121(2): 635-672.

*Dupas, Pascaline, and Jonathan Robinson. 2013. "Why Don't the Poor Save More? Evidence from

Health Savings Experiments." American Economic Review, 103(4): 1138-71.

Miller, Margaret, Julia Reichelstein,,Christian Salas & Bilal Zia (2014), "Can You Help Someone

Become Financially Capable? A Meta-Analysis of the Literature," World Bank Policy Research

Working Paper No. 6745, January 2014

Schaner, Simone. 2015. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and

Inefficient Strategic Savings." American Economic Journal: Applied Economics, 7(2): 135-74.

iv. Behavioral insights in development economics (October 19, RP)

*Berg, G., & Zia, B. 2013. Harnessing emotional connections to improve financial decisions:

evaluating the impact of financial education in mainstream media. World Bank Policy Research

Working Paper, (6407).

*Mullainathan, Sendhil (2006) “Development Economics Through the Lens of Psychology,”

Proceedings of the Annual Bank Conference on Development Economics

Allcott, Hunt, and Todd Rogers. 2014. "The Short-Run and Long-Run Effects of Behavioral

Interventions: Experimental Evidence from Energy Conservation." American Economic Review,

104(10): 3003-37.

Carroll, Gabriel D., James J. Choi, David Laibson, & Brigitte C. Madrian & Andrew Metrick,

(2009). "Optimal Defaults and Active Decisions," The Quarterly Journal of Economics, vol. 124(4),

pp 1639-1674

Datta, Saugato and Sendhil Mullainathan (2012) "Behavioral Design: A New Approach to

Development Policy." CGD Policy Paper 016.

Duflo, Esther, Michael Kremer, and Jonathan Robinson (2011) “Nudging Farmers to Use Fertilizer:

Evidence from Kenya” American Economic Review 101 (6): 2350-2390

Kaur, Supreet, Kremer, M., & Mullainathan, S. (2015). Self-control at work. Journal of Political

Economy, 123(6), 1227-1277.

Kremer, Michael, Edward Miguel, Sendhil Mullainathan, Clair Null, & Alix Peterson Zwane (2011).

"Social engineering: Evidence from a suite of take-up experiments in Kenya" Unpublished Working

Paper.

Madestam, Andreas, Daniel Shoag, Stan Veuger, and David Yanagizawa-Drott (2013) “Do Political

Protests Matter? Evidence from the Tea Party Movement” Quarterly Journal of Economics,

forthcoming

Shah, Anuj, Sendhil Mullainathan, Eldar Shafir, (2012) "Some Consequences of Having Too Little",

Science, 338(6107):682-685

Zwane, Alix Peterson (2014), “Implications of Scarcity” Science

v. Culture and Norms with an application to Gender (October 24, RP)

*Beaman, Lori, Raghabendra Chattopadhyay, Esther Duflo, Rohini Pande and Petia Topalova,

“Powerful Women: Does Exposure Reduce Bias?” Quarterly Journal of Economics, Vol. 124(4):

1497-1540.

Alberto Alesina, Paula Guiliano and Nathan Nunn (2013), “On the Origins of Gender Roles: Women

and the Plough”, Quarterly Journal of Economics, Vol 128(2)

Jayachandran, Seema. 2014. The roots of gender inequality in developing countries. National Bureau

of Economic Research, 20380.

Beaman, Lori, Esther Duflo Rohini Pande and Petia Topalova “Female Leadership Raises

Aspirations and Educational Attainment for Girls: A Policy Experiment in India,” Science Magazine,

Vol. 335 no. 6068, February 2012

Ashraf, Nava (2009). “Spousal Control and Intra-household Decision Making: An Experimental

Study in the Philippines.” American Economic Review 99(4), 1245–1277

Jayachandran, Seema and Rohini Pande .2015. “Why are Indian Children so Short?” NBER

Working Paper 21036.

(*oped version: http://www.nytimes.com/2014/08/10/opinion/sunday/the-youngest-are-

hungriest.html?_r=1&gwh=55727F844132ECA6B44CBD18F2CCF962&gwt=pay&assetType=opin

ion)

D. Applying the Framework: Allocative efficiency and TFP

ii. Governance and Individual Investments: Public Sector (October 26, RP)

*Ben Olken and Rohini Pande “Corruption in Developing Countries” Annual Review of Economics,

July 2012, Vol. 4: pp. 479-509.

Burgess, Robin, Remi Jedwab, Edward Miguel, Gerard Padro i Miquel, and Ameet Morjaria “The

Value of Democracy: Evidence from Road Building in Kenya” (with) American Economic Review

105(6): 2015.

