Development Economics: Theory and Policy (Paper-3) M.A. Economics Part-II
This is a course about the understanding of the economies popularly known as developing countries. In this course, students are introduced to the conceptual meaning of economic development while distinguishing it from economic growth and the common characteristics of developing countries. The course develops necessary abilities in the students to generalize and apply development economic theories to solve the most pressing problems of the developing world. It helps to understand structure and functioning of institutions, markets, and policies adopted in the developing countries to accelerate welfare of their citizens. The course covers theories of economic growth and models and their application pertaining to contemporary issues of the developing world, such as poverty, income distribution, unemployment, and macroeconomic destabilization. After the completion of this course, students are expected to contribute to the society with their opinions about the development problems from various forums of public and private organizations.
A considerable knowledge of introductory-level macroeconomic and microeconomic theory is an advantage; otherwise no special prerequisite for this course is required.
Note: Students are expected to study the latest editions of the recommended books. At least two research papers pertaining to each topic must be comprehended. Each topic must be prepared and analyzed critically. Any aspect of the topics may be asked in the examination. The course content provides a guideline. Students must prepare critical review of topics.
Part: A Theoretical Foundations and Sector Specific Issues:
Topic: 1 Scope and New Developments
- Definitions: Economic Development and Growth
- Identification of Development variables.
- Scope and Significance of Development Economics.
- Characteristics of LDC’s.
- Measurement of Economic Development and Growth. Per Capita Income approach, Quality of Life Index / HDI etc.
- Historical overview of world development and emerging major issues pertaining to Less Developed Countries (LDC’s).
- Why the whole world is not developed?
Topic: 2 Major Theories of Development
- Classical and Neo-classical Theories
- Adam Smith and Competitive Capitalism
- Vicious Circle of Poverty
- Stages of Economic Growth
- Balanced and Unbalanced Growth
- Big Push Theory
- Dependency Theory
- Structuralist’s View Point
- Endogenous Growth Theory
- New growth Theory
- Income Convergence/ Divergence
- Market Friendly Approach.
Topic: 3 Agriculture and Industry
- Agriculture vs. Industry: Development Debate.
- Lewis’ Model of surplus Labor.
- Rains’ Fei Model and its critical review.
- Transforming Agriculture, Underemployment problem.
- Role of Agriculture: Market for Industrial Output, Provision of Input, food, Complementarity, productivity growth.
- Terms of Trade Issue and Subsidies, etc. and Competitiveness.
- Land Holdings, Green Revolution and its Performance.
- Need for Industrialization.
- Industrialization and its financing mechanism.
- Problem of Sectoral Dualism.
- Why Green Revolution?
- The Spread of Green Revolution in Pakistan and its Status/Contributions.
Topic: 4 Population, Education and Human Capital
- Demographic Transition
- Human Resources as a source of growth and their contributions.
- Investment in education and returns.
- Models of Employment & Unemployment: Time Criterion, Productivity Criterion and New Index etc.,
- Employment generation Strategies/Techniques.
Part B: International Development Issues and Debates
Topic: 5 International Debt, Aid/Assistance
- Why international borrowing?
- Two Gap Model
- Aid commitments and disbursement
- Sources of borrowing
- Debt Cycle Theory/Stages
- Debt Burden
- Debt Servicing
- Debt laffer Curve
- Debt buy back
- Latin American Debt Crises
- ASEAN Crises
- Debt Problem of LDC’s and South Asia
- Debt Overhang and threat to growth
- Policies to combat debt problem
- Forecasting debt and solution for the debt burden
- saving mobilization/Domestic resource mobilization
- Debt rescheduling
- Debt Modeling and Forecasting Future Implication
Topic: 6 WTO, Liberalization and International Trade
- Trade vs. Aid
- Liberalization of Trade and its impacts/gains
- Foreign Exchange Constraints and Balance of Payment deficit
- Role of GATT and its Failure
- WTO and LDC’s
- Trade Instability
- Distribution of gains from Trade liberalization
- Regional Trade Associations (RTA’s): their role and contributions
- Basis for trade and benefits: Gains from Trade: Static and Dynamic Gains
- Comparative Advantage, Revealed Comparative Advantage and Competitiveness
- Trade as an engine of growth
- Product Cycle
- Determinants of exports growth
- Transfer of Technology: Sources & Need
- Technology Centered Development and Appropriate technology issue
Topic: 7 Transnational Corporations (TNC’S), FDI and Development
- Transnational Corporations (TNC’s): Objectives, Role and Contributions, Long term cost of TNC’s.
