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EC307: Development Economics


Course Content

In a world composed of similar people, why is it that we live in relative comfort while about 1.4 billion people live on less than $1 a day?  And, more importantly, what can be done about it?

This course will use all the skills you have developed as an economist to try and answer important economic questions. Providing an answer is hard because solving the problem of world poverty is not as simple as reallocating income. It would take $511 billion a year to increase the incomes of the poorest to just $2 a day, but calculated in 2003 the G7 countries aspire to give (but do not quite) just $142 billion a year in aid.

In short, solving world poverty requires finding places where an intervention can generate more in income than it costs. Fortunately the economic theory you already know tells us how to find such places. The economic model you have learned says that if some conditions (X) are met then nothing can be done about poverty without making other people worse off. But we can flip this conclusion on its head: if X is not true, then it is possible to make someone better off without making anyone worse off, and the theory tells us how – make the world more like X. Making progress on poverty means finding out where X does not hold – i.e. where do markets fail?

The course then is detective work. Theory tells us when markets will fail and we use econometrics analysis to find these places in the real world. Finally, we use rigorous impact evaluation to find out whether the intervention implied by theory works. We will teach you all the tools you need to apply this thinking, and we hope you will use it to make a difference in the developing world.

Topics covered include:

  • The Neo-classical Model and Convergence of Income
  • Coordination and Persistent Poverty
  • Credit, Inequality in the Divergence of Incomes
  • The Psychology of Poverty
  • Health and Nutrition
  • The Role of Institutions in Development
  • Political Economy and Corruption
  • Property Rights and Investment Incentives
  • International Aid and Economic Growth
  • Microfinance
  • Credit, Saving and Insurance
  • Land Redistribution
  • Role of Media and Policy in Development
  • Social Networks and Social Capital
  • Role Regulation in Development
  • Intrahousehold Allocations and Gender
  • Technology Adoption and Learning

World-class LSE teaching             

The LSE Department of Economics is one of the biggest and best in the world, with expertise across the full spectrum of mainstream economics. A long-standing commitment to remaining at the cutting edge of developments in the field has ensured the lasting impact of its work on the discipline as a whole.

It is a leading research department, consistently ranked in the top 20 economics departments worldwide. This is reflected in the 2014 Research Assessment exercise which recognised the Department's outstanding contribution to the field

On this three week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s economics faculty.


The main reference text for the course:
D. Ray, Development Economics, Princeton University Press (1998).

A. Banerjee & E. Duflo, Poor Economics,Public Affairs (2012)

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice


Session: Two

Dates: 10 - 28 July 2017

Dr Gharad Bryan
Dr Greg Fischer 

Level: 300 level

Fees: Click here for information

Prerequisites: Intermediate microeconomics and macroeconomics

Lectures: 36 hours 

Classes: 18 hours

Assessment*: Two written examinations

Typical credit**: 3-4 credits (US)
7.5 ECTS points (EU)

How to apply?

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*assessment is optional – see FAQs

**You will need to check with your home institution. Read more about credit transfer here.