Cycle du diplôme - Module de spécialisation

Cours de Jorge Braga de Macedo et Angel Calderón-Madrid

(semestre d'automne 2002-2003)

Contacts :

Responsable pédagogique : Alexia de Monterno, alexia.demonterno@sciences-po.fr

Secrétariat : Joelle Delafontaine, joelle.delafontaine@sciences-po.fr

Jorge Braga de Macedo, President of the OECD Development Center and associate Professor at IEP Paris

Angel Calderón-Madrid, Consultant at the OECD Development Center and invited Professor at IEP Paris

To use relevant economic literature, both analytical and empirical in order to apply economic reasoning to real world problems in countries where institutions and cultures may differ from those in developed countries.

To write short essays on particular development problems, to present and discuss these essays among peers and to interact with teachers and guest speakers in order to formulate and advocate solutions to those problems.

The issues selected in this course are based on the implications of economic analysis in devising concrete development policies under globalization. Case studies are presented showing in a practical way the consequences of development thinking, as it evolved from the Marshall plan to the "Monterrey Consensus". Policies relating to the global architecture and to the scope for regional integration are also covered, stressing the portability of European and OECD experiences with peer pressure.

Formal and informal institutions are interpreted as political and economic governance solutions, at the national, regional and global levels. It is explained how these institutions interact with political democracy, economic growth and poverty alleviation, as well as how coordination failures among agents' actions and expectations lead to unsatisfactory development outcomes, corruption and the resistance to reforms and institutional changes. Expectations of better governance in the future also help build reputation for appropriate policies in some institutional setups rather than in others, illustrating the benefits of policy credibility.

It is seen how human capital, adaptive capacity and technology may determine whether or not a national development path provides the highest attainable social welfare, pointing to the factors whereby lower income countries may grow faster than higher income ones, bringing about a convergence in the living standards of their resident populations.

Case studies draw on the experience of the OECD in formulating and advocating appropriate policies for its member countries and on outcomes in developing countries which have been researched at the OECD Development Centre.

Lectures presenting theoretical and policy oriented material during 14 two-hour lectures. The remaining sessions will be devoted to review of the materials, to presentations by guest speakers, to class discussion and exams.

Most of the readings come from three OECD publications:

Jorge Braga de Macedo, Colm Foy and Charles P. Oman editors (2002) "Development Is Back":

OECD Development Centre, forthcoming. (Henceforth referred to as Redux).

OECD (2002) African Economic Outlook. (Henceforth referred to as AEO).

Angus Maddison (2001) "The World Economy A Millenