Description

This module introduces students to the exciting and challenging subject of the economic problems facing poor third world countries. The role of economic analysis for understanding these problems, and as a guide to policy, is examined. The topics and issues covered include: the development gap in the world economy and the measurement of poverty; characteristics of underdevelopment and structural change; models of the growth and development process; the role of agriculture and surplus labour in the development process; industrialisation; dualism and vicious circles of poverty; the financing of development from domestic and international sources; debt problems; and trade and development.

LECTURE COURSE OUTLINE AND SUGGESTED READINGS

Divisions in the World Economy; the Meaning of Development, and the Measurement of Poverty

Thirlwall, chapts 1, 2
Todaro, chapts 1, 2, 5
Gillis et alia, chapts 1, 4
A. Sen, Development:  Which Way Now?, Economic Journal, December 1983
Oxford Review of Economic Policy, Spring 2004
S.Chen and M. Ravallion, How Have the World’s Poorest Fared Since the Early 1980s?, The World Bank Research Observor, Fall
R. Wade, Is Globalisation Reducing Poverty and Inequality, World Development, April 2004
World Development Report 2000/2001: Attacking Poverty (World Bank)
J. Sachs, The End of Poverty, (Penguin 2005)
B. Milanovic, Worlds Apart: Measuring International and Global Inequality     (Princeton 2005)
P. Collier, The Bottom Billion, (2007).

The Characteristics of Underdevelopment and the Process of Structural Change

Thirlwall, chapt 3
Todaro, chapt 2
Gillis et alia, chapt 2
W.W. Rostow, The Stages of Economic Growth (1960)
C. Kenny and D. Williams, What do we know about Economic Growth, World Development, January 2001
L. Pritchett, Understanding Patterns of Growth, World Bank Economic Review, May 2000

The Role of Agriculture in Economic Development; Food Production and Malnutrition
           
Thirlwall, chapt 5
Todaro, chapt 9
Gillis et alia, chapt 16
Meier, chapts 7, 8
S. Ghatak and K. Ingersent, Agriculture and Economic Development (1984)
Sen, Poverty and Famines:  An Essay in Entitlement and Deprivation (1984)
J. Dreze and A. Sen, Hunger and Public Action (1989)
J. Behrman, The Economic Rationale for Investing in Nutrition in Developing
Countries, World Development, November 1993

Economic Development with Unlimited Supplies of Labour:  Disguised Unemployment; Open Unemployment; Rural-Urban Migration
           
Thirlwall, chapt 5
Todaro, chapt  7
Gillis et alia, chapt 9
Meier, chapt 3
Lewis, Economic Development with Unlimited Supplies of Labour, Manchester School, May 1954
The Manchester School, Special Issue, Vol.72 No.6, December 2004
M. Godfrey, Global Unemployment:  The New Challenge to Economic Theory
(Harvester Press 1981)
Sen, Employment, Technology and Development (Oxford, 1975)

Industrialisation and Economic Development

Gillis et alia, chapt 18
Meier, chapt 7
T. Hewitt et alia, Industrialisation and Development (1992)
A.P. Thirlwall, Symposium on Kaldor’s Growth Laws, Journal of Post Keynesian
Economics, Spring 1983
J.D. Hansen and J. Zhang, A Kaldorian Approach to Regional Economic Growth in
China, Applied Economics, June 1996
A.P. Thirlwall and Heather Wells, Testing Kaldor’s Growth Laws Across the Countries of Africa, African Development Review, December 2003                                          

Centre-Periphery Models of Growth and Development:  Virtuous and Vicious Circles

Thirlwall, chapt 7
G. Myrdal, Economic Theory and Underdeveloped Regions (1957)
Hirschman, Strategy of Economic Development (1958)
J.K. Galbraith, The Nature of Mass Poverty (1980)
Emmanuel, Unequal Exchange:  A Study of the Imperialism of Trade (1972)
G. Frank, Capitalism and Underdevelopment in Latin America (1967)
P. Krugman, ‘The Role of Geography in Development’ in B. Pleskovic and J. Stiglitz (eds), Annual World Bank Conference on Development Economics 1998 (Washington: World Bank).

