Econ 701: Topics in Development Economics
Summer Semester 2024-2025
Department of Economics Sunil Kanwar
Delhi School of Economics Office: Room 126
Office Hours: Tue 10 am - 12 noon
This syllabus, and the readings, are available in the course folder Y:\C701
Internal Evaluation: will comprise a midterm exam worth 30% of the total grade for the
course. The exam will be held in class on 07th October, 2024, from 11:30 am to 12:45 pm.
Course Outline
1. International debt and development
(a) Two-gap models; the transfer problem
• Basu, Kaushik, 2003, Analytical development economics: The less developed economy
revisited, MIT Press, Cambridge, ch. 5, sections 5.2, 5.3
(b) International debt issues; some standard models
• Basu, 2003, op. cit., ch. 6, sections 6.1-6.4
(c) Inoptimal debt – Loan pushing; debt forgiveness; loan buybacks; debt-equity swaps
• Basu, 2003, op. cit., ch. 6, sections 6.5-6.7
• Bulow, Jeremy and Kenneth Rogoff, 1988, The buyback boondoggle, Brookings Papers
on Economic Activity, 2, 645-698 (omit the sections on pp. 683-689, 693-697).
(d) Debt and Development – empirical studies
• Schclarek, Alfredo, 2004, Debt and economic growth in developing and industrial
countries, Working paper, Lund University
• Ozler, S. and G. Tabellini, 1991, External debt and political instability, NBER Working
Paper no. 3772, NBER, Cambrdige, MA, Sections 3, 4
2. Intellectual property rights and development
(a) Overview; TRIPs Agreement; instruments of protection; innovation system
• Maskus, Keith E., 2000, Intellectual Property Rights and the Global Economy, Institute
for International Economics, Washington, D.C., chapters 2, 3 (omit pp. 65-85).
• Stiglitz, Joseph E., 2008, Economic Foundations of Intellectual Property Rights, Duke
Law Journal, 57(6), 1693-1724.
(b) Positive Effects of IPR – technology transfer via licensing, (high-tech) exports, foreign
direct investment; effect on economic activity
• Kanwar, Sunil, 2012, Intellectual Property Protection and Technology Licensing: The
Case of Developing Countries, Journal of Law and Economics, 55(3), 539-564.
• Ivus, Olena, 2010, Do stronger patent rights raise high-tech exports to the developing
world?, Journal of International Economics, 81(1), 38-47.
• Javorcik, Beata S., 2004, The Composition of Foreign Direct Investment and Protection
of Intellectual Property Rights: Evidence from Transition Economies, European
Economic Review, 48(1), 39-62
• Branstetter, Lee, Ray Fisman, C. Foley, Kamal Saggi, 2011, Does Intellectual Property
Rights Reform Spur Industrial Development, Journal of International Economics, 83(1),
27-36.
(c) Negative Effects of IPR: Inadequate patent disclosure; sleeping patents; patent thickets;
patent costs; high drug prices
• Fromer, Jeanne, 2009, Patent Disclosure, Iowa Law Review, 94(2), 539-606.
• Watal, Jayashree, 2000, Pharmaceutical Patents, Prices and Welfare Losses: Policy
Options for India Under the WTO TRIPS Agreement, World Economy, 23(5), 733-752.
3. Wage Rigidity and Unemployment
Theory of implicit cooperation; the labour turnover model; the nutrition-based efficiency
theory of wages
• Basu, K., 2003, op.cit., chs. 9, 10 (omit sections 10.4, 10.5)
• Osmani, S.R., 1991, Wage labour in rural labour markets: The theory of implicit
cooperation, Journal of Development Economics, 34(1-2), 3-23
• Swamy, Anand V., 1997, ‘A simple test of the nutrition-based efficiency wage model’,
Journal of Development Economics, 53(1), 83-98
4. Rural Credit Markets
Lender's risk hypothesis, (traditional) monopolistic markets, all-or-nothing monopoly,
implicit interest charges, credit as insurance, micro-finance
• Pradhan, Narayan C., 2013, Persistence of Informal Credit in Rural India: Evidence
from ‘All-India Debt and Investment Survey’ and Beyond, RBI Working Paper 05/2013.
• Kumar A., Mishra A.K., Saroj S., Joshi P.K., 2017, Institutional versus Noninstitutional
Credit to Agricultural Households in India: Evidence on Impact from a National Farmers’
Survey, IFPRI Discussion Paper 01614 (section 4 only)
• Basu, K., 2003, ch. 13 (omit 13.3).
• Basu, K., 1984, 'Implicit interest rates, usury and isolation in backward agriculture',
Cambridge Journal of Economics, 8(2), 145-159
• Morduch, Jonathan, 1999, The Microfinance Promise, Journal of Economic Literature,
37(4), 1569-1614 (omit sections 5.2, 6, 7)
• Banerjee, Abhijit, E. Duflo, R. Glennerster, and C.G. Kinnan, 2015, The Miracle of
Microfinance? Evidence from a Randomized Evaluation, American Economic Journal:
Applied Economics, 7(1), 22-53
5. Inequality and Development
Effect of inequality on development – theoretical arguments and empirical studies
• Basu, K., 2003, ch. 3.4
• Alesina, A. and R. Perotti, 1996, ‘Income Distribution, Political Instability, and
Investment’, European Economic Review, 40, 1203-1228.
• Alesina, A. and D. Rodrik, 1994, ‘Distributive Politics and Economic Growth’, Quarterly
Journal of Economics, 109(2), 465-490.
• Persson T. and G. Tabellini, 1994, ‘Is Inequality Harmful for Growth?’, 1994, American
Economic Review, 84(3), 600-621.
