Econ 326, Economic Growth and Development, Spring 2006 Kirsten K. Madden, Ph.D.

Tuesday, Thursday 11:00 a.m. - 12:15 p.m. Office: 379 McComseyHH

McComsey Hall Room 202 Office Phone: 872-3576

Office Hours: MWF 10-10:50; H 12:20-1:20; F 12-1:30 & by appointment kirsten.madden@millersville.edu

Course Prerequisites. Econ 101, 102.

Overview of Course. This course is an introductory survey of economic development. The focus of this course concerns issues and problems faced by the broad group of countries commonly classified as “developing” in western thinking (also commonly referred to as the “Third World”, the “South”, or as LDCs—“less developed countries”.) There is a diverse array of perspectives about economic development, ranging from western-imported market driven, trade friendly, macro growth ideals to small-scale, participatory, endogenous, holistic, hybrid, human development approaches. Our focus begins with the foundations of economic development. That is, we critically question what development means from various perspectives, and study characteristics of Third World economies. We critically review standard measurements of economic development and critically examine the main theories of market-centered economic development. We cover the interaction between development and the physical environment. Finally we turn our attention to international issues associated with Third World economies. This year the course will take on a particularly schizophrenic flavor, as we learn about both traditional western development and related criticisms derived from the evolving alternatives.

General Learning Goals/Objectives. This course addresses the following basic learning objectives in the Economics Department Curriculum:

*Exposure to the open economy (e.g., in the international context.) The ability to recognize, explain, apply in a real world context and critique: (1) fundamental theories and concepts of international trade such as comparative advantage and protectionism; (2) various economic institutions of the open economy; and (3) fundamental theories and concepts associated with economic development.

*Exposure to various perspectives within economic thought. The ability to recognize, explain, apply in a real world context, and critique (1) economics paradigms such as capitalism and market analysis; (2) various economic institutions and economic systems; (3) economic theories derived from various economic paradigms and systems; and (4) the historical basis for economic paradigms, systems, theories, and institutions

*Develop and apply research and information management skills, including (1) locating primary and secondary economic sources of information with traditional and emerging library technologies; (2) evaluating the quality of a research source; (3) summarizing the content of a research source; (4) synthesizing, analyzing, and critiquing information across research sources; (5) creating a working hypothesis using economic modeling skills; (6) evaluating a working hypothesis using qualitative, logical, and quantitative methods; and (7) recognizing the benefits and limitations to understanding attained from economic methods of analysis.

*Develop and apply writing and presentation skills using various pedagogical devices such as research papers, verbal presentation methods, and modern technology.

Students will also have an opportunity to develop the ability to work in a team setting.

Textbook/Readings. You are required to purchase one book, available at the student store:

Todaro, Michael P. & Stephen C. Smith (2006), Economic Development, New York: Addison, Wesley, Longman, 9th ed.

In addition to this book, a number of other essays will be required reading. All of the readings listed below are required with the exception of a few optional readings that are denoted by an asterisk (*). The additional readings listed below are available through the Ganser Library electronic reserve service. You may access the readings in two ways. Directly type in the address: http://reserve.millersville.edu/coursepage.asp?cid=232&page=01 and then click “accept”; type in the course password (9777) to get to the list of reserve readings. Alternatively, you may access the readings by following these links: from the MU homepage, click “library”; pull down “E Reserve” from the pull-down menu located in the middle-top of the web-page (note: if you click on the “e reserve” link under the “Library Services” menu, you have to click on the link, “Finding Materials on Reserve for a Course”); select an instructor (Madden) and click “view”; click on any of the highlighted link for Econ 326; type in the course password (9777, the course number from the class schedule booklet). You will then see a list of the reserve articles and you may choose the article you would like to review to read or print. Please note that some of the readings are divided into two files (for electronic reasons)—always check to make sure you are getting the full reading assigned. Additionally, a few of the required readings are available at websites on the Internet. Please let me know immediately if you have problems accessing the electronic readings.

Course Requirements

1. The outline below gives a description of the topics and readings for this course. You are required to keep up with the reading. Readings with an asterisk (*) are optional, unless otherwise established during class. There is a phenomenal amount of research concerning economic development; the reading list may expand over the semester if additional suitable material is found. Any changes made to the outline (e.g., topics covered or assigned readings) will be announced in class.

2. Homework/Class Participation. Economic literacy requires active participation. To stimulate active learning, homework questions and problems will be assigned periodically throughout the course. Some of these assignments will form the basis for class discussion; these assignments will be checked upon entry to class. Homework assignments and class participation will contribute 20% toward the final course grade.

Homework will be assigned during class and, unless otherwise informed, will be due at the beginning of the next class meeting. You are responsible for keeping up with these assignments; if you are late to class or miss a class, I recommend that you check with me or another class member to determine if homework has been assigned. The highest number of points you may receive for a problem set is 10. Unless otherwise notified, a problem set will be accepted up to one class period after the official due date with a penalty: the highest number of points possible for a late problem set is 8. (Example: if the assignment is made on Monday, it is due on Wednesday; the latest you may hand it in for credit is the following Monday. A grade of 8 is the maximum grade you could earn for the problem set handed in a day late.) If you miss class on days in which the homework assignment constitutes the foundation for class discussion, the highest number of points possible will be 6 (e.g., you are penalized an extra 2 points for not being available to share your insights with the class.) You will be notified as to which homeworks will constitute the foundation for class discussion on a homework-by-homework basis.

