Student guide International Program A.Y. 2005/06

Topics in Development Economics (Country Risk Analysis)
Aim of the course
The overall aim of the course is to provide students with an introduction to the main problems affecting developing countries and to the key structural features of these economies.
The course will focus on both micro level and macro level issues, which means that the heart of the discussion will be both single individuals, who face particular problems because of the place of living and the country as whole.
The topic of development, poverty and inequality will be presented in the first class, as it represents a central starting point for a course in development economics. The identification of who are the poor, where they live and their characteristics should provide a first insight on the developing world. Within this perspective, the topic of migration will be presented in the following classes.
The second part of the seminar will shift to macro issues, such as debt reduction and the economic of aid, offering some knowledge on whether these instruments are an effective way to fight under-development and poverty.

Lecture 1: Poverty and Development

1. What is Development?
1.1 Two Contrasting Views from Economists: the narrow income approach and the broader basic needs approach.
1.2 Ways of measuring development.
2. What is poverty?
2.1 Poverty means different things to different people
2.2 Three perspectives on poverty
2.3 Measuring poverty: technical issues
2.4 Identification
2.5 Poverty measures: the Poverty Line
2.6 The evolution of poverty

References (essential readings for the preparation of the seminar are marked with a star):
* Instructor's Notes
* Sachs J. (2005) "Can Extreme Poverty Be Eliminated?" Scientific American, September 2005
* UNDP, "Human Development Report, 1997", (chapter 1)
* UNDP, "Human Development Report, 2003", (* chapter 1 and *technical note 1)
Todaro H, Smith S.C., (2003), "Economic Development", Pearson Education, (chapter 1)
Ray D (1998) "Development Economics" Princeton University Press, (chapter 8)
Todaro H, Smith S.C. (2003) "Economic Development" Pearson Education, (chapter 2)
Sachs J. (2005) "The end of Poverty?" Optima, vol.51 n 2
World Bank (2001), World Development Report 2000-2001 "Attacking Poverty", (chapter 1)
Web Site of UNDP publications

Lecture 2: Inequality

1. What is inequality?
1.1 Three concepts of inequality
1.2 Inequality measures
1.3 Trends
2. Poverty, Inequality and Growth
2.1 Inequality – Poverty
2.2 Inequality- Growth

* Instructor's Notes
* McKay A (2002) "Defining and measuring inequality", Inequality Briefing, Briefing Paper n1
* Naschold F (2002), "Why Inequality Matters for Poverty", Inequality Briefing, Briefing Paper n2
Milanovic B (2002) "Words apart: inter-national and world inequality:1950-2000", World Bank Research Department
U.N. (1997) "Trade and Development Report 1997" United Nations, New York and Geneva, (chapter 3)
Killick T (2002) "Responding to Inequality", Inequality Briefing, Briefing Paper n3
World Bank (2001), World Development Report 2000-2001 "Attacking Poverty", (chapter 3)
Milanovic B.(2002) "True World Income Distribution, 1988 and 1993: first calculation based on household surveys alone", The Economic Journal, v 112, pp 51-92
The Economist (2002) "Convergence Period" July 18th,

Lecture 3: Migration

1. Push and pull migration
2. The determinants of migration
2.1 The Expected Income Hypothesis of Harris-Todaro
2.2 The urbanisation bias
2.3 Migration as a family decision
2.4 Network theory

* Instructor's Notes
* Williamson JG (1998) "Migration and Urbanization", chapter 11 in Chenery H and TN Srinivasen (eds) Handbook of Development Economics, vol. 1, North Holland
Todaro H, Smith S.C. (2003) "Economic Development", Pearson Education, chapter 8
Lucas R (1997) "Internal Migration in Developing Countries" , Chapter 13 in Rosenzweig M and O Stark (eds) Handbook of Population and Family Economics vol. 1B, Elsevier Science B.V
Bauer T. and K. Zimmermann (1999) "Causes of International Migration" in Gorter C., P.Nijkamp and J.Poot Crossing Borders: Regional and Urban Perspectives on International Migration, Ashgate, Aldershot

