MIME-Version: 1.0 Content-Location: file:///C:/8CB24545/Institutionsandeconomicchange.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" PPA730-4

PPA 730-4:  Institutio= ns and Economic Change

Spring 2007

 

 

John McPeak

336 Eggers Hall

Office Phone:  443-6146

web pag= e:  http:/= /faculty.maxwell.syr.edu/jomcpeak/

e-mail<= span class=3DGramE>:  jomcpeak@maxwell.syr.edu

Office Hours: &n= bsp; T TH 9:30-11:30.

 

 

Course Description:

 

This course is designed for students who have already = taken a survey of development economics (such as PPA 757/ ECN 661 / ECN 700).  The course will focus on the role = of institutions in economic growth. It is the first year the course is being offered, so there will be some experimentation going on with the content and presentation.   At this p= oint, the plan is as follows.

 

 

Grading:

The course is run largely as a seminar, so participati= on is critical.  1/3rd of= your grade will be determined by how prepared and engaged you are in class and t= he in class presentations of course material you make.  1/3rd will be based on = the written final project and in class presentation of this project. 1/3rd= will be based on a written final for the course.

 

Course Outline:

1= )      Development and Institutions:  What do we = need to get right?  Jan 16,18,23,25= ,30

= a.      = Institutions: 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Greif, A. (2006) Institutions and the Path to the Modern Economy  Chapter<= /u> 1. 

= b.      Washington Consensus: 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Williamson, J. (2000). “What Should the World Bank Think About the Washingt= on Consensus?”  The World Bank Research Observer.  15(2): 251-64.;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;          ii.   &n= bsp;  Gore, C.  (2000) “The Rise and Fall of the Washington Conse= nsus as a Paradigm for Developing Countries.”  World Development<= span style=3D'font-style:normal'> 28(5): 789-804; 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;         iii.   &= nbsp;  Onis, Z. and F. Senses (2005), “Rethinking the Emerging Post-Washington Consensus.”=   Development and Change 36(2):263-90.

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;        iv.   &n= bsp;  Rodrik, D. (2006).=   “Goodbye Washington Consensus, Hello Washington Confusion”  = mimeo – forthcoming in Journal of Economic Literature.   

= c.      = WB poverty reduction study – a look at development institutions 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Christiansen, K. with I. Hovland (2003) “The PR= SP Initiative.  ODI working paper= 216. 

= d.      Comparing some big themes in development

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Sachs,J. (2005) The = End of Poverty

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;          ii.   &n= bsp;  Easterly,W. (2002) T= he Elusive Quest for Growth

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;         iii.   &= nbsp;  De Soto,H.  (2003) The Mystery of Captial.

The first three sessions w= ill focus on topics (a), (b), and (c).  We will set the context with where we are in development thinking and policy currently.   Topic= s (b) and (c) will also help frame how policies at development institutions are formed.

The next two sessions will= consist of students presenting the three books (Sachs, Easterly, and De Soto). Each group will have half a c= lass to summarize the main points of each book (you will be divided into three t= eams for this).  The final half cla= ss will be to contrast these three books and discuss the approaches.

            The Easterly Sachs Debate

 

2= )      Cross country studies Feb1,6,8,13,15

= a.      = Convergence and cross country regressions, the basic idea: 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Barro, R.  (1991). “Economic Growth in a Cross Section of Countries.”  The Quarterly Journal of Economics  106:2  p. 407-443

= b.      Institutions, Openness, and Geography:  what= leads to growth? 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Rodrik, Subramanian and Trebbi= (2004) “Institutions Rule” Journal of Ec= onomic Growth&n= bsp; 9: 131-165;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;          ii.   &n= bsp;  Easterly and Levine (2003) “Tropics, Germs and Crops”  Journal= of Monetary Economics 50:3-39= ;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Sachs (2003) “Institutions Don’t Rule” NBER working paper= 9490. 

= c.      = Aid, Policies, and Growth: 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Burnside and Dollar (2000) “Aid, Policies, and Growth” American Economic Review 90(4): 847-68<= /i>;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;          ii.   &n= bsp;  Easterly, Levine, and Roodman<= /span> (2004) Comment in AER 94(3): 774-780;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;         iii.   &= nbsp;  and Burnside and Dollar reply in AER 94(3): 781-784; 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;        iv.   &n= bsp;  Dollar and Levin (2006). “The Increasing Selectivity of Foreign Aid.”  <= /span>World Development= 34(2): 2034-2046

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;          v.   &nb= sp;   Dollar and Levin (2005).  “Sowing and Reaping”  = World Bank Research Working Paper 3524.

