Email: phopkins@sas.edu.sg
Advanced Economics is a class on "Globalization" that focuses on economic development and economic growth. We will use the conventional economic models you learned in AP Economics as well as some less conventional models from the field of behavioral economics as tools in studying development and growth. Our main text will be Poor Economics by Abhijit Banerjee and Esther Duflo. We will use the book website (here) and the website for the course that Professors Banerjee and Duflo teach at MIT (here). Please bookmark them. This calendar contains information about homework, assignments that are due, and class resources. It also has information about what we'll be doing each day. Click here to see a showcase of some of the work that students have done in this class over the years.
This short video is a good introduction to the kinds of issues we will study this semester.
CALENDAR OF ASSIGNMENTS AND ASSESSMENTS
From pooreconomics.com:
"Poverty and development can sometimes feel like overwhelming issues - the scale is daunting, the problems grand. Ideology drives a lot of policies, and even the most well-intentioned ideas can get bogged down by ignorance of ground-level realities and inertia at the level of the implementer. In fact, we call these the “three I’s” – ideology, ignorance, inertia – the three main reasons policies may not work and aid is not always effective.
But there’s no reason to lose hope. Incremental, real change can be made. Sometimes the change seems small, but by identifying real world success stories, facing up to real world failures, and understanding why the poor make the choices they make, we can find the right levers to push to free the poor of the hidden traps that keep them behind."
January 11: Introduction to Development Economics
Read
Chapter 1 in Poor Economics (Abhijit V. Banerjee and Esther Duflo)
This article: Poor Behaviour (Economist, December 2015)
Bookmark the websites below: The blog (Let's Talk Development) by the World Bank's chief economist may give you ideas for a research question. The World Bank Report (Mind, Society, and Behavior) and the Poverty Action Lab's website below may help you in your research this semester.
This post from the blog describes the idea of "small miracles" in development, something we will discuss frequently this semester.
2015 World Bank World Development Report from the World Bank
Read this review (Mind, Society, and Behavior) for a quick summary of the report.
From pooreconomics.com:
The basic idea of a nutrition-based poverty trap is that there exists a critical level of nutrition, above or below which dynamic forces push people either further down into poverty and hunger or further up into better-paying jobs and higher-calorie diets. These virtuous or vicious cycles can also last over generations: early childhood under-nutrition can have long-term effects on adult success. Maternal health impacts in utero development. And it’s not just quantity of food – quality counts, too. Micronutrients like iodine and iron can have direct impacts on health and economic outcomes.
But if nutrition is so important, why don’t people spend every available extra cent on more calories? From the look of our eighteen-country dataset, people spent their money on food… and festivals, funerals, weddings, televisions, DVD players, medical emergencies, alcohol, tobacco and, well, better-tasting food. So what stands in the way of better nutrition for the poor? And what policies can eradicate the “hidden hunger” of a population who may feel sated but whose diet lacks essential micronutrients?
January 13: Class #1 (Why do famines occur?)
January 18: Class #2 (Improving nutrition in developing countries - direct transfers of food or subsidies?)
January 20: Class #3 (Have U.S. government efforts to address obesity worked?)
January 22: Research papers (Research question and working thesis due by end of class). Use the following links to learn more about the research paper.
Explanation of the research process, a timeline of due dates, and the
document I will use to track your progress.
The rubric I will use to evaluate your paper.
The document I will use to score your paper.
The rubric I will use to evaluate your presentation.
Some exemplary research papers from past SAS students.
From pooreconomics.com:
Every year, nine million children under five die from preventable diseases such as diarrhea and malaria. Often, the treatments for these diseases are cheap, safe, and readily available. So why don't people pick these 'low-hanging fruit'? Why don’t mothers vaccinate their children? Why don’t families use bednets, or buy chlorinated water? And why do they spend such large amounts of money on ineffective cure instead?
There are a number of possible explanations. These can include unreliable health service delivery, price sensitivity, a lack of information or trust, time-inconsistent behavior and the simple fact that the poor may not be able to tackle big, chronic illnesses.
None of these reasons explains everything in isolation. But understanding what stops the immediate spread of our ‘low-hanging fruit’ – bednets, de-worming medication, vaccines, chlorinated water – is an important step in improving global health, and may finally help to eliminate health-based poverty traps.
