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. Coverage is theoretical with applications to development. This course does not attempt to be a complete review of microeconomic theory, but instead it seeks to expose you to the ways in which development economists use theory and models to address problems and improve understanding of development. As such, the course veers towards applied theory rather than pure theory. Instead of repeating the material that you have previously seen related to standard consumer and producer theory, we will teach theoretical techniques by introducing you to some canonical models in the development literature.

Specific topics covered in the lecture course are:

• Household models
• Uncertainty and inter-temporal decision making
• Models of firm size and structure
• Models of occupational sorting and selection
• Imperfect competition and game theory
• Asymmetric information and contract theory

This course covers material examined in the Macroeconomic Theory and International Trade paper.

The objectives of the course are 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, and challenges facing, 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:

• An introduction to development macroeconomics: long-run growth and short run shocks
• The small open economy: dynamic models of the current account and external debt sustainability
• The small open economy: inter-sectoral resource allocation and real exchange rates
• Multiple agents and overlapping generations model
• Fiscal policy and public debt
• Asset markets and money in the open economy

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

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.

Does education matter for development? There have been significant improvements in educational attainment across developing countries but it is not evident that such improvements have actually been productive. We will examine why this is so, with a focus on issues of measurement of skills, the incentives for productive investment in skills and the constraints faced by individuals in making productive investments.  The focus is largely micro-economic but we will stray into examining whether aggregate investment in education matters for growth too. We will discuss models of skill accumulation, school organisation and education supply together with empirical evidence that relies on micro-econometric techniques ranging from standard instrumental variables to treatment effects, discontinuity designs and natural and randomised experiments.

Micro- and small-scale firms dominate the private sector in low-income countries. Why do these firms fail to grow? Does too much government stifle firm growth, and chase firms into the informal economy? Or is there too little government, with no credit markets or contract enforcement to draw firms into the formal sector? This module will explore these questions with a focus on firms and their managers. We will examine the causes and consequences of informality, availability of credit for microenterprises, management of larger firms and the link between the size of markets and the size of firms.

This module will focus on applied development economics research on labour markets and migration in low- and middle-income countries. We will examine the functioning of labour markets, discuss factors that hold back workers from finding (good) jobs, and review empirical development economics research on programmes and policies that aim to connect workers to jobs. We will study whether training can increase returns to labour and examine how job search assistance can help youths find jobs. An additional focus will be on voluntary and forced migration within and across borders, including the role of labour mobility in increasing incomes and emerging evidence on integrating refugees into host community labour markets.

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.

Objectives: This module is concerned with short-run macroeconomic stabilization in developing countries. In Part I we will examine countries’ choices around their 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. 

Content: 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.

In this module, we explore a range of interventions aimed at alleviating poverty and improving economic outcomes, including microcredit, savings, cash transfers (both conditional and unconditional), and 'targeting the ultra-poor' asset transfer programs. We will survey the recent literature and focus on empirical methods that help us to understand the mechanisms through which interventions may work.