Human Development and Food Security

MODULE DEVELOPMENT ECONOMICS

Coordinator Pasquale Tridico - Assistant Professor

University Roma Tre

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Core issues cover:

§ Micro- and Macroeconomics

§ International Economics

§ Institutions and Development

§ Poverty and Environment

§ Development Policies

§ Development Theory and Financial Assistance

§ Foreign Debt and HIPC

Photo: Raphaël Blasselle

Macroeconomics

This course introduces students to the basic concepts of macroeconomics and economic growth theory. The aim is to provide students with a framework to analyze the external economic environment and to understand the major factors that cause macroeconomic change and economic growth.

Microeconomics

The theory of Consumer and the theory of producer - Consumers, producers and efficiency of the markets - Firms in competitive markets – Monopoly - Oligopoly and monopolistic competition - Externalities, public goods and common resources.

International Economics

The course’s objective is to give an overview of the main characteristics of trade across advanced and developing countries. The first part of the course presents a set of stylized facts concerning trade, highlighting the differences present at the sectoral and region level. In particular, the characteristics of the export vector of developing and developed countries will be compared and the specialization pattern of some selected world region (NICs, Latin America) analyzed in detail.

In the second part of the course are introduced a number of trade models to analyse the determinants and effects on welfare, wages and trade flows of increasing the level of trade integration. It will be discussed the arguments in favour or against the optimality of free trade.

In the third part, it is discussed the role of trade policies, both from an empirical and theoretical point of view, in determining the countries’ growth rate. These have played a fundamental role in shaping the industrialization process of nowadays industrialized countries but have also been widely used in developing one with mixed results. The reasons why similar trade policies have had very different effect on the development process of latecomers’ countries will be thoughtfully discussed.

In the forth part, they will be presented the main aspects of the DOHA negotiation Round. In particular, they will be presented which are, from the point of view of developing countries, the most important issues to be discussed and which are the trade effects of the most important proposals that have been advanced during the Round by both advanced and developing countries.

Institutions and Development

During the lectures institutions will be defined and analysed following the main institutional approaches, i.e: the Old Institutional Economics (Vebeln, Commons, Mithcell etc), and the New Institutional Economics (Williamson, Coase etc). Afterward, the main aim will be to evaluate, through an institutional analysis, the impact of economic institutions, both formal and informal, on the economic performance and on the development process of advanced and developing countries. An evaluation will be given also on the main institutional strategies of the recent years (Washington Consensus and Post-Washington Consensus). Finally, it will be stressed also how the institutional change is relevant for developing and emerging economies, but also for developed economies, when they star a transformation process.

Poverty and Environment

This lesson is oriented toward a wide spectrum of issues concerning the multiple linkages among environmental management, economic growth and poverty. The first part is dedicated to a general description of the possible linkages between poverty and environment, looking at the double causal relationships: from one side the negative impacts on natural resources produced by poor people, and from the other side the negative effects for the poor related to pollution and lack of natural resources.

In order to give a general description of the relation between economic growth and environment, there will be a systemic analysis of two empirical models: a) the resource curse hypothesis explaining the role of natural resources in a long term economic growth process; b) the environmental Kuznets curve, in order to understand the causal relationship between economic growth and environmental management. Both the resource curse hypothesis and the EKC will be analyzed considering pros and cons of such stylized models, emphasizing the necessity of an integrated approach which includes the role of institutions and human development dimensions.

Development Policies

This course brings an overview of different approaches in the field of development policies combining the theoretical contributions in matters of economic development and growth with their results for policy implications.

The focus of the first lesson is on the growth theories, traditional and new, and on the prescriptions for policy descending from these theories: open markets and policies to increase saving, investment, foreign aid, education and technology. The lesson includes a discussion of the failures and limitations of this approach. According to many development specialists, the determinants of success sketched in these theories can be regarded as exogenous factors that describe the features of development but do not provide a deep explanation of it. This field of research does not tell us why less developed countries lack the incentives to acquire some crucial factors such as human capital or new technologies.

The second lesson revolves around the research on the role of historical conditions and the role of institutions in economic development. Here the policy conclusion is that the quality of institutions is the key for development. Again, the lecture will also stress the critiques to this broad approach and the policy difficulties arising from the related recipes which are often very general and fall short of practicability.

In the conclusions drawn from this brief tour on development policies it will be proposed a pragmatic approach that requires to identify the causes of failures in a specific country and to remove first the most stringent obstacles to development.

Development Theory and Financial Assistance

Lecture 1: From Bretton Woods to structural adjustment. This lecture aims to show that, since their foundation at Bretton Woods, the International Financial Institutions have continuously adjusted in response to changing circumstances in the world economy, international politics, and theoretical advancement.

Lecture 2: The structural adjustment period. This lecture focuses on structural adjustment programmes, analyses the so-called ‘Washington Consensus’, and discusses the factors that might explain the emergence of structural adjustment programmes

Lecture 3: The post-Washington Consensus. This lecture discusses the shortcomings of structural adjustment and the factors that might explain the emergence of the post-Washington Consensus. The lecture focuses on the features of the post-Washington consensus and of the Poverty Reduction Strategy and addresses the question whether the post-Washington Consensus constitutes a real break with the Washington Consensus.

Lecture 4: Development Policy Lending, conditionality and the “Knowledge Bank”. This lecture focuses on the new lending facility of the World Bank, namely, Development Policy Lending, which has replaced Structural Adjustment Lending. It analyses what its emphases on ownership and selectivity imply for the use of conditionality and investigates the relationship between the nature of conditionality and the idea of the World Bank as the “Knowledge Bank”. The lecture addresses the question whether Development Policy lending constitutes a break with structural adjustment.