DV492      Half Unit
Economic Development Policy III: Government Policy Analysis

This information is for the 2021/22 session.

Teacher responsible

Dr Joana Naritomi CON.6.12


This course is available on the 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 Environmental Policy, Technology and Health (Environmental Economics and Climate Change) (LSE and Peking University), 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.


This course is delivered through a combination of lectures and seminars in the LT. Seminars will be at or upwards of 45 minutes duration and lectures will be at or above 60 minutes duration. There will also be a revision session in the LT or early ST.

Student on this course will have a reading week in Week 6.

Formative coursework

Students will be expected to produce 1 problem sets and 1 exercise in the LT.

Indicative reading

1. Bandiera, O. , Prat, A. and Valletti, T. 2009. "Active and Passive Waste in Government Spending: Evidence from a Policy Experiment." American Economic Review, 99(4): 1278-1308.

2. Besley, T. and Ghatak. 2004. “Public Goods and Economic Development”. in Policies for Poverty Alleviation (ed.) Abhijit Banerjee, Roland Benabou, and Dilip Mookherjee.

3. Cohen, J, Dupas, P and Schaner, S. 2015. “Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial” American Economic Review, 105(2): 609–645.

4. Duflo, E, Hanna, R and Ryan, S. 2012. "Incentives Work: Getting Teachers to Come to School." American Economic Review, vol. 102(4), pp. 1241 –78.

5. Chetty, R and Looney, A (2005) "Income Risk and the Benefits of Social Insurance: Evidence from Indonesia and the United States" in Ito, T and Rose, A K, Fiscal Policy and Management in East Asia, NBER-EASE, Volume 16, University of Chicago Pres.

6. Gordon, R. and Li, W. 2009. "Tax structures in developing countries: Many puzzles and a possible explanation," Journal of Public Economics, 93(7), pp.855-866.

7. Gruber. J. 1994. “The Incidence of Mandated Maternity Benefits,” American Economic Review, 84(3), 622-641.

8. Miguel, Edward, and Michael Kremer. 2004. "Worms: identifying impacts on education and health in the presence of treatment externalities." Econometrica 72.1: 159-217.

9. Pomeranz, Dina. 2015. "No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax." American Economic Review, 105(8): 2539-69.

10. Singhal, M and Luttmer, Erzo F.P. 2011. “Culture, Context, and the Taste for Redistribution“ American Economic Journal: Economic Policy, 3(1):157-79.


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

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

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Important information in response to COVID-19

Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: International Development

Total students 2020/21: 52

Average class size 2020/21: 17

Controlled access 2020/21: Yes

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
  • Commercial awareness
  • Specialist skills