This is a nine-month degree in development economics with a strong emphasis on bringing methods of modern economic analysis to economic development theory and policy.
The course seeks to cultivate the analytical and critical skills relevant to economic development, in particular those needed to assess alternative approaches to policy. It provides the rigorous quantitative training that development work now requires, helping you develop the ability to access, process and interpret a variety of data. It aims to provide the research tools and approaches needed for those who wish to proceed to doctoral research in development economics.
The course will prepare you for further academic research or for work as a professional development economist in international agencies, governments or the private sector.
Applicants to this degree who are interested in progressing onto doctoral study are eligible to apply for an ESRC 1+3 Studentship which could provide them with four years of full funding. These studentships, previously only available for UK and EU students, are now also available to non-EU students. See the Fees and Funding page for more information.
Introduction to the MSc in Economics for Development
The course is taught primarily through lectures and classes but includes some student presentations. The quantitative methods course also includes hands-on training in the use of specialist statistical software. Class sizes are small – usually between 5 and 30 students – encouraging active participation and enabling students to learn from each other.
During the course you will be required to complete a number of problem sets as well as writing essays for individual supervisors (the tutorial system). This system is used to build critical and analytical skills, and is particularly beneficial to students from a different background of instruction.
The Course Director for 2023/24 is Professor Christopher Adam.
You will take courses in economic theory (macroeconomics, microeconomics and trade), quantitative methods (ie econometrics) and development economics. The latter consists of a series of at least eight modules covering different topics; students typically follow four or five of the modules offered.
A central component of the course is a 10,000-word dissertation, written on a subject which you choose in consultation with your supervisor and with the agreement of your Course Director.
Microeconomic Theory for Development
This course covers material examined in the Microeconomic Theory paper.
The objective of the course is to provide a graduate-level introduction to the microeconomics of development and a basis for the relevant Development Economics modules. Rather than adhering to a standard textbook treatment of micro theory, the course introduces and builds on some widely used theoretical structures in development economics.
Although exact topics vary from year to year, the first half of the course typically covers topics from producer and consumer theory, risk and uncertainty, and general equilibrium and welfare. The second half of the course normally covers topics from game theory and issues related to information asymmetries. Specific topics covered in the lecture course are:
- Models of firm size and structure
- Models of occupational sorting and selection
- Models of economic geography
- Household models
- Uncertainty and inter-temporal decision making
- Imperfect competition and game theory
- Asymmetric information and contract theory
Macroeconomic Theory for Development
This course covers material examined in the Macroeconomic Theory and International Trade paper.
The objective of the course is to provide an overview of modern open-economy macroeconomics at the graduate level, to show how this body of theory can be adapted to the characteristics of open developing economies, to provide a basis for the relevant Development Economics modules, and to equip students with tools relevant for tackling macroeconomic dissertation topics if chosen.
The principal lecture topics are:
- Long-run growth and short run shocks: an introduction to development macroeconomics
- The small open economy: dynamic models of the current account
- The small open economy: inter-sectoral allocation and real exchange rates
- Overlapping generations model
- Fiscal policy and public debt
- Asset markets and money in the open economy
International Trade Theory for Development
This course covers material examined in the Macroeconomic Theory and International Trade paper.
The objective of the course is to provide an introduction to international trade theory, focussing on the aspects that are most relevant for developing economies. Lectures will cover topics including:
- Comparative advantage and the foundation of classical trade theory
- ‘New’ trade theory: imperfect competition and heterogeneous firms
- Trade policies
Dennis Egger, Margaryta Klymak, Hailemariam Ayalew Tiruneh, Christopher Woodruff
This course covers material examined in the Quantitative Methods paper.
The objective of this course is to provide an introduction to the use of econometric methods in the study of development economics. Students will be encouraged to apply techniques covered in this course in other components of the MSc, including their Dissertation.
Topics covered may include:
- Cross-sectional regression
- Instrumental variable estimation
- Treatment Effects
- Maximum likelihood
- Limited Dependent Variable models
- Panel data analysis
- Dynamic panel data analysis
- Machine learning
A range of development economics modules are offered each year. The following list consists of modules that are likely to be offered in 2023/24. Further modules may be offered and the list updated in Micahelmas 2023.
Agriculture and Development
Hailemariam Ayalew Tiruneh
Smallholder agriculture continues to account for a significant proportion of income and employment in developing countries. Broad-based agricultural productivity growth is one of the main components for structural transformation and poverty reduction. For example, studies show that agricultural growth is up to 3.2 times better at reducing poverty at the one dollar-a-day level than growth in non-agricultural sectors. In this course, we will discuss the key drivers of agricultural growth and their role in rural development.
Applications of Behavioural Economics to the Developing World
This course will examine a range of behaviours that are not traditionally considered in microeconomic analyses. We will explore various psychological and social factors that can affect individual beliefs, preferences, and choices, and how incorporating them can enable the design of effective policies. In particular, we will focus on time preferences, social preferences, psychology of poverty, and beliefs and aspirations. Lectures will focus on learning how to model such behaviours and designing experiments that test for them and/or measure the impact of suitable policy responses.
Environment and Development
Lower-income countries face a dual crisis of climate and environment. South Asia and SubSaharan African countries are among the most vulnerable to climate change. Among all countries in the world, Bangladesh, Pakistan and India rank as the three countries with the worst air quality. The dual crises of climate change and environment will be solved with some combination of policy, behaviour and technology. This module will examine these challenges from the perspective of current literature in economics, focusing on a few selected topics and highlighting the role of institutions and trade.
