Development Economic Policies

Course code Econ:631

Course Title Development Economic Policies
Semester Year 1,Semester 11
Course The course is a follow up of development economics theories which deals with the
description contemporary analysis of economic problems of developing countries through the
use of lecture, directed reading and term paper (seminar) preparation and
presentation. It offers theory and empirical evidence on problems and policies of
developing countries emerging both from domestic and external sources. It covers
topics including population growth and economic development, human capital and
development, rural-urban interaction and migration, international trade policy and
its implication for the development of developing countries, foreign financing and
its impact on development.

Course The aim of the course is to develop an understanding of the development policy
Objectives debates, theories and relevant empirical evidence in the areas of population
growth, human capital development, rural-urban interaction and migration,
international trade policy and its implication for the development of developing
countries, foreign financing and its impact on development.
.
 To develop a thorough knowledge on contemporary development problems
of developing countries and understand the interdependence of domestic
and external factors in the process of economic growth and development of
developing countries;
 Understand the multitude of problems facing developing countries and
applyrelevantpolicy interventions to solve the same
 Apply various relevant development models/theories to explain the
dynamics of economic development
 To enable students solve current national and global development problems

Prerequisites 522
C.HR 3

ECTS 5
Learning
Outcomes Up on completion of this module students should be able to:
 Analyze what matters in the process of economic development
 Evaluate the challenges facing developing countries
 Develop well-articulated views on development policy
 Evaluate the relevance of contemporary empirical works and cases: to
solving real development problems: development success stories, failures
and the lessons learned and so on
 Assess development from globalization and international finance, resource
allocation, and gender perspectives

Course 1. Population growth and economic development

Contents  The Basic Issue: Population Growth and the Quality of Life
 The Hidden Momentum of Population Growth
 The Demographic Transition
 The Causes of High Fertility in Developing Countries: The
Malthusian
and Household Models
 Is Population Growth an Obstacle to Economic
Development?
o Conflicting Perspectives on the economic Consequences of
High Fertility
 Some Policy Approaches
o What Developing Countries Can Do
o What the Developed Countries Can Do
2. Human capital(Education and health) and development
 The Central Roles of Education and Health
o Education and Health as Joint Investments for Development
o Improving Health and Education: Why Increasing Income
Is Not Sufficient
 Investing in Education and Health: The Human Capital Approach
 The Gender Gap: Discrimination in Education and Health
o Consequences of Gender Bias in Health and Education
 Educational Systems and Development
 Health, Productivity, and Policy
o Productivity
o Health Systems Policy
3. Urbanization, Rural-urban migration, and Employment
 The Migration and Urbanization Dilemma
o Urbanization: Trends and Projection
 The Role of Cities
Industrial Districts
Efficient Urban Scale
 The Urban Giantism Problem
First-City Bias
Causes of Urban Giantism
 The Urban Informal sector
o Policies for the Urban Informal Sector
o Women in the Informal Sector
 Dimensions of Unemployment and Underemployment
 Rural–Urban Migration: theory
4. International trade theory and development strategy
 Economic Globalization: An Introduction
 International Trade: Some Key Issues
Trade and Development/growth
 Importance of Exports to Different Developing Nations
Demand Elasticities and Export Earnings Instability
The Terms of Trade and the Prebisch-Singer Hypothesis
 International trade theories and development
o An overview of international trade theories
o Trade Theory and Development
 The trade policy debate and industrialization in developing
countries
o Traditional Trade Strategies for Development: Export
Promotion versus
Import Substitution
 Trade Policies of Developed countries and protectionism
5. International financial flows and economic development:Foreign
Finance, Investment, and Aid
 The International Flow of Financial Resources
 Private Foreign Direct Investment and the Multinational
Corporation
o Private Foreign Investment: Some Pros and Cons for
Development
o Private Portfolio Investment: Benefits and Risks
 Foreign Aid: The Development Assistance Debate
 The Debt problem
6. Contemporary issues in Ethiopia’s Economic Development Policies

Course The delivery method shall be student-centered. Students are highly expected to
Delivery participate in class works at the middle and end of each session and in group
Methods discussions inside and outside of the class. Specifically the course will be
delivered through the following methods:
 Lecture Method
 In-class problem solving
  Group Work
 Assignment

Assessment  The module employs a continuous assessment method. Students’ performance

Methods will be evaluated on the bases of their ability to describe, explain, compare,
apply and analyze issues in Development Economics. Students are required to
demonstrate competence in a variety of ways, including written exam,
presentations, group work, and in-class exercises and homework.
 Students will be provided with two assignments: individual and group. The
individual assignment will be that students individually review articles in the
development areas of their choice.
 Students are required to submit their article review in both soft and hard copies
to the instructor according to the deadline that the instructor sets.
 The group assignment is to write a term paper on some selected thematic areas
and make presentation before their class. The instructor assigns, to each group,
thematic areas identified in this module.
 Students will then write term papers following the academic writing rules and
deliver the final paper according to the schedule set in this module. The
presentation will have to also follow the timeframe indicated in the process
plan and structure plan parts of this module. Each student is required to make a
presentation of sections of the group work before class.
 Making individual presentation will help to avoid free rider problem in group
works. A question and answer session and interactive lecture will help verify
students’ follow-up of the course work.

 References
 Todaro, M. P., Smith, S.C. (2012). Economic Development. (11th ed.).
Pearson, Addison Wesley.
 Debraj, R. (1998), Development Economics, Princeton University Press.
New Jersey.
 Wayne Nafziger, Economic development, 4th ed., Cambridge University
 press.
 Charles Jones, 2000, Introduction to Economic Growth, Norton and
Company. Inc.
 Daren Acemoglu, 2009, Introduction to Modern Economic Growth,
Princeton University Press
 James M.Cypher and James L.Dietz, 2004, The Process of Economic
Development, 2nd Edition, Routledge.
Supplementary Books
 Gerald, M. Meier, M. James and Rauch, (2005), Leading issues in
Economic Development, 8th Ed, New York: Oxford University Press.
 Amartya Sen (2000). Development as Freedom. Anchor
 Beharman, J., Srinivasen T.N (eds) (1995). Handbook of Development
Economics.
 Basu, K., (1996). Analytical Development Economics. Cambridge: MIT
 Gerald Ed. MEIER, M. and Stiglitz, E. (2001), Frontiers of Development
Economics, the Future Perspective,
 Pierre-Richard Agenor and Peter J. Montiel (1999). Development
Macroeconomics. (2nd ed.) Princeton University Press.
 Robert Barro, Xavier Sala-i-Martin (1995). Economic Growth.
Cambridge: The MIT Press
 William Easterly (2001). The Elusive Quest for Growth: Economist’s
Adventures and Misadventures in the Tropics. The MIT Press
