Development Economics: theory and Practice provides students and practitioners with the perspectives and the tools they need to think analytically and critically about the current major economic development issues in the world.
Alain de Janvry and Elisabeth Sadoulet identify seven key dimensions of development; growth, poverty, vulnerability, inequality, basic needs, sustainability, and quality of life, and use them to structure the contents of the text. This book gives a historical perspective on the evolution of thought in development. It uses theory and empirical analysis to present readers with a full picture of how development works, how its successes and failures can be assessed, and how alternatives can be introduced. The authors demonstrate how diagnostics, design of programs and policies, and impact evaluation can be used to seek new solutions to the suffering and violence caused by development failures. This text is fully engaged with the most cutting edge research in the field, and equips readers with analytical tools for the impact evaluation of development programs and policies, illustrated with numerous examples. It is underpinned throughout by a wealth of student-friendly features including case studies, quantitative problem sets, end-of-chapter questions, and extensive references.
This unique text aims at helping readers learn about development, think analytically about achievements and alternative options, and be prepared to compete on the development job market.
Author(s): Alain de Janvry, Elisabeth Sadoulet
Series: 1
Year: 0
Language: English
Pages: 526
Tags: Development
Title......Page 3
Copyright......Page 4
Contents......Page 5
List of figures......Page 10
List of tables......Page 14
Preface......Page 16
Acknowledgments......Page 17
INTRODUCTION......Page 19
1 WHAT IS DEVELOPMENT? INDICATORS AND ISSUES......Page 34
SEVEN DIMENSIONS OF DEVELOPMENT......Page 35
INCOME AND INCOME GROWTH......Page 38
POVERTY AND HUNGER......Page 42
INEQUALITY AND INEQUITY......Page 44
VULNERABILITY TO SHOCKS......Page 46
BASIC NEEDS: HUMAN DEVELOPMENT......Page 49
SUSTAINABILITY IN THE USE OF NATURAL RESOURCES......Page 53
QUALITY OF LIFE......Page 54
DEVELOPMENT GOES BEYOND INCOME, BUT CAN INCOME GROWTH DELIVER DEVELOPMENT?......Page 55
CONCLUSION: DEVELOPMENT IS MULTIDIMENSIONAL, SO CAN WE AGREE ON WHAT......Page 56
2 THE STATE OF DEVELOPMENT......Page 61
INCOME GROWTH AND THE CONVERGENCE CLUB......Page 62
POVERTY AND HUNGER......Page 66
INEQUALITY......Page 69
BASIC HUMAN NEEDS......Page 72
SUSTAINABILITY IN RESOURCE USE......Page 74
QUALITY OF LIFE......Page 76
CONCLUSION......Page 78
3 HISTORY OF THOUGHT IN DEVELOPMENT ECONOMICS......Page 82
INTRODUCTION: WHY HISTORY MATTERS......Page 83
BASIC PRINCIPLES IN ANALYSING THE HISTORY OF THOUGHT IN DEVELOPMENT ECONOMICS......Page 84
SELECTED SCHOOLS OF THOUGHT IN DEVELOPMENT......Page 86
THE DIGITAL REVOLUTION AND THE FUTURE OF CONVERGENCE......Page 94
CONCLUSION......Page 95
4 IMPACT EVALUATION OF DEVELOPMENT POLICIES AND PROGRAMS......Page 100
HOW DO WE KNOW WHAT WORKS FOR DEVELOPMENT?......Page 101
EVALUATION SYSTEMS......Page 102
OBJECTIVES AND OVERVIEW OF IMPACT EVALUATION......Page 103
CHALLENGES OF IMPACT EVALUATION......Page 104
EXPERIMENTAL DESIGN-RCT......Page 106
MATCHING METHOD TO CONSTRUCT CONTROL GROUPS: PROPENSITY SCORE MATCHING......Page 110