Burgess, Robin, Matthew Hansen, Benjamin Olken, Peter Potapov and Stefanie Sieber “The Political

Economy of Deforestation in the Tropics” (with) Quarterly Journal of Economics 127 (4), 2012.

Fisman, R (2001), “Estimating the value of political connections”, American Economic Review

91(4), 1095-1102.

iii. Governance and Individual Investments: Private Sector (October 31, RP)

*Bloom, Nicholas, Benn Eifert, Aprajit Mahajan, David Mckenzie, John Roberts.2013. “Does

management matter: evidence from India”. Quarterly Journal of Economics, 128(1):1-51.

* Duflo, Esther, Michael Greenstone, Rohini Pande, and Nicholas Ryan. 2013. Truth Telling by

Third-party Auditors and the Response of Polluting Firms: Experiment Evidence from India.

Quarterly Journal of Economics, 128(4): 1499-1545.

* HKS Case: Fighting Pollution with Data: Environmental Audits and the Gujarat Pollution Control

Board. Case Number 2054.0. Available on course website.

Raymond Fisman and Yongxiang Wang. 2016. The Mortality Cost of Political Connections, Review

of Economic Studies.

Bertrand, Marianne, Simon Johnson, Krislert Samphantharak and Antoinette Schoar "Mixing Family

with Business: A Study of Thai Business Groups and the Families Behind Them" Journal of

Financial Economics, June 2008, 88(3), pp. 466-498

iv. Productivity Growth: Misallocation (November 2, DR)

* Hsieh, Chang-Tai and Peter J. Klenow. 2009. “Misallocation and Manufacturing TFP in China and

India,” Quarterly Journal of Economics, 124 (4): 1403-1448

*McMillan, Margaret, and Dani Rodrik, “Globalization, Structural Change, and Economic Growth”

in M. Bachetta and M. Jansen, eds., Making Globalization Socially Sustainable, International Labor

Organization and World Trade Organization, Geneva, 2011.

Vries, G. J. D., Timmer, M. P. & Vries, K. D., “Structural transformation in Africa: Static gains,

dynamic losses,” Groningen: GGDC, 2013.

Banerjee, Abhijit and Esther Duflo, “Growth Theory Through the Lens of Development

Economics,” chapter 7 in the Handbook of Economic Growth Vol. 1A, P. Aghion and S. Durlauf,

eds., North Holland, 2005. (On Reserve)

Bartelsman, Eric, John Haltiwanger, and Stefano Scarpetta. 2013."Cross Country Differences in

Productivity: The Role of Allocation and Selection” American Economic Review, 103(1): 305-334

Imbs, Jean, and Romain Wacziarg, “Stages of Diversification,” American Economic Review, 93(1),

March 2003, 63-86.

v. Productivity Growth: Learning (November 7, DR)

*Matsuyama, Kiminori, “Agricultural Productivity, Comparative Advantage, and Economic

Growth,” Journal of Economic Theory, December 1992, 317-334.

*Hausmann, Ricardo and Dani Rodrik. 2003. “Economic Development as Self-Discovery,” Journal

of Development Economics, 72(2): 603-633.

Rodrik, Dani. 2012. “Unconditional Convergence in Manufacturing,” Quarterly Journal of

Economics, February 2013.

Acemoglu, Daron, Philippe Aghion, and Fabrizio Zilibotti. 2002. “Distance to Frontier, Selection,

and Economic Growth,” NBER Working Paper No. 9066.

Aghion, Philippe, Robin Burgess, Stephen Redding, and Fabrizio Zilibotti. 2008. “The Unequal

Effects of Liberalization: Evidence from Dismantling the License Raj in India,” American Economic

Review, 98(4): 1397-1412.

Hausmann, Ricardo, Jason Hwang, and Dani Rodrik. 2007. “What You Export Matters,” Journal of

Economic Growth, 12: 1-25.

vi. Productivity Growth: Coordination Failures (November 9, DR)

*Murphy, Kevin M., Andrei Shleifer, and Robert W. Vishny. 1989. “Industrialization and the Big

Push,” Journal of Political Economy, 97(5): 1003-1026.

*Jeremy R. Magruder. 2013. “Can Minimum Wages Cause a Big Push? Evidence from Indonesia”

Journal of Development Economics, 100(1) pp 48-62.

Rodrik, Dani.1996. “Coordination Failures and Government Policy: A Model with Applications to

East Asia and Eastern Europe," Journal of International Economics, 40(1-2):1-22.