Financing Development from Domestic Resources

Thirlwall, chapt 14
Todaro, chapt 16
Gillis et alia, chapt 14
M. Fry, Money, Interest Rates and Banking in Economic Development, (1995)       especially chapters 2, 3 and 6
S. Ghatak and Sanchez-Fung, Monetary Economics in Developing Countries 2nd Edition, (2007)
H. Gibson and E. Tsakalotos, The Scope and Limits of Financial Liberalisation in Developing Countries:  A Critical Survey, Journal of Development Studies, April 1994
M. Fry, Financial Development:  Theories and Recent Experience, Oxford Review of Economic Policy, No.5, 1989
R. Levine, Financial Development and Economic Growth:  Views and Agenda, Journal of Economic Literature, June 1997

Financing Economic Development from External Sources
           
Thirlwall, chapt 15
Todaro, chapt 15
Gillis et alia, chapt 15
R. Cassen et alia, Does Aid Work?, Oxford, 1986
P. Mosley, Overseas Aid:  Its Defence and Reform, Wheatsheaf Press, 1987
Oxford Review of Economic Policy (Special Issue on Debt), Spring 1986
G. Calvo et alia, Inflows of Capital to Developing Countries in the 1990s, Journal of Economic Perspectives, Vol.10, No.2, 1996
C. Burnside and D. Dollar, Aid, Policies and Growth, American Economic Review, Sept 2000
World Bank, Assessing Aid:  What Works, What Doesn’t and Why?  (Oxford University Press 1998)
S. Bosworth and S. Collins, Capital Flows to Developing Economies:  Implications for Saving and Investment, Brookings Papers on Economic Activity, No.1 1999

International Trade, the Terms of Trade, the Balance of Payments and Development
           
Thirlwall, chapts 16-17
Todaro, chapts 12-14
Gillis et alia, chapts 17, 19, 20
A.P. Thirlwall and P.  Pacheco-Lopez,   Trade  Liberalisation  And  The  Poverty  of
Nations, (Elgar 2008).
J. Stiglitz, Globalisation and its Discontents, (Penguin 2003)
A. Santos Paulino and A.P. Thirlwall, Trade Liberalisation and Economic Performance in Developing Countries, Economic Journal, February 2004 (especially the article by L.A. Winters)
S. Dowrick and J. Golley, Trade Openness and Growth:  Who Benefits?  Oxford Review of Economic Policy, Vol.20, No.1 2004
D. Sapsford and V.N. Balasubramanyam, The Long Run Behaviour of the Relative Price of Primary Commodities:  Statistical Evidence and Policy Implications, World Development, November 1994
P. Cashin and C. McDermott, The Long Run Behaviour of Commodity Prices:  Small Trends and Big Variabilities, IMF Staff Papers, Vol.49, No.2 2002
P. Cashin and C. McDermott, Booms and Slumps in World Commodity Prices, Journal of Development Economics, October 2002
L. Taylor, The Revival of the Liberal Creed – the IMF and the World Bank in a Globalised Economy, World Development, February 1997

Learning outcomes

On completion of this module, you will have

• understood about the divisions in the world economy between rich and poor countries
• understood how these divisions arose and what forces perpetuate them
• understood how important are such factors as agriculture, industry, investment performance, population growth, domestic finance, international finance and trade in explaining the economic performance of nations
• understood what role economics has in understanding why some countries are poor and others rich
• learnt about sources of information on economic development
• written on issues in development economics
• engaged, through seminar presentations, in lively debate on issues facing developing countries
• become a more well-rounded economist

Reading list

Preliminary Reading:

A.P. Thirlwall, Growth and Development (8th ed.), McMillan, 2006.
M. Gillis, et al, Economics of Development,(4th edn.), Morton, 1996
M.P. Todaro and S. Smith, Economic Development in the Thirld World (9th ed.), Pearson Education, 2005.
G. Meier and J. Rauch (eds), Leading Issues in Developing Economics (7th ed.), Oxford University Press, 2000.

Factsheet

Credits	15 [7.5 ECTS]
Level	Honours
Term	(Stage 3) Autumn
Availability
Exclusion
Pre-requisites	EC500 Microeconomics (or EC528 Business Economics) and EC502 Macroeconomics
Assessment	20% coursework, consisting of one class test and one 1500 word essay 80% written examination of 2 hours duration
Contact hours	12 lectures and 6 seminars