DIFFERENCE-IN-DIFFERENCES METHOD......Page 112
GENERALIZATION OF THE DIFF-IN-DIFFS APPROACH: ROLL-OUTS WITH PANEL DATA......Page 115
REGRESSION DISCONTINUITY DESIGNS (RDD)......Page 117
EVENT ANALYSIS AND EVENT-SEVERITY ANALYSIS......Page 119
INSTRUMENTAL VARIABLES ESTIMATION: CONTROLLING FOR UNOBSERVABLES WITHOUT A COMPARISON GROUP......Page 120
MAKING IMPACT EVALUATION MORE USEFUL FOR POLICY PURPOSES......Page 121
REGISTERING A PRE-ANALYSIS PLAN......Page 122
QUALITATIVE METHODS......Page 123
PROPENSITY SCORE MATCHING......Page 129
EVENT ANALYSIS......Page 130
INSTRUMENTAL VARIABLES ESTIMATION......Page 131
THE TEMPTATIONS OF CROSS-COUNTRY REGRESSIONS......Page 132
ECONOMETRIC ISSUES IN CROSS-COUNTRY REGRESSIONS......Page 133
MACRO-LEVEL IMPACT EVALUATION: WHAT CAN BE DONE?......Page 134
5 POVERTY AND VULNERABILITY ANALYSIS......Page 135
CHARACTERIZE WELFARE: CHOICE OF AN INDICATOR OF WELLBEING......Page 136
SEPARATING THE POOR FROM THE NON-POOR: CHOOSING A POVERTY LINE (Z)......Page 138
DESCRIBE POVERTY: POVERTY PROFILE AND CORRELATES OF POVERTY......Page 140
MEASURING POVERTY: CHOOSING A POVERTY INDICATOR......Page 142
DYNAMICS OF POVERTY AND VULNERABILITY: TRANSITORY AND CHRONIC POVERTY......Page 147
OTHER ASPECTS OF POVERTY......Page 151
THE GEOGRAPHY OF POVERTY: POVERTY MAPS......Page 152
REDUCING POVERTY: THE RELATIVE ROLES OF INCOME GROWTH AND SOCIAL PROGRAMS......Page 153
HOW DO THE EXTREME POOR LIVE?......Page 156
ARE THERE BEHAVIORAL POVERTY TRAPS?......Page 158
6 INEQUALITY AND INEQUITY......Page 164
DESCRIBING AND MEASURING INEQUALITY......Page 165
DECOMPOSING INEQUALITY......Page 167
RELATIONSHIP BETWEEN LEVEL OF INCOME (GDPpc) AND INEQUALITY: EMPIRICAL EVIDENCE ON THE KUZNETS INVERTED U-CURVE......Page 168
THE ALVAREDO–ATKINSON–PIKETTY–SAEZ CRITIQUE......Page 169
IMPACT OF GDPpc GROWTH ON POVERTY AND INEQUALITY......Page 170
IMPACT OF INEQUALITY ON GROWTH: NINE CAUSAL CHANNELS......Page 173
CAN GREATER INEQUALITY BE A SOURCE OF EFFICIENCY GAINS?......Page 177
WHAT ROLES FOR ETHNIC FRACTIONALIZATION AND GENETIC DIVERSITY?......Page 178
WHAT ROLE FOR EQUITY IN DEVELOPMENT?......Page 179
INCLUSIVE GROWTH......Page 180
CONCLUSION: THE GROWTH-INEQUALITY-POVERTY DEVELOPMENT TRIANGLE......Page 181
7 INTERNATIONAL TRADE AND INDUSTRIALIZATION STRATEGIES......Page 188
TRADE OPENNESS......Page 189
GAINS FROM TRADE: WHY COUNTRIES TRADE, BUT NOT EVERYONE GAINS......Page 191
ABSOLUTE, COMPARATIVE, AND COMPETITIVE ADVANTAGE......Page 194
TRADE POLICY AND INDICATORS OF PROTECTION......Page 196
USING TRADE POLICY FOR DEVELOPMENT: TARIFFS AND SUBSIDIES......Page 199
DYNAMIC GAINS FROM TRADE: IMPORT-SUBSTITUTION INDUSTRIALIZATION AS A POLICY GAMBLE......Page 201
TRADE AND INDUSTRIALIZATION STRATEGIES: HOW TO CHOOSE?......Page 202
IS TRADE GOOD FOR GROWTH?......Page 204
IS TRADE GOOD FOR POVERTY REDUCTION?......Page 205
TRADE AND THE ENVIRONMENT......Page 206
TRADE AND FOOD SECURITY......Page 209
DECLINE OF THE WTO AND THREATS TO MULTILATERALISM......Page 210
8 EXPLAINING ECONOMIC GROWTH: THE MACRO LEVEL......Page 214
THE GROWTH PUZZLE......Page 215
GENERIC MODELING OF INCOME GROWTH......Page 216
CAPITAL ACCUMULATION FOR GROWTH: THE HARROD-DOMAR MODEL......Page 218
PRODUCTIVITY GROWTH AND FACTOR DEEPENING: GROWTH ACCOUNTING IN THE SOLOW MODEL......Page 220
