Economics serving society

Program content

PNG - 818.6 kb

How do institutions shape the development process? How do understudied informal institutions, such as identities and customs, interact with formal institutions? How do we interpret recent trends in inequality within low- and middle-income countries?

Our programme approaches these questions by drawing on formal theory and rigorous empirical research in two core modules: “Inequality and development” and “Models of Cultural Dynamics and Social Identity”. In addition, three shorter modules develop empirical applications of the core course themes. These modules cover the role of historical legacies, civil conflict, corruption, and media in economic development. The objective of the programme is to equip you with the background and tools you need as a researcher to contribute to this dynamic field, and to engage in informed policy debate.

Structure

  • Theme I: Inequality and Development, François Bourguignon
  • Theme II: Models of Cultural Dynamics and Social Identity: Applications to Conflicts and Governance in Development, Thierry Verdier
  • Theme III: Historical Legacies, Denis Cogneau
  • Theme IV: Corruption and institutions, Ekatarina Zhuravskaya
  • Theme V: Conflict and Development, Oliver Vanden Eynde

Research Lab

We will organize daily research lab sessions. In these sessions, you will work on a research proposal in a small group of students with shared interests. We will provide feedback and guidance to help you develop this proposal over the course of the week. At the end of the programme, you will have the opportunity to present your project to our faculty.


Inequality and Development - François Bourguignon

Objectives
Inequality has become a hot topic in politics, economic research and policy. This is true both in developed and in developing countries. This is also true at the global level, as shown by the emphasis on the fight against global poverty in the Sustainable Development Goals, which succeeded the Millenium Development goals. This concern for inequality has multiple motivations: social justice, political stability and economic efficiency. The ambition of this course is to review what economists have to say on these various aspects of inequality by addressing the following set of questions. Is it true that inequality is rising everywhere? Is too much inequality detrimental to economic development? And if so, what kind of inequality, and through which channels? How much is “too much”? Which instruments and which policies can reduce inequality? What is the political economy of these policies and possible tradeoffs governing them? The recent literature on inequality is voluminous, even when restricting attention to the relationship between inequality and development. This course intends to provide a general view of that literature. It focuses more on the deep lessons to be learnt from it in terms of knowledge and policy implication than on purely technical aspects of it. On this basis, it identifies key areas of future research and policy debate.

Course structure

  • Trends in inequality in the world
  • The macroeconomics of inequality and development
  • Inequality and development, the role of institutions
  • The microeconomics of income distribution dynamics
  • Policies for reducing inequality and their effectiveness

References
- Atkinson, A. and F. Bourguignon (2000), Introduction, Handbook of income distribution, volume 1, North-Holland
- Atkinson, A. and Bourguignon F. (eds) (2015), Handbook of Income Distribution, Volume 2b, Elsevier


Identity, Social Change and Institutional Dynamics in Development - Thierry Verdier

Objectives
Cultural dimensions, ethnic identity and social norms are increasingly recognized as important, and evolving factors in economic development. They are also contribute and interact with the political economy of development policy and conflicts. This part takes stock of existing economic research on identity formation and cultural change, and their connections to conflicts, governance and institutions. We present recent theoretical advances on these issues, and their applications to specific development contexts. This course offers theoretical foundations for the more applied modules on corruption, institutions, and civil conflict. This part is complemented in the programme by the lecture of Oliver Vanden Eynde on Conflict and Development, especially on the empirical side (see description below).

Course structure

  • Models of Identity formation and cultural evolution
  • Cultural Polarization and Ethnic Identity
  • Co-evolution of Culture and Institutions

References
- Bisin, A. and T. Verdier (2011),“The Economics of Cultural Transmission and Socialization” in the “Handbook of Social Economics”, J. Benhabib, A. Bisin and M. Jackson (eds), North Holland
- Eriksson L., 2015, “Social Norms Theory and Development Economics”, World Bank Policy Research Working Paper 7450.
- Alesina, A. and P. Giuliano, 2015, “Culture and Institutions,” Journal of Economic Literature, issue 4, 898-944.
- Bisin A. and T. Verdier 2017, “On the Joint Evolution of Culture and Institutions”, NBER Working Paper No. 23375


Corruption and Institutions - Ekaterina Zhuravskaya

Objectives
Over the past decade the economic literature on corruption has seen a remarkable revival related to economists’ ability to measure corruption and to identify its effects and causes. This part of the programme will review important recent contributions to our understanding of corruption in developing countries, focusing on measuring and quantifying corruption, identifying its determinants and efficiency consequences. We will pay special attention to media as determinant of corruption and accountability.

Course Structure

  • Corruption: Measuring corruption, it’s effects and determinants
  • Media and accountability
  • Background theory for both parts of the course

References
- Olken, B., and R. Pande (2012) “Corruption in Developing Countries,” Annual Review of Economics, 4, pp. 479-505.
- Mironov, M., and E. Zhuravskaya (2016) “Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data,” American Economic Journal: Economic Policy, vol. 8(2), pages 287-321.
- Durante R. and E. Zhuravskaya, (2017). “Attack When the World is Not Watching? International Media and the Israeli-Palestinian Conflict,” Journal of Political Economy.


Historical Legacies in Development and Inequalities - Denis Cogneau

Objectives
This course will provide a critical introduction to the ever-expanding literature on long-term factors of economic development, with a specific focus on the African continent. The first part will provide an overview of alternative and conflicting stories for the comparative development of Africa, America and Asia, and for lines of differentiation within each continent. The second part will then look at ongoing research on the colonial history of Africa, examining how it sheds light on the main challenges of the present regarding growth and inequality, in particular state capacity.

Course Structure

  • Divergence and Reversals of Fortune in development
  • Geography, Technology and Family Models
  • Precolonial institutions, Slave Trade, Colonialism
  • Colonial institutions and policies, State capacity, and present-day challenges in Africa
  • Political economy of the colonial State in Africa
  • British and French colonial legacies contrasted
  • Postcolonial States

References
- Bates R.E., J.H. Coatsworth, and J. Williamson (2007), “Lost Decades: Post-independence Performance in Latin America and Africa”, Journal of Economic History 67(4): 917-943.
- Pomeranz, K., (2000). “The Great Divergence: China, Europe, and the Making of the Modern World Economy”, Princeton, NJ: Princeton University Press, 2000.
- Cogneau D. and A. Moradi, (2014). “Borders that Divide: Education and Religion in Ghana and Togo since Colonial Times”. Journal of Economic History, 74(3): 694-728.


Conflict and Development - Oliver Vanden Eynde

Objectives
Many of the world’s poorest countries are currently suffering from civil wars or recovering from them. Development policies need to be adapted to these environments, and they often aim directly at reducing or preventing conflict. However, the study of conflict had received relatively little attention in development economics until recently. This short, three-hour lecture offers a concise introduction to the fast-growing literature on conflict and economic development. The focus of this course is on empirical work, and it complements the course of Thierry Verdier – which covers some of the most influential theories of conflict. We discuss key empirical findings and ongoing debates, emphasizing how research on this topic can inform policy approaches to conflict.

Course Structure

  • The consequences of war
  • Human development
  • Cooperation in post-conflict settings
  • Causes of war
  • Ethnicity, inequality, and polarization
  • Economic shocks
  • Information and civilian participation in war
  • Political institutions and civil war

References
- Dube, O. and J. F. Vargas. (2013). “Commodity Price Shocks and Civil Conflict: Evidence from Colombia.” Review of Economic Studies.
- Vanden Eynde, O. (2018). “Targets of Violence: Evidence from India’s Naxalite Conflict.” Economic Journal.


Contents - Development