January 26: Class #1 (Why is the attendance of medical staff so low in rural health clinics?)
January 28: Class #2 (What are the main barriers to widespread adoption of "Western-style" medicine in rural areas of India?)
February 1: Class #3 (What role should the government of India play in trying to improve the country's health status?)
February 3 (Class before CNY): Research papers (Initial bibliography due by end of class)
From pooreconomics.com:
Read the articles linked in the excerpt below from pooreconomics.com:
Over the past few decades, children have flocked into the schools, but schools seem to have delivered very little: teachers and students are often absent, and learning levels are very low. Why is this happening? Is it a supply issue, where the government needs to provide children with better schools, better textbooks, better teachers and better facilities? Or is it demand, where parents would lobby for quality education if and only if there were real benefits?
There seems to be a problem with both. For example, parents expect both too much and too little from the schools: government jobs for those who graduate from secondary school, and nothing for the rest. Teachers seem focused on teaching a small elite, and undervalue the regular students. These expectations affect behavior and generate real world waste.
But the good news is that these expectations and these real world outcomes can be changed: we know how to teach all children, if we only decide to try.
February 10 (Class before Interim): Class #1 (Can differences in human capital and physical capital accumulation explain the differences in growth rates between different countries?)
February 22: Research papers (Outline due by beginning of next class. Last day to change topic.)
February 24: Class #2 (Why have computer assisted learning programs been more successful in developing countries than developed ones? Are these programs an appropriate intervention?)
February 26: Class #3 (Discuss the roles of supply and demand with regards to education in developing countries.)
From pooreconomics.com:
Most policy makers consider population policy to be a central part of any development program. And yet, unexpectedly, it seems that access to contraception may not be the determining factor in the poor's fertility decisions. So how can policy makers influence population?
Instead of contraception, other aspects like social norms, family dynamics, and above all, economic considerations, seem to play a key role, not only in how many children people choose to have, but how they will treat them. Discrimination against women and girls remain a central fact of the life for many poor families.
Going inside the "black box" of familial decision-making - that is, understanding how and why decisions are made the way they are - is essential to predicting the real impact of any social policy aimed at influencing population.
March 1 (Wednesday before IASAS Cultural): Class #1 (What is the evidence for and against the “quantity-quality” trade-off?)
March 3 (IASAS): Research papers (Digital Notecards due by beginning of next class. Use this template for your notecards.)
March 7: Class #2 (Can education investments in girls increase only when parents perceive there to be higher returns to a girl’s education?)
March 9: Class #3 (What can be done to reduce HIV infection rates in African countries?)
From pooreconomics.com:
The poor face a huge amount of risk - a friend of ours from the world of high finance once noted that they're like hedge fund managers. These risks can come from health shocks - like an accident - or agricultural shocks - like a drought - or any other number of unexpected crises. Often, the poor just don't have the means to weather these shocks, and so they get pushed into poverty traps.
The steps they take to protect themselves form these risks are insufficient and often costly: they choose less profitable and less risky crop, they spread themselves too thin across a great number of activities; they exchange favors with neighbors. Yet all this doesn't always even cover large shocks.
So where is formal insurance for the poor? Is that the next billion-customers opportunity?
March 11 (day before exchanges): Class #1 (Why is there such a low supply of insurance in poor countries?)
March 15: Class #2 (What do the poor do to alleviate the problem of insufficient insurance?)
March 17 (Class before spring break): Class #3 (What solutions are there to the lack of sufficient insurance in developing countries?)
March 28: Research papers (Begin first draft)
From pooreconomics.com:
It is apparently hard to be dispassionate about microcredit, which has been simultaneously presented as the biggest hope to eradicate poverty and the cause for multiple suicides of innocent borrowers.
The truth is that microcredit is an extremely impressive social innovation: the movement has managed to find a way to lend to the poor at reasonable interest rates, against all odds, where many government efforts had previously failed. And it has real, if modest, effects on the lives of its clients. But it is not a silver bullet. In particular, it leaves open the next big challenge: how to lend to larger firms, so that microbusinesses can turn into viable enterprises.
March 30: Class #1 (Why is there such a low supply of formal credit in poor countries?)
