Lee Kuan Yew School of Public Policy, NUS

PP5183 International Economic Development

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Meetings: Thursdays 0900h-1200h, MM Seminar Room 3-1 (2016-2017 Sem 2)
Instructor: Danny Quah
E-Comms: D.Quah@nus.edu.sg | @DannyQuah | /DannyQuah
Office: OTH, Wing A, #02-03a; +65.6601.5506
Consultation: Thursdays: 1300h-1600h
Related Pages: PP5183 homepage | Presentations Schedule | Making Course Presentations | Writing Course Papers

Synopsis All emerging economies face common challenges: usually, inadequate resources; otherwise, waste and distortion; often, corruption and technological deficiency. Developed nations can demonstrate best practice. But they can also foist on developing countries restrictions on favored pathways to success: tight boundaries between state and market; unhelpful interpretations of political freedoms, intellectual property rights regimes, open capital markets; a constraining carbon-sensitive global environment — conditions that, while claimed universalist, did not operate when today's advanced economies started their climb to success. All these problems test Asia's emerging economies: this course develops economic and policy responses to help policymakers understand and deal with these challenges.
Learning Outcomes This course introduces students to the international political economy of development, with emphasis on understanding:
  1. different economic development strategies, taking into account specific circumstances for economies in Asia;
  2. successes and failures in claims to universalism for values and approaches;
  3. usefulness and limitations both of micro-strategies such as randomized controlled trials and program evaluations;
  4. interplay of large macro forces in the Middle Income Trap, financial crises, the natural resource curse, and the Lewis Turning Point;
  5. uncertainty surrounding the appropriate boundary between state and market.
Students will learn to engage in debate and to write policy briefs based on:
  1. understanding basic theories of economic growth;
  2. critical reading of the literature;
  3. appreciating the large macroeconomic forces that affect emerging economies;
  4. analysing the interface between markets and public policy in developing nations.
Prerequisites This course module is self-contained, but some prior knowledge in economics (formally acquired or otherwise) will be helpful.

The most useful background is wide reading of general economic problems—such as might be covered in the best international general-interest writings (in, e.g., the Economist, the FT, the Wall Street Journal)—and the wish to understand how those different positions need to be backed up by rigorous, empirically-falsifiable reasoning.

Some optional general background references include:

  • Banerjee Abhijit and Esther Duflo. 2011. Poor Economics. New York: Penguin.
  • Agenor, Pierre-Richard and Peter J. Montiel. 2015. Development Macroeconomics. Princeton: Princeton University Press.
  • Easterly, William. 2001. The Elusive Quest for Growth. Cambridge: MIT Press.
  • Ray, Debraj. 1998. Development Economics. Princeton: Princeton University Press.

Nothing is compulsory; just look at those books periodically to see how our discussions in the course align with ideas there.

Teaching Modes Each week's meeting begins with student presentations, 15 minutes each. These — as well as your midterm paper — will revolve around the question indicated for Weeks 06-07. Obviously, the “conventional, disciplinary” background referred to there is something that remains to be developed between now and then. However, independent of that material, based on only your current general understanding (and perhaps a little forward reading), your presentation should seek to provide insight on circumstances and history for an economy of your choice. (Think of this as a briefing for the CIA - they want to know what you consider the salient facts, history, risks, and prospective trajectories for country X, not so much an analytical, disciplinary framework for it.) Then as the course unfolds in the first six weeks and develops more analytical, disciplinary material, your midterm paper can build on your presentation by merging that presentation's substance with additional analytical content. This “circumstances and history” focus applies even for those making presentations after the mid-term paper: in the 15 minutes available for your presentation, you won't have time to bring in much more additional material. The penultimate course meeting will involve breakout groups, assigned to discuss an economic development challenge, with everyone returning to make group presentations on their solutions. No individual student presentations will be made that week. [Class presentation schedule.

Presenters are invited to submit, by 1700h three working days ahead of their session, some readings they reckon might be useful for what they will say. After the presentations we will have a 15-minute break—just enough to grab a cup of coffee or tea. Then the instructor lectures for the remaining time going over some other related background material, using that to bring out some of the points that the presenters have themselves made. The session then ends with general discussion on the questions arising from the readings, the presentations, and the lecture. I give here some suggestions for how individual presentations might usefully go.

Active participation in the discussions is an integral part of the learning experience in this course. Students will be assessed on both quantity and quality of their interventions; reading the materials beforehand is therefore important. The participation that attracts the highest marks will be one that critically reflects on the readings but then also engages with the thread of the discussion generally.