Rosenstein-Rodan, Paul N. 1943. “Problems of Industrialization of Eastern and South-Eastern

Europe,” Economic Journal, 53(210/211): 202-211.

Hoff, Karla and Joseph Stiglitz. 2001. “Modern Economic Theory and Development,” in G.M.

Meier and J.E. Stiglitz, eds., Frontiers of Development Economics. New York: Oxford University

Press, pp. 389-459.

vii. Industrialization and Industrial Policy (November 14, DR)

*Rodrik, Dani, “Industrial Policy for the Twenty-First Century,” in One Economics, Many Recipes,

Princeton University Press, Princeton, 2007, 99-152.

* Cimoli, Mario, G. Dosi, R. Nelson, and J.E. Stiglitz, “Institutions and Policies Shaping Industrial

Development: An Introductory Note,” chap. 2 in Cimoli, Dosi, and Stiglitz, eds., Industrial Policy

and Development, Oxford University Press, 2009, pp. 19-38. (On Course Website)

Rodrik, Dani, “Normalizing Industrial Policy,” Commission on Growth and Development Working

Paper No. 3, Washington, DC, 2008.

Hausmann, Ricardo, Dani Rodrik, and Charles Sabel, “Reconfiguring Industrial Policy: A

Framework with Applications to South Africa,” HKS Working Paper, 2008.

Charles Sabel, “Self-Discovery as a Coordination Problem,” chap. 1 in C. Sabel et al., eds, Export

Pioneers in Latin America, Inter-American Development Bank, 2012, pp. 1-46.

Inter-American Development Bank, Rethinking Productive Development: Sound Policies and

Institutions for Economic Transformation, Washington, D.C. 2014.

viii. Industrialization and Climate Change Policy (November 16, RP)

* Stavins, Robert N. “The Problem of the Commons: Still Unsettled After 100 Years.” American

Economic Review 101 (2011): 81–108.

*Dell, Melissa, Benjamin F. Jones, and Benjamin A. Olken. 2014. What Do We Learn from the

Weather? The New Climate-Economy Literature. Journal of Economic Literature, 52(3): 740-798.

Greenstone, Michael, Janhavi Nilekani, Rohini Pande, Nicholas Ryan, Anant Sudarshan, Anish

Sugathan. 2015. Lower Pollution, Longer Lives: Life Expectancy Gains if India Reduced Particulate

Matter Pollution. Economic and Political Weekly, L(8): 40-46. (On Course Website)

ix. Globalization and Economic Development (November 21, DR)

* Arvind Subramanian and Dani Rodrik, “Why Did Financial Globalization Disappoint?” IMF Staff

Papers, Volume 56, Number 1, March 2009, 112-138.

* Francisco Rodríguez and Dani Rodrik, "Trade Policy and Economic Growth: A Skeptic's Guide to

the Cross-National Evidence," Macroeconomics Annual 2000, eds. Ben Bernanke and Kenneth S.

Rogoff, MIT Press for NBER, Cambridge, MA, 2001.

Paul Romer, “New goods, old theory, and the welfare costs of trade restrictions,” Journal of

Development Economics, Volume 43, Issue 1, February 1994, Pages 5–38.

Dani Rodrik, “The Real Exchange Rate and Economic Growth,” Brookings Papers on Economic

Activity, 2008:2.

Dani Rodrik, The Global Governance of Trade as if Development Really Mattered, United Nations

Development Program, New York, 2001.

x. Strategies of Economic Reform (November 28, DR)

*Hausmann, Ricardo, D. Rodrik, A. Velasco, “Growth Diagnostics,” in J. Stiglitz and N. Serra, eds.,

The Washington Consensus Reconsidered: Towards a New Global Governance, Oxford University

Press, New York, 2008.

* Hausmann, Ricardo, Bailey Klinger, and Rodrigo Wagner, “Doing Growth Diagnostics in Practice:

A 'Mindbook',” Harvard CID Working Paper 177, September 2008.

Dixit, Avinash, “Evaluating Recipes for Economic Success,” Princeton University, March 2006.

Rodrik, Dani, “Understanding South Africa’s Economic Puzzles,” Economics of Transition, vol. 16,

no. 4, 2008, 769-797.

E. Wrap Up Discussion (November, 30)

Rodrik, Dani. 2008. “The New Development Economics: We Shall Experiment, but How Shall we

Learn?”

Pande, Rohini. 2016 “RCTs and the Politics of Development: How the questions we decide to ask

affect what we know and how we act”