3. The research project will constitute 20% of your course grade. More details are provided regarding the research project on a separate handout.

4. Midterm Examinations. Two midterm exams will be given during the semester—one is take-home; the second will take place in-class. The dates are given below. These exams each count as 20% of your course grade. Missing an exam without a VALID excuse will result in a zero. Excuses for missing an exam must be given in writing to me with appropriate verification (from doctor, police, etc.)

5. Final Examination. The final exam will be held during the regularly scheduled exam period: Monday, May 8, 8:00 – 10:00 a.m. All students in this course are required to take the final at this scheduled time. This exam counts as 20% of your course grade.

6. In all class-related activities, students are expected to act honestly in accordance with the Millersville University “Academic Honesty and Dishonesty” policy statement.

Exam Schedule & Grade Distribution

Contribution to

Activity Date Course Grade^

Midterm Exam I Tuesday February 14, 2006 20%

Midterm Exam II Tuesday, March 21, 2006 20%

Homework/Class Participation 20%

Research Project 20%

Final Exam Monday, May 8, 2006, 8:00 – 10:00 a.m. 20%

End of Semester Grade 100%

^Typically, whole letter grades are distributed on a ten percent scale, e.g., 90-100 is an A, 80-89 is a B,…, below 60 is an F. Plusses are typically _8 and _9’s and minuses are typically _1, and _2’s within each letter grade. I reserve the right to make adjustments to this typical grading scheme as grading outcomes for this class unfold.

Reading List

Unless otherwise established during class, readings with an asterisk (*) are optional.

I. Introduction: What is Economic Development?

Escobar, Arturo (1995) Chapter 1, “Introduction: Development and the Anthropology of Modernity” Encountering Development: The Making and Unmaking of the Third World. Princeton: Princeton Univ. Press, pp. 3-20. On reserve under “Chap 1: Introduction: Development and the Anthropology of Modernity.”

Wolfgang Sachs (1992), “Bygone Splendour.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 156-161. On reserve under “Bygone Splendor.”

*Rahman, Anisur (1992). “People’s Self-Development.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 167-178.

Narayan, Deepa, Robert Chambers, Meera K. Shah and Patti Petesch. (2000). Chapter 1, “Perspectives of the Poor” in Voices of the Poor: Crying out for Change, Oxford, England: Oxford University Press for the World Bank, pp. 1-20. On reserve.

Also Available at: http://www.worldbank.org/poverty/voices/reports.htm#crying

Narayan, Deepa and Patti Petesch (2000), Voices of the Poor: From Many Lands. New York, published for the World Bank. Two or more of the following country-specific case studies: Ch. 2, Ghana; Ch. 3, Malawi; Ch. 4, Nigeria; Ch. 5, Bangladesh; Ch. 6, India; Ch. 7, Indonesia; Ch. 12, Argentina; Ch. 13, Brazil; Ch. 14, Ecuador; or Ch. 16, Jamaica. Only available via the Internet. The current direct link to this book is: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,contentMDK:20619315~menuPK:336998~pagePK:148956~piPK:216618~theSitePK:336992,00.html

From Many Lands case studies can also be accessed indirectly via the following links:

http://www.worldbank.org/poverty/voices/reports.htm#crying which will take you to the “PovertyNet Home” page; click on “Voices of the Poor (right hand side link); click on “Global studies and background reports” (middle of page); & click on “From Many Lands.”

Note: the direct web address for the “PovertyNet Home” page is: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,menuPK:336998~pagePK:149018~piPK:149093~theSitePK:336992,00.html

Todaro & Smith, Chapter 1, “Economics, Institutions, and Development: A Global Perspective” (textbook)

Lutz, Mark (1992), “A Humanistic Approach to Socio-Economic Development.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 165-167. On reserve under “Humanistic Approach to Socio-Economic Development.”

Alkire, Sabina “Dimensions of Human Development,”, World Development 30:2 (2002), pp. 181-205. On reserve in 2 parts under “Dimensions of Human Development” Parts 1 and 2.

Narayan, Deepa, Robert Chambers, Meera K. Shah and Patti Petesch. (2000). Chapter 2, “Wellbeing and Illbeing: The Good and Bad Life” in Voices of the Poor: Crying out for Change, Oxford, England: Oxford University Press for the World Bank, pp. 21-45. On reserve under “Chapter 2: Wellbeing and Illbeing: The Good and the Bad Life.”

Also available via the Internet. Crying out for Change can also be accessed indirectly via these links:

http://www.worldbank.org/poverty/voices/reports.htm#crying which will take you to the “PovertyNet Home” page; click on “Voices of the Poor (right hand side link); click on “Global studies and background reports” (middle of page); & click on “Crying Out for Change.”