- Transfer of Technology: Ways and Means.
- Global integrated production system
- TNC’s and Globalization
- Foreign Direct Investment (FDI) and Its Determinants/Role
- Foreign Direct Investment (FDI) and TNC’s
- Flow of FDI and its contributions.
Topic: 8 Poverty and Income Distribution
- Definitions and Measurement of Poverty/Poverty Line
- Poverty concepts/definitions
- Absolute Poverty, Relative Poverty
- Income approach, Expenditure approach, Basic needs approach, Poverty of Opportunities Index (POPI) and Calorie-based approach etc.
- Poverty Indicators
- Poverty by socio-economic groups
- Sources, impacts and policies to combat poverty
- Strategies and tools to combat poverty
- Growth and Income Inequality in the world
- Empirical evidences on poverty
- Redistribution with growth
- How to combat income inequality
- Basic Needs, Social Action Programs and Poverty alleviation.
Topic: 9 Environment and Development
- Model of Environment and Economic Activity
- Market Based Approach and Externalities
- Deforestation and Renewable Resources, Measuring environment values.
- Deforestation and Macroeconomic Environment
- Industrialization and its environmental cost
- Use of Pesticides and Environmental Impacts
- Natural resources degradation
- Cost of Pollutions/Environmental degradation
- International awareness about environment, production and need for Reforms
- Economic thoughts and Environment
- International Agencies: Environmental concerns and programs
- Urbanization and environmental issues
- Sustained development
- Ecology and economic progress
Topic: 10 Growth Models
- Harrod-Domer Model
- Technical Change and growth Model
- Kaldor’s Model of Distribution
- Joan Robinson’s Model of capital accumulation
- Model of Steady State Growth
- Saving-Investment and Golden Rules
- Balasubramanyam and Lall, S. (1992, eds), Current Issues in Development Economics. McMillan , London.
- Chaudhary M. Aslam and Hamid, A., (1999). Human Resource Development and Management in Pakistan. Ferozsons,
- Chenery H. B. and Srinivasen. Hand Book of Development Economics,* vol. I & II, Amsterdam (1988, eds.). North
- Cypher M. and Dietz James L., (2004), The Process of Economic Development, Routledge. Tayl or Francis Group, London/New York.
- Ghatak Subarta, (2003), Introduction to Development Economics, Routledge, Taylor and Francis Group, London/New
- Herrick B. and Kindleberger C., (latest eds.). Economic Development. McMillan, New York.
- Hirshman A. O., (1960). Strategy of Economic Development, Yale University,
- Jones H. G., An Introduction to Modern Theories of Economic Growth, (Latest Edition), McGraw
- Mahboob-ul-Haq Center for Human Development (MHCHD). Human Development in South Asia, Annual Reports, Islamabad.
- ————- (1999), A Profile of Poverty In Pakistan, (In Collaboration with UNDP).
- Meier Gerald , Leading Issues in Economic Development, (Latest Issue), Oxford University Press.
- Thirlwall, A.P., (2003), Growth and Development, With Special Reference to Developing Economies 7th edition, Palgrave
- Todaro M. P., Economic Development in the third World. Latest Edition, Heinemann, London.
- UNDP, Human Development Reports , Annual
- Van Den Berg H., (2001), Economic Growth and Development,* McGraw
- William, Easterly, Growth without Development, A Case Study of Pakistan, World Bank.
- World Bank, World Development Reports, Annual reports, 1986, 1987, 1990, 1991, 1992, 1994, 1995, 1998/99, 2000/2001 and
- Yotopolous Pan A. and Nugent Jeffery B., Economics of Development, Empirical Investigation (Latest Issue). Harper and Row Publishers, London/New