THE ROLE OF AGRICULTURE IN GROWTH: STRUCTURAL TRANSFORMATION......Page 223
THE ROLE OF AGRICULTURE IN GROWTH: DUAL-ECONOMY MODELS......Page 224
THE ROLE OF AGRICULTURE IN GROWTH: OTHER MODELS......Page 227
APPENDIX 8.1: SOLUTION TO THE SOLOW GROWTH MODEL......Page 231
9 ENDOGENOUS ECONOMIC GROWTH......Page 233
EXPLAINING GROWTH......Page 234
THE COORDINATION PROBLEM IN GROWTH......Page 236
STRUCTURAL DETERMINANTS OF GROWTH......Page 238
BEHAVIORAL DETERMINANTS OF GROWTH......Page 241
CONCLUSION......Page 243
10 INTERNATIONAL FINANCE AND DEVELOPMENT......Page 248
EXCHANGE RATES AND DEVELOPMENT......Page 249
COUNTRY CURRENCIES......Page 250
DEFINITIONS: NOMINAL, REAL, AND REAL EFFECTIVE EXCHANGE RATES......Page 251
EXCHANGE-RATE REGIMES......Page 253
IMPACT OF A CHANGE IN THE RER ON REAL BALANCES......Page 256
THREE EXAMPLES OF EXCHANGE-RATE SHOCKS......Page 258
11 POPULATION AND DEVELOPMENT......Page 264
DEFINITIONS: DEMOGRAPHIC CONCEPTS......Page 265
SOME DATA FOR WORLD POPULATION......Page 268
HISTORY OF WORLD POPULATION AND DEMOGRAPHIC TRANSITION......Page 269
CAUSES OF POPULATION GROWTH......Page 270
POPULATION POLICY......Page 275
OTHER ISSUES IN POPULATION AND DEVELOPMENT......Page 277
12 LABOR AND MIGRATION......Page 281
LABOR AND EMPLOYMENT......Page 282
RURAL-URBAN MIGRATION......Page 284
IMPACTS OF MIGRATION......Page 292
CONCLUSION......Page 296
13 FINANCIAL SERVICES FOR THE POOR......Page 301
THE MICROFINANCE REVOLUTION......Page 302
THE GENERIC-LENDER PROBLEM......Page 303
COMMERCIAL BANKS......Page 304
LOCAL MONEYLENDERS, OR "USURERS"......Page 305
INFORMAL MICROFINANCE INSTITUTIONS: ROSCAS......Page 306
MICROFINANCE WITH GROUP LENDING......Page 307
VILLAGE BANKS AND SELF-HELP GROUPS......Page 309
MFIs WITH INDIVIDUAL LOANS: PROXIMITY LENDING......Page 310
LOCAL SOURCES OF CREDIT BASED ON INTERLINKAGES IN VALUE CHAINS......Page 311
OTHER ISSUES IN MICROFINANCE LENDING......Page 312
CAN THE POOR BE INSURED? THE PROMISE OF INDEX-BASED WEATHER INSURANCE......Page 314
CAN THE POOR SAVE? OFFERING SAVINGS OPPORTUNITIES AND INCENTIVES......Page 318
FACILITATING MONEY TRANSFERS......Page 320
CONCLUSIONS ON MFIs: HOW USEFUL ARE THEY FOR POVERTY REDUCTION?......Page 321
14 SOCIAL-ASSISTANCE PROGRAMS AND TARGETING......Page 326
SOCIAL ASSISTANCE IN POVERTY-REDUCTION STRATEGIES......Page 327
A TYPOLOGY OF SOCIAL-ASSISTANCE PROGRAMS......Page 328
THE TARGETING OF SOCIAL PROGRAMS: BENEFITS AND COSTS......Page 330
ERRORS IN TARGETING: EXCLUSION (TYPE I) AND INCLUSION (TYPE II) ERRORS......Page 331
TARGETING METHODS......Page 332
QUALITY OF TARGETING......Page 337
TRADE-OFFS IN TARGETING......Page 338
USING SOCIAL-SAFETY-NET (SSN) PROGRAMS FOR EFFICIENCY GAINS AND GROWTH......Page 341
IMPACT EVALUATION OF SOCIAL PROGRAMS: SOME EXAMPLES......Page 342
15 SUSTAINABLE DEVELOPMENT AND THE ENVIRONMENT......Page 348
LINKS BETWEEN DEVELOPMENT, RESOURCE CONSERVATION, AND ENVIRONMENTAL SUSTAINABILITY......Page 349
NEGATIVE EXTERNALITIES......Page 351
INCOMPLETE PROPERTY RIGHTS......Page 355
PUBLIC GOODS......Page 357
DISCOUNTING: PRIVATE VS. SOCIAL, AND EXPONENTIAL VS. HYPERBOLIC......Page 358
THE SUSTAINABILITY OBJECTIVE......Page 359
DILEMMAS IN THE ENVIRONMENT-DEVELOPMENT RELATION......Page 360
INTRODUCING NEW MARKETS: PAYMENTS FOR ENVIRONMENTAL SERVICES......Page 362