Note: the direct web address for the “PovertyNet Home” page is: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,menuPK:336998~pagePK:149018~piPK:149093~theSitePK:336992,00.html

Narayan, Deepa, Robert Chambers, Meera K. Shah and Patti Petesch. (2000). Chapter 11, “Powerless, Trapped in a Many-Stranded Web” in Voices of the Poor: Crying out for Change, Oxford, England: Oxford University Press for the World Bank, pp. 325-262. On reserve under “Chapter 11: Powerless, Trapped in a Many-Stranded Web.”

Also available via the Internet following instructions directly above.

Max-Neef, Manfred (1992). “Development and Human Needs.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 197-214. On reserve under “Development and Human Needs.”

Todaro & Smith, Chapter 2, “Diverse Structures and Common Characteristics of Developing Nations.” (textbook)

*Sen, Amartya, "Development: Which Way Now?" The Political Economy of Development and Underdevelopment, Kenneth P. Jameson and Charles K. Wilber, eds. New York: McGraw Hill, 6th ed. pp. 7-28. Reprinted from Economic Journal, 93 (December 1983) pp. 745-62. On reserve.

*Gall, Peter, "What Really Matters--Human Development," The Political Economy of Development and Underdevelopment, Kenneth P. Jameson and Charles K. Wilber, eds. New York: McGraw Hill, 6th ed., pp. 530-538. Reprinted from World Development (UNDP) 3:3, pp. 4-12. On reserve.

*Ranis, Gustav and Frances Stewart. Sections 1 and 2 of “Economic Growth and Human Development,” World Development 28:2 (2000), pp. 197-219. On reserve in 2 parts.

*Max-Neef, Manfred, A. Elizalde and M. Hopenhayn (1989), “Human Scale Development: an Option for the Future” Development Dialogue, pp. 5-81.

II. Economic Indicators. Measurement Issues, Growth, Income Distribution and Poverty

Todaro & Smith, Appendix to Chapter 2, “Components of Economic Growth”. (textbook)

Todaro & Smith, Chapter 5, “Poverty, Inequality, and Development.” (textbook)

Thorbecke, Erik and Chutatong Charumilind (2002). “Economic Inequality and Its Socioeconomic Impact” (portions). World Development 30(9), pp. 1477-1495. On reserve under “Economic Inequality and Its Socioeconomic Impact.”

Sachs, Wolfgang (1992), “Poor not Different.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 161-165. On reserve under “Poor Not Different.”

*Ekins, Paul and Manfred Max-Neef (1992), “Indicators of Development: Constructing an Indicator Framework.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 231-239. On reserve (e-listed as “Constructing…”).

*Miles, Ian (1992), “Social Indicators for Real-Life Economics.” In Paul Ekins and Manfred Max-Neef, eds., Real-Life Economics: Understanding Wealth Creation. London and New York: Routledge, pp. 283-300. On reserve.

III. Development Theories

Todaro & Smith, Chapter 3 “Classic Theories of Development: A Comparative Analysis.” (textbook)

Burns, E. Bradford "The Modernization of Underdevelopment: El Salvador, 1858-1931," PEDU, pp. 125-150. Reprinted from Journal of Developing Areas, no. 18 (April 1984) pp. 293-316. On reserve under “Modernization of Underdevelopment: El Salvador, 1858-1931.”

*Escobar, Arturo (1995). Section providing a sum/critique of early development models in chapter 3. In Encountering Development: The Making and Unmaking of the Third World. Princeton: Princeton Univ. Press, pp. 83-85. On reserve.

*"The Development of Underdevelopment," Andre Gunder Frank, PEDU, pp. 105-115. Reprinted from Monthly Review, 18:4 (September 1966) pp. 17-31. On reserve.

IV. Environment and Development

Todaro and Smith, Ch. 10, “The Environment and Development.” (textbook)

Todaro and Smith, Ch. 17, “Some Critical Issues for the Twenty-First Century,” pp. 789-796. (textbook)

V. International Trade, Growth, Development and Economic Policy

Todaro & Smith, Chapter 12, “Trade Theory and Development Experience.” (textbook)

Todaro & Smith, Chapter 13, “The Trade Policy Debate: Export Promotion, Import Substitution…” (textbook)

VI. Balance of Payments, Debt and Stabilization Policy, Foreign Investment and Aid

Todaro & Smith, Chapter 14, “Balance of Payments, Developing-Country Debt, and the Macroeconomic Stabilization Controversy” & Appendix 14.1, “A Brief History and Analysis of the International Monetary Fund & the World Bank.” (textbook)

Todaro & Smith, Chapter 15, “Foreign Finance, Investment, and Aid: Controversies and Opportunities.” (textbook)

*Escobar, Arturo (1995). Section entitled “The World Bank: An Exemplar of Development” in chapter 5. In Encountering Development: The Making and Unmaking of the Third World. Princeton: Princeton Univ. Press, pp. 163-167. On reserve.

*Easterly, W. (2002). “How Did Heavily Indebted Poor Countries Become Heavily Indebted? Reviewing Two Decades of Debt Relief.” World Development 30(0), pp. 1677-1696. On reserve.