Firms, Workers and Labour Markets in Developing Countries
More than 700 million people in the world live in extreme poverty. Firms and labour markets enable the poor to use their time and resources to lift themselves out of poverty. Studying them is thus at the heart of understanding development. Most of the world's poor work in microenterprises: how do people use labour and capital to grow these enterprises? What holds back their growth? Why do many people struggle to find wage employment? What can governments do to make labour markets more efficient and inclusive? This module will discuss empirical literature and real-world development initiatives to explore firms and labour markets as avenues to poverty reduction.
On the firm side, we will examine credit and other constraints that may explain why microenterprises fail to grow, whether entrepreneurs are born or made, and to what extent firms are labour constrained. Looking at the broader labour market, we will discuss factors that hold back workers from finding jobs. We will study whether training can increase returns to labor, examine how job search assistance can help youths find jobs, and explore how labour mobility can increase incomes
Gender and Development Economics
This module surveys some of the major discussions in development microeconomics through a gender lens. The module will investigate how institutions, including gender norms, impact the way men and women participate in the formal and informal economies across different developing country contexts. It will explore the ways the household is modelled in economics and some of the implications of these different models when conducting research in development and implementing policies and programs. Additionally, it will look at issues such as livelihood strategies, asset ownership and property rights, risk sharing, asset allocation preferences, migration, poverty, and food and water security. The module will also aim to uncover the different ways gender is applied within microeconomic topics in development and discuss the normative underpinnings of these different applications.
Industrial Development: Change, Policy, and Empirics
Developing nations, with rare exception, try to shape the nature of their economic activity. This is a course on industrial change. We will cover key concepts in this space: structural transformation; industry dynamics and productivity; technological change; investment and credit; industrial and trade policy; and, importantly, labour. The emphasis will be practical and empirical. Students will learn concepts through lens of policy, controversies, and the econometric evidence surrounding these interventions. Thus, students will deepen their real-world understanding of canonical themes in development economics by engaging current, data-driven research
Macroeconomic Policy and Stabilization in Developing Countries
This module is concerned with short-run macroeconomic stabilization in developing countries. In Part I we will examine choices around the exchange rate regime which in turn influence the framework for monetary policy. Part II will be concerned with low-income countries’ experience with stabilization, including an examination of the design of IMF programs.
The principal topics covered are principles of stabilization; exchange rate regimes and monetary frameworks; monetary policy in the small open economy; and macroeconomic models and approaches to stabilization. The lectures will draw on aspects of the macroeconomic theory course.
Microfinance and Cash Transfers
Which interventions help the rural poor to escape poverty, and how do they work? This module will analyse the effects of a range of interventions designed to tackle poverty, including microloans, conditional and unconditional cash transfers, 'targeting the ultra-poor' programs, and savings. We will focus on the use of empirical methods that help us to understand the mechanisms that interventions work through, and will survey results from the recent literature.
Issues covered include: the evidence for the existence of various types of poverty traps; how the design of microloan programs can affect the outcomes of its recipients; whether cash transfers achieve more sustained improvements in outcomes than loans; the role of conditionality in the effects of cash transfer programs; whether combinations of interventions can help the 'ultra-poor' escape poverty; and whether savings and loan products enable lumpy investments or just help individuals to smooth consumption.
Political Economy of Economic Development
Why is good economics not always good politics, specifically in the context of developing countries, where political and economic institutions, and state capacity, might be less than perfect? Virtually all economic policies have distributional implications, and create winners and losers. How do the political pressures that (potential) winners and losers bring to bear on the political process affect the adoption and implementation of economic policy?
The module will consider a number of related issues: the role of political institutions and cultural factors in long-run development; the idea of ‘political failure’; the political economy of economic policy reform; corruption: determinants and consequences, detection and prevention; politically motivated transfers and economic (in)efficiency; violent conflict, state capacity, state failure, and nation (re-)building.
Public Finance in Developing Countries
The ability to collect taxes is essential for the functioning of any state and its ability to provide growth-promoting public goods. Developing countries typically collect between 10% and 20% of GDP in taxes while the average for high-income countries is at 40%. This module will explore why low-income countries tax so little. We will cover some of the key challenges they face such as the presence of weak institutions, the incidence of corruption, and the prevalence of the informal sector. In addition, we will also examine recent empirical evidence on what governments can do to improve their fiscal capacity and strengthen the Social Contract between citizens and the state.
Approximately one third of MSc graduates proceed to doctoral research in economics, usually two to three in Oxford, either immediately or after work experience in the field. Graduates from the MSc have also pursued doctoral study at other leading universities and have gone on to distinguished academic careers, including at top universities around the world.
Beyond academia, significant numbers of course alumni are also now working in the major international financial institutions such as the World Bank, the IMF and the UN organisation, as well as in the UK’s Department for International Development. Many others work in the international NGO sector and for major consultancies.
A number of students on the course are also regularly accepted onto the Overseas Development Institute's Fellowship scheme; in recent years an average of 3-4 students were offered places.
Please refer to the course webpage on the University's Graduate Admissions pages for full information on selection criteria, application deadlines and English language requirements.
Enquiries about the MSc in Economics for Development should be addressed to the Graduate Student Administrator, email@example.com.