= d.      Aid, Corruption, and Growth; 

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Alesina and Weder (2002) “Do Corrupt Governments Receive Le= ss Foreign Aid”. AER 92(4): 1126-1137;

= e.      = Aid conditions and growth;

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            i.   &nb= sp;  Easterly (2005) “What did Structural Adjustme= nt Adjust?”  Journal= of Development Economics 76: 1-22=

 

This section will be a bit= more based on lecture, presenting and contrasting these papers.  We will discuss each in turn after= a brief presentation that summarizes the main findings of each. 

 

3= )      Political Institutions and Economic growth  Feb 20,22, 27

= a.      = Acemoglu, D. (2005).  “Politics and Economics in Strong and W= eak States” Journal of Monetary Economics 52(7): 1199-1226

= b.      Acemoglu, D. and J. Robinson (2006).  “Paths of Political Development” and “Our Argument”, chapters 1 and 2 in Economic Origins of Dictatorship and Democracy.  Cambridge Universit= y Press.  On reserve.

 

This section will again be= based a bit more on lecture, presenting and contrasting these approaches.

 

 

4= )      Country case studies  Mar 1, 6,8

= a.      = Rodrik’s book (In Search of Prosperity) and JEL (1996) paper.

= b.      If we don’t cover all of (a), we could also draw on Williamson’s (1994) book, The Political Economy of Policy Reform

 

In this section of the cou= rse, the expectation is that you will pick one of the chapters or articles (or other source if you have one in mind) to summarize the findings for country case study of what worked or did not work in terms of institutions and growth in= the country’s history.  Stud= ents will present and contrast their cases in class.

 

 

5= )      Markets and Institutions  Mar 20, 22, = 27, 29

= a.      = Game theory interlude

b.&n= bsp;     How markets happ= en

<= span class=3Dcitation1>      =             &nb= sp;            =             &nb= sp;            =        i.   &nb= sp;  Platteau,= J.P. (1994)  &#= 8220;The role of public= and private order institutions. (Behind the Market Stage Where Real Societies Exist, part 1).”  Journal of Development Studies v30(3): 533-577.  On reserve.

<= span class=3Dcitation1>=       =             &nb= sp;            =             &nb= sp;            =      ii.   &n= bsp;  Platteau,= J.P. (1994)  &#= 8220;The role of = moral norms. (Behind the Market Stage Where Real Societies Exist, part 2).= 221; Journal of Development Studies 30(4): 753-817

<= span style=3D'mso-list:Ignore'>&nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;         iii.   &= nbsp;  Moore, M. (1994) “How difficul= t is it to construct market relations? A commentary on Platteau.”  Journal of Development Studies 30(4): 818-830

<= span style=3D'color:black'>        &nb= sp;            =             &nb= sp;            =              iv.   &n= bsp;  Fafchamps and Minten (2001).  “Property Rights in a Flea Market Economy”  EDCC 49(2): 229-267

<= span style=3D'color:black'>        &nb= sp;            =             &nb= sp;            =             &nb= sp;  v.   &nb= sp;  Greif, A. (2006)  Institutions and the Path to the Modern Economy

 

This section will again be= based a bit more on lecture, presenting and contrasting these approaches.  We will discuss and contrast these papers in class as well.

 

 

6= )      Land Reform  April 3, 5

= a.      = Platteau, (2000).  “Property Right= s in Land – Part II:  Individ= ualization of Land Tenure”.  Chapte= r 4 in Institutions, Social Norms, and Economic Development, J. P. Platteau, Routledge.  On reserve.

= b.      Inverse farm size productivity discussion

 

This section will again be= based a bit more on lecture, presenting and contrasting these approaches.  We will discuss and contrast these papers in class as well.

 

7= )      Return to Sachs, Easterly, de Soto  April 10, 12

The three groups who prese= nted the books in the first part of the class will return to these three books and t= he approaches set out within in light of what we have covered so far.  Each group will have half a class, and the final half of class will be a discussion about the three approaches.

 

8= )      Student presentations  April 17,19,26,= May 1 (no class on the 24th for Mayfest)

Students present the findi= ngs of their paper written for the course.  Some ideas:

 

Summary, review, and criti= que of

 

“Economic Growth in = the 1990s:  Learning from a Decade= of Reform” World Bank.

 

“The White Man’= ;s Burden” by William Easterly

 

“World Development Report 2003: Sustainable Development in a Dynamic World: Transforming Institutions, Growth, and Quality of Life.”  World Bank<= /o:p>

 

“World Development Report 2002: Building Institutions for Markets.”  World Bank.

 

“= ;Economic Origins of Dictatorship and Democracy” Daron Acemoglu and James Robinson.

 

“Institutions, Socia= l Norms, and Economic Development” Jean-Phillipe Platteau

 

“Market Institutions in Sub-Saharan Africa: Theory and Evidence”
Marcel Fafchamps=

 

A coun= try case study as in the Rodrik book.