16 COMMON PROPERTY RESOURCES AND DETERMINANTS OF COOPERATION......Page 368
WHY ARE THERE COMMON PROPERTY RESOURCES?......Page 369
ECONOMICS OF CPR USE......Page 370
GROUNDS FOR PESSIMISM ABOUT COOPERATIVE BEHAVIOR......Page 371
COOPERATIVE OUTCOMES IN NON-COOPERATIVE GAMES......Page 372
DETERMINANTS OF COOPERATION AND COLLECTIVE ACTION......Page 374
WHY SECURE PROPERTY RIGHTS OVER LAND MATTER FOR ECONOMIC DEVELOPMENT......Page 377
BEHAVIORAL GAMES IN DEVELOPMENT ECONOMICS......Page 378
17 HUMAN CAPITAL: EDUCATION AND HEALTH......Page 383
WHY ARE EDUCATION AND HEALTH IMPORTANT FOR DEVELOPMENT?......Page 384
INDICATORS AND STATUS OF EDUCATION......Page 385
WHAT DETERMINES THE LEVELS OF SCHOOLING?......Page 387
RETURN TO EDUCATION......Page 391
CCT PROGRAMS: OPORTUNIDADES AS A CASE STUDY......Page 392
INDICATORS AND STATUS OF HEALTH......Page 394
WHAT DETERMINES HEALTH ACHIEVEMENTS?......Page 396
IMPACT OF HEALTH ON DEVELOPMENT OUTCOMES......Page 398
HEALTH POLICIES......Page 400
18 AGRICULTURE FOR DEVELOPMENT......Page 410
AGRICULTURE FOR DEVELOPMENT......Page 411
THE STATE OF WORLD AGRICULTURE......Page 415
DETERMINANTS OF AGRICULTURAL GROWTH......Page 419
FOOD SECURITY IN DEVELOPING COUNTRIES......Page 425
THE POLITICAL ECONOMY OF AGRICULTURE FOR DEVELOPMENT......Page 427
19 DEVELOPMENT AID AND ITS EFFECTIVENESS......Page 432
OVERVIEW......Page 433
AID IN A HISTORIAL PERSPECTIVE......Page 434
THE EVOLUTION OF FOREIGN AID......Page 436
FUNGIBILITY OF FOREIGN AID......Page 437
AID EFFECTIVENESS FROM A MACRO PERSPECTIVE......Page 439
EVALUATING THE IMPACT OF FOREIGN AID FROM A MICRO PERSPECTIVE......Page 441
THE PRACTICE OF FOREIGN AID......Page 442
AID STRATEGIES FOR GREATER EFFECTIVENESS: WHAT CAN BE DONE?......Page 445
THE DEBATE ON FOREIGN AID......Page 447
CONCLUSION: TOWARD A NEW AID ARCHITECTURE......Page 449
20 INSTITUTIONAL INNOVATIONS AND DEVELOPMENT......Page 455
INSTITUTIONS AND DEVELOPMENT......Page 456
ASSUMPTIONS UNDERLYING THE NEW INSTITUTIONAL ECONOMICS......Page 457
MARKET FAILURES INDUCED BY TRANSACTION COSTS......Page 458
INSTITUTIONAL RESPONSES TO MARKET FAILURES......Page 459
MECHANISMS OF INSTITUTIONAL CHANGE......Page 460
AN EXAMPLE OF INSTITUTIONAL CHOICE: SHARECROPPING CONTRACTS......Page 462
OTHER EXAMPLES OF INSTITUTIONAL INNOVATIONS THAT HELP REDUCE TRANSACTION COSTS AND/OR COMPENSATE FOR MARKET FAILURES......Page 467
21 POLITICAL ECONOMY AND THE ROLE OF THE STATE......Page 471
INTRODUCTION......Page 472
THE FUNCTIONALIST STATE......Page 474
THE PLURALIST STATE: PUBLIC CHOICE......Page 476
ECONOMICS OF PUBLIC AUTHORITY: RENT-SEEKING, POLITICAL INFLUENCE, AND CORRUPTION......Page 481
SEVEN STRATEGIES TO LIMIT RENT-SEEKING......Page 483
PUBLIC EXPENDITURES AND DEVELOPMENT: THE ROLE OF INFRASTRUCTURE......Page 485
22 THE ECONOMICS OF FARM HOUSEHOLDS......Page 490
IMPORTANCE OF FARM HOUSEHOLDS......Page 491
DEFINITIONS OF FARM HOUSEHOLDS......Page 493
FARM-HOUSEHOLD-BEHAVIOR MODELS......Page 496
RESPONSES TO MARKET SIGNALS: SEPARABILITY......Page 498
NET BUYERS, NET SELLERS, AND FOOD SECURITY......Page 499
ACCESS TO LAND: THE ROLE OF LAND REFORM......Page 501
CAN THE FAMILY BE COMPETITIVE AND SURVIVE......Page 503
RISK AND SELF-INSURANCE IN HOUSEHOLD BEHAVIOR......Page 506
INTRA-HOUSEHOLD ALLOCATION OF RESOURCES AND GENDER ROLES......Page 508
Index......Page 513
