| LEC # | TOPICS | LECTURE NOTES |
|---|---|---|
| 1 | Introduction: The Vicious Circle of Poverty (a) World Development Report (b) A Quiet Violence: View from a Bangladesh Village Ch: 12, The Trials of a Poor Peasant Family: Hartmann (1983). | (PDF) |
| 2-3 | Nutrition and Productivity: Interrelationships (a) Theoretical model Ray, pp. 272-279. Ray, pp. 489-504. Poor nutrition leads to low productivity. Low productivity leads to unemployment and low incomes. Low income leads to poor nutrition. This theoretical model can be applied to education, health, nutrition, gender and inter-generational discrimination, and many other issues. (b) Empirical evidence (i) From income to nutrition: A. Income - Nutrition: A study of Maharashtra, India. Subramanian and Deaton (1996). B. Monetary transfer to the elderly can lead to better nutrition for the children. A study of old age pension in South Africa: Duflo (2003) (ii) From nutrition to income: A. Ray, chapter 8. In particular sections 8.3 and 8.4. | (PDF) |
| 4 | Health (a) Health Status in Rajasthan: Banerjee and Duflo (2003). (b) Children are more likely to go to school if they are not sick. An experiment conducted by a NGO in Kenya: Miguel and Kremer (2004). | (PDF 1) (PDF 2) |
| 5-8 | Education (a) The Probe Report on Basic Education in India (1999). Educational choice in India: why are the levels of education so low? Do parents care about education? Can they afford it? What is education good for? (b) Are textbooks really important? An experiment conducted by an NGO in Kenya: Kremer, Glewwe and Moulin (1998). (c) An example of an effective program of school construction in Indonesia: Duflo (2001). | (PDF 1) (PDF 2) (PDF 3) |
| 9 | The Economics of Child Labor (a) Why does child labor exist? What policy can help to suppress it? Basu and Van (1998). (b) Income Effects on Child Labor and School Enrollment in Brazil: Carvalho (2000). | (PDF) |
| 10-11 | Gender Discrimination (a) Evidence of gender discrimination in India: Dreze and Sen (1995). (b) Gender discrimination can arise due to economic reasons: Ray, pp.279-288. (c) How can we prove that there is gender discrimination in everyday life? Deaton (1997). (d) Consumption Smoothing and Excess Female Mortality in Rural India: Rose (1999). (e) The "marriage market": Rao (1993). (f) Resource constraints lead to 'Sibling Rivalry': Garg and Morduch (1998). | (PDF) |
| 12-13 | Bargaining within Families (a) Income is not spent in the same way by women and by men: Evidence from Brazil (Thomas (1990)), the United Kingdom Child Benefit allowance (Lundberg, Pollak and Wales (1996)), a pension program in South Africa (Duflo (2003)). (b) Competition within the family is not limited to sharing the resources. It leads to lower productivity and lower welfare for all members in the family: Udry (1996). | (PDF 1) (PDF 2) |
| 14 | Midterm | |
| 15 | Savings (a) Do poor people save in good times in anticipation of bad times? Savings by rice farmers in Thailand: Paxson (1992). (b) Have poor people access to savings instruments: A micro-savings experiment in Mexico: Aportela (1998). | (PDF 1) (PDF 2) |
| 16-17 | Land (a) Theoretical background: Ray, chapter 12. (b) Why land reform? Banerjee (1999). (c) A successful limited land reform in India: Banerjee and Ghatak (2002). | (PDF) |
| 18-19 | Insurance Agricultural incomes fluctuate enormously during the year and from year to year. Do consumption and investments fluctuate as well, or are households protected from these fluctuations? (a) Ray, chapter 15. (b) Insurance is only partial: the consumption of household members in Cote d'Ivoire is linked to their income: Deaton (1997), pp 372-383. (c) In bad times are children taken out of school, and given less to eat? An example from Cote d'Ivoire: Jensen (2000). (d) In West Africa, villagers lend to each other and achieve a certain degree of insurance: Udry (1990). (e) Mutual insurance in the village does not happen in the void. It depends on the strength of local institutions: Townsend (1995). | (PDF) |
| 20-21 | Credit Markets Why does formal credit fail to reach the poor? Why has targeted lending organized by the government not worked? Why do the poor borrow from local money lenders at very high rates? (a) Theoretical background: Ray, chapter 14. (b) Why do informal money lenders charge interest rates that are so high? Aleem (1990). (c) An innovative form of lending: micro-credit: Morduch (1999). | (PDF) |
| 22-24 | Formal and Informal Institutions (a) Social networks No policy happens in the void.... What role do informal institutions and norms play? i. Norms helped to sustain long distance trade among Maghribi traders: Greif (1993). ii. However, successful informal institution can be an obstacle to the development of formal institutions: Greif (1994). iii. Social norms as an obstacle to the demographic transition: Munshi (2000). (b) Formal Institutions i. Institutions differ widely around the world: La Porta and Vishny (1998). ii. Good institutions are important for economic performance: aggregate approach: Acemoglu and Robinson (2001). iii. Historical approach: In India, colonial history continues to impact today's outcomes Banerjee and Iyer (2002), Iyer (2003). iv. The mechanics of why institutions matter. A poor institutional environment may makes business difficult. A study of contracting and reputation in the Indian Software industry: Banerjee and Duflo (2000). | (PDF 1) (PDF 2) (PDF 3) |
| 25-26 | Limits to Social Policy: Corruption (a) Why is corruption costly? Shleifer and Vishny (1993). (b) Why is corruption illegal? Why does corruption and red tape go hand in hand? Banerjee (1997). (c) Corruption and the diversion of social policies. The example of canal irrigation in South India: Wade (1982). | (PDF) |