DV492      Half Unit
Economic Development Policy III: Government Policy Analysis

This information is for the 2023/24 session.

Teacher responsible

Dr Joana Naritomi CON.6.12


This course is available on the MSc in Anthropology and Development, MSc in Development Management, MSc in Development Management (LSE and Sciences Po), MSc in Development Studies, MSc in Economic Policy for International Development, 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 Health and International Development, 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.


Students must have completed Foundations of Applied Econometrics for Economic Development Policy (DV494).

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 WT. 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 WT or early ST.

Formative coursework

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

Indicative reading

1. Alatas, V., Purnamasari, R., Wai-Poi, M., Banerjee, A., Olken, B. A., & Hanna, R. (2016). “Self-targeting: Evidence from a field experiment in Indonesia.” Journal of Political Economy, 124(2), 371-427.

2. Baird, Sarah, Craig McIntosh, and Berk Özler. "Cash or condition? Evidence from a cash transfer experiment." The Quarterly journal of economics 126, no. 4 (2011): 1709-1753.

3. 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.

4. Besley, T and Persson.T. 2014. “Why Do Developing Countries Tax So Little?. Journal of Economic Perspectives, 28 (4): 99–120

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

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

8.Jensen, Anders. 2022. "Employment Structure and the Rise of the Modern Tax System." American Economic Review, 112 (1): 213-34.

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.Weigel, J.L., 2020. The participation dividend of taxation: How citizens in Congo engage more with the state when it tries to tax them. The Quarterly Journal of Economics, 135(4), pp.1849-1903.


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

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

Student performance results

(2019/20 - 2021/22 combined)

Classification % of students
Distinction 28.8
Merit 63.2
Pass 7.4
Fail 0.6

Key facts

Department: International Development

Total students 2022/23: 32

Average class size 2022/23: 16

Controlled access 2022/23: Yes

Lecture capture used 2022/23: Yes (LT)

Value: Half Unit

Guidelines for interpreting course guide information

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.

Personal development skills

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