Read the articles linked in the excerpt below from pooreconomics.com:
Abhijit Banerjee, Pranab Bardhan, Esther Duflo, Erica Field, Dean Karlan, Asim Khwaja, Dilip Mookherjee, Rohini Pande, Raghuram Rajan / Financial Times / 13 December 2010
The microfinance sector in India is in deep crisis. Nine leading development economists co-authored op-ed pieces in the Financial Times ("Microcredit Is Not the Enemy") and the Indian Express ("Help Microfinance, Don't Kill It"). They argue that "microfinance fills a key need in developing countries like India: the provision of financial services to low-income clients who traditionally lack access to formal banking for several reasons."
April 1: Class #2 (What do the poor do to alleviate the problem of insufficient formal credit?)
April 5 (Wednesday before IASAS): Research papers (First draft due by end of class)
April 7 (IASAS): Class #3 (What solutions are there to the lack of sufficient formal credit in developing countries? And is microcredit one of them?)
From pooreconomics.com:
The Victorians used to think that poverty went hand in hand with impatience, at best, and sloth, at worst. It was believed you had to frighten and punish the poor into thinking that any misstep off the straight-and-narrow would cause them to plunge into even more terrible conditions.
Today’s more benign version of this argument is: “How can the poor save when they have no money?" In fact, the poor do save and they do it despite considerable odds: no bank will take their savings, and money saved at home is not very safe. Still, like the rich, they tend to procrastinate and give in to temptations. The double injustice is that these temptations are more likely to derail the poor, and that they have fewer guards against them.
April 11: Class #1 (Why do the poor save so little?)
April 13: Class #2 (What kinds of strategies and institutions do the poor use to help themselves save?)
April 15: Class #3 (What solutions are there to the lack of saving in developing countries?)
April 19: Research papers (Revised draft due at the end of class)
From pooreconomics.com:
Are there really a billion barefoot entrepreneurs, as the leaders of MFIs and the socially-minded business gurus seem to believe? Or is it just an optical illusion, stemming from a confusion about what we call an "entrepreneur"? There are more than a billion people who run their own farm or business, but most of them do this because they have no other options.
Microcredit and other ways to help tiny businesses have an important role to play in the lives of the poor, because these tiny businesses will remain, perhaps for the foreseeable future, the only way many of the poor can manage to survive. But we are kidding ourselves if we think that these businesses can pave the way for a mass exit from poverty.
April 21: Class #1 (What are the barriers that the poor face in growing small enterprises into medium or large businesses?)
April 25: Class #2 (What kinds of strategies and institutions do the poor use to grow their businesses?)
April 27: Class #3 (In addition to micro-finance what tools are available to governments and NGO's in promoting the creation of medium and large sized businesses in the developing world?)
April 29:
From pooreconomics.com:
Even the most well-intended and well-thought-out policies may not have an impact if they are not implemented properly. Unfortunately, the gap between intention and implementation can be quite wide.
The many failings of governments are often given as the reason good policies cannot really be made to work. Is there any hope for poor countries that are often still living under the “long shadow” of extractive colonial institutions. Countries that suffer from corruption and capture by the elite? Or should they - can they - be rescued from themselves?
Politics, we feel, is not that different from anything else. Well-designed incremental changes in the rules of the game, often implemented at the most local level, can make real differences on the ground. And although one never knows when the spark will come, local progress can pave the way to a quiet revolution.
May 4: Class #1
May 6: Work on final drafts of research papers. Make sure you have completed the abstract, bibliography and appendices (if there are any).
May 10: Research papers
May 12: Research papers
Click here to see the rubric I will use to evaluate your paper
And here to see the document I will use to score your paper.
May 16: Senior skip day
May 18: Research papers (Final draft due at the end of class)
Click here to see the rubric I will use to evaluate your paper
And here to see the document I will use to score your paper.
May 20: Research presentation YouTube video due by end of class.
Click here to see the rubric I will use to evaluate your presentation.
Click here to see samples of past student video projects in this class.
May 25 (Exam review day): Work on final project.
May 31 (Final exam day): Final project due.
Your assignment is to find an article in the popular press related to a potential solution to the problem on which you did your research paper. Before the day of the exam produce a short video in which you explain the problem, summarize the article and the solution, and analyze whether you believe the solution will work. You should use economic models in your reasoning.
We will watch the videos in class during the scheduled exam period.