However abstract our discussions end up, still the end-result needs to be one that policy-makers and observers need to remember concretely and to take forwards in their work. Try to make our discussions thus. When discussing proposals and recommendations, be hard on ideas, not on people (least of all your fellow students!). Don't let the perfect be the enemy of the good, and end up spending too much time on semantics, terminology, and abstract definitions. Try to get to something that works, and then improve from there as needed.

Assessment Both continuous engagement and persuasive writing count for the course grade:
  1. A 1000-word midterm paper/policy brief on your chosen economy (as further described below in Weeks 06-07) — due at the end of Week 7 (1700h Friday 03 March 2017) (20%);
  2. Class participation (10%);
  3. Class presentation (20%);
  4. A 4,000-word final paper/background briefing, on one aspect of international economic development, selected in consultation with course instructor — due at the end of Week 14 (i.e., the week after the end of term, 1700h Friday 21 April 2017) (50%).

You're welcome to submit your papers in either PDF or some common editable format (e.g., Microsoft Word). However you do it, please make sure to provide a wordcount somewhere in the paper itself. The midterm and final papers should be submitted by IVLE / Files (Workbin) / Student Submissions. In this folder, only the submitting student and instructor will be able to see the contents of the submission.

Additionally, I have put down some suggestions for rules you might want to adapt in writing your course papers.

Schedule Details

Topics are sufficiently extensive that more time could easily be devoted to each. But we will keep to a discipline that engages on their key dimensions for just two weeks per topic.

Some readings overlap in coverage and so are repeated in different sections. Just skim the parts that don't apply when you're in a particular topic.

Links that appear below are embedded so please view this document online. If you're reading this only in hardcopy, this document will likely be of less use.

For each section I also provide the lecture slides I will use in 3 per page and full-page formats. The latter should not be printed but are just available if you want to view things online with variable resolution. These lecture slides will be more for certain sections than for others: in particular, for a couple sections the literature remains nascent. (To be clear, the lecture slides are provided so you have a record of key points; what I actually present will often differ from the linear record in the slides for reasons of emphasis and flow.)

Week 01 Shopping Week: Course Introduction and Summary
Slides 3pp | Full

Weeks 02-03: Randomized Controlled Trials. Program Evaluation.
Why does evidence matter? What is the appropriate scope for analysis in economic development? How do you use ideas to change a policy position? How is economic development not just program evaluation?
Slides 02 3pp | Full
Slides 03 3pp | Full

Weeks 04-05: Growth, Externalities. Increasing returns. Knowledge accumulation. IPRs
What do you reach for first when you start talking about growth and development? Why is productivity important, and what can policy-makers do about it? Why is intellectual property different from other kinds of property? Why do advanced and developing nations, in trade deals and elsewhere, argue over intellectual property rights?
Slides 3pp | Full

Weeks 06-07: The Middle Income Trap. Lewis Turning Point. Natural Resource Curse. Carbon and Global Climate Change
Against a background of conventional, disciplinary thinking on growth and development, what are the most significant obstacles to your chosen economy's continued growth? [Or perhaps it's never even actually taken off, much less now face the hazard of a middle-income trap.] Be sure to clarify the circumstances and history specific to your selection.
Slides 3pp | Full

Fri 03 Mar 1700h — 1,000-word midterm paper due; submitted via IVLE

Weeks 08-09: States and Markets. Political Meritocracy. Democracy
“All rich, successful economies are now democracies.” But did they all become rich and successful through practising democracy?
Slides 3pp | Full
Guest lecture 09 Mar 2017: Waheed Hussain (Visiting Distinguished Fellow). The Practice of Democracy in Economic Development

Weeks 10-11: Globalisation. Trade.
Why did major developed economies turn against globalisation and trade? Why was it the emerging economies who originally were suspicious of globalisation but have now become ardent proponents?
Slides 3pp | Full (not yet available)
Guest lecture 30 Mar 2017: Antonio de Lecea (EU Fellow). Globalization East and West

Weeks 12-13: International Finance. Balance of Payments Crises. Trilemma
Why are developing economies so susceptible to foreign exchange crises?
Slides 3pp | Full (not yet available)

Supplementary Information

For those who wish to use ideas here for working with actual data - whether for your other papers or whatever you wish - you are welcome to take data and R code I provide:

Finally, I regularly tweet, blog, and post on Facebook concerning many issues that appear in the course.

Danny Quah
Last modified: Wed Mar 22 21:50:35 Malay Peninsula Standard Time 2017