Lecture 4: Migration

1. Characteristics of migrants
2. Trends and composition of immigration
3. Phases in international migration
3.1 Contracts and coercion: 1600-1790
3.2 The rise of Pioneer Free Settlers, 1790-1850
3.3 The age of Mass Migration from Europe, 1850-1913
3.4 Asian Emigration, 19th and Early 20th century
3.5 War, depression and Restrictions, 1914-1945
3.6 Constrained mass migration, 1946-2000
4. The political Economy of Immigration Controls
5. Some economic effect of immigration
5.1 Host country
5.2 Source country

* Instructor's Notes
* Coppel G, J Dumond, I Visco (2001), "Trends in immigration and Economic Consequences", Economics Departmnet Working Paper n 284, OECD
* Visco I (2000) "Immigration Development and the Labour Market", paper presented at the International Conference "Migration, Scenarios for the 21st century", Rome, 12-14 July 2000
Lucas R (1997) "Internal Migration in Developing Countries" , Chapter 13 in Rosenzweig M., O. Stark (eds) Handbook of Population and Family Economics vol. 1B, Elsevier Science B.V
Carrington W, E Detragiache (1998), "How big is the Brain Drain?", IMF Working Paper n 102
Chiswick BR, T Hatton (2002) "International Migration and the Integration of Labor Markets", IZA, Discussion Paper n 559
Black R, R King and R Tiemoko (2003) "Migration, Return and small enterprise development in Ghana: a route out of poverty?" Sussex Migration Working Paper n.9
Ammassari S. and R. Black (2001) "Harnessing the Potential of Migration and Return to Promote Development: Applying Concepts to West Africa" Sussex Migration Working Paper n.3
OECD (2003) "Trends in International Migration" Annual Report OECD, Sopemi 2003

Lecture 5: Debt Relief

1. Developing country Debt
1.1 Definition
1.2 Trend
2. The HIPC initiatives
3. The role of HIPCs themselves
3.1 Sticking to sound policies
3.2 Improving the investment environment
3.3 Diversifying exports
3.4 Prudent policies on new borrowing
4. The Jubilee 2000
5. The impact of external debt on poverty in low income countries

* Instructor's Notes
*Birdsall N, B Deese (2002) "Delivering on Debt Relief", CGD Brief, Vol. 1(1)
*IMF and WB (2001) "Debt Relief for Poverty Reduction: the Role of the Enhanced HIPC Initiative", prepared for the IMF and the World Bank
Todaro H, Smith S.C. (2003) "Economic Development" Pearson Education, chapter 14
Boileau L, Montford M, Raj N and Kadima K (2003) "The impact of external Indebtedness on Poverty in Low Income Countries" IMF Working Paper n 03/61
The Economist (2000), "Can Debt Relief make a difference?", Nov 16th, 2000
Boote AR, K Thugge (1997) "Debt Relief for Low Income Countries and the HIPC Initiative", IMF Working Paper n 97/24
Abrego L, DC Ross (2001) "Debt Relief under the HIPC Initiative: Context and the Outlook for Debt Sustainability and Resource Flow" IMF Working Paper n 01/144
Powell R. (2003) "Debt Relief, Additionality and Aid Allocation in Low Income Countries", IMF Working Paper n 03/175
Radelet S, H Chiang "Providing New Financing to Low-Income Countries with High Levels of Debt: Some considerations" Issue Paper on Debt Sustainability n2, The World Bank

Lecture 6: Aid

1. Definition of Aid
2. Amounts and allocation: public aid
3. Why donors give aid?
3.1 Political motivation
3.2 Economic motivation
4. The effects of aid
4.1 Aid and the Institutional Environment
5. The growing role of non-governmental organizations (NGOs)

* Instructor's Notes
*Todaro H, Smith S.C. (2003) "Economic Development" Pearson Education, (chapter 15)
*Devarajan S, D Dollar, T Holmgren "Aid and Reform in Africa: lessons from ten case studies", The World Bank, Washington D.C, (overview)
*ODI (2003) "Can we Attain the Millennium Development Goals in Education and health through public expenditures and aid?" ODI Briefing Paper, April.
Collier P, Dollar D (1998) "Aid Allocation and Poverty Reduction" Development Research Group, The World Bank
Hay P. MacDonald L, McMahon C (1998) "Assessing Aid, what works, what doesn't and why", The World Bank, Washington DC, (* overview and chapters 3 and 4)
Every student has to prepare and essay, choosing one of the three titles provided.