DV492      Half Unit
Economic Development Policy III: Government Policy Analysis

This information is for the 2015/16 session.

Teacher responsible

Dr Joana Naritomi CON.6.12


This course is available on the MPA Dual Degree (LSE and Columbia), MPA Dual Degree (LSE and Hertie), MPA Dual Degree (LSE and NUS), MPA Dual Degree (LSE and Sciences Po), MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MSc in African Development, MSc in Anthropology and Development, MSc in Anthropology and Development Management, MSc in Development Management, MSc in Development Studies, MSc in Environment and Development, MSc in Environmental Economics and Climate Change, MSc in International Development and Humanitarian Emergencies, MSc in Political Economy of Late Development and MSc in Political Science and Political Economy. This course is available with permission as an outside option to students on other programmes where regulations permit.

This course is available to MSc and MPA students from throughout the LSE subject to space constraints; specifically we reserve the right to limit enrolment of students from outside the Department of International Development.

Entry onto the course might be limited at the discretion of the instructor.


'DV490 Economic Development Policy I: Applied Policy Analysis for Macroeconomic Development' or equivalent.

Course content

This course explores key issues in government policies in developing countries. The course will draw on specific examples chosen from development cases worldwide to learn which policies have worked, which ones have not, and how a rigorous analysis of these experiences can inform the design of better economic development policies in the future. It begins introducing concepts from public economics to discuss the scope and impacts of government interventions. In particular, the course will cover issues related to market failures, redistribution, public goods and externalities. The course will also discuss theoretical and empirical work on the economic consequences of government interventions, with particular focus economic incidence, efficiency trade-offs and unintended consequences of policies. In the second part, it focuses on challenges in raising government revenue and delivering public service in the developing world context, where limited state and fiscal capacity impose important constraints in policymaking. Beyond these topics, the course will provide background on relevant analytical tools in quantitative research, and develop skills to interpret empirical evidence in development economics.

Coursework will include a combination of class discussions, problem sets, presentations and computer-lab based sessions for students to explore programming and statistical skills.

Students are strongly encouraged to take DV491, as a highly complementary course that will also apply the empirical methods taught in DV490 to topics in Human Development, Institutions and Markets, Social Networks, Economic History and Cultural Economics, and Behavioural Economics and Development Policy Design.


20 hours of lectures and 15 hours of seminars in the LT.

There will be a two hour revision session in late LT or early ST.

Formative coursework

Students will be expected to produce 3 exercises and 1 other piece of coursework in the LT.

Indicative reading

  1. Alesina, Alesina and Paola Giuliano. 2009. “Preferences for Redistribution,” in Jess Benhabib, Matthew O. Jackson and Alberto Bisin editors: Handbook of Social Economics, Vol. 1A, The Netherlands: North Holland, pp. 93-131
  2. Bardhan, Pranab. 2002. “Decentralization of Governance and Development,” Journal of Economic Perspectives, 16(4), 185-205.
  3. Besley, Timothy, and Torsten Persson. 2014. “Why Do Developing Countries Tax So Little?”. Journal of Economic Perspectives, 28 (4): 99–120
  4. Chaudhury, Nazmul, Jeffrey Hammer, Michael Kremer, Karthik Muralidharan, and F. Halsey Rogers. 2006. "Missing in Action: Teacher and Health Worker Absence in Developing Countries", Journal of Economic Perspectives, vol. 20(1), pp. 91–116.
  5. Chetty, Raj, and Amy Finkelstein. 2013. “Social Insurance: Connecting Theory to Data,” Chapter 3 in Handbook of Public Economics, Vol 5.
  6. Chetty, Raj, Adam Looney, and Kory Kroft. 2009. “Salience and Taxation: Theory and Evidence.” American Economic Review 99(4): 1145-1177, Section V.C.
  7. Gruber, Jonathan. 2011. Public Finance and Public Policy. Worth Publishers, New York.
  8. La Porta, Rafael and Andrei Schleifer. 2014. “Informality and Development” Journal of Economic Perspectives, Volume 28, Number 3, Pages 109–126
  9. Miguel, Edward, and Michael Kremer. 2004. "Worms: identifying impacts on education and health in the presence of treatment externalities." Econometrica 72.1: 159-217.
  10. Singhal, M. and Luttmer, F.P. 2014. “Tax Morale”.  Journal of Economic Perspectives, 28(4):149-168


Exam (70%, duration: 2 hours) in the main exam period.
Coursework (30%) in the LT.

The course assessment will be based on a final exam (70%) and problem sets (30%).

Key facts

Department: International Development

Total students 2014/15: Unavailable

Average class size 2014/15: Unavailable

Controlled access 2014/15: No

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Leadership
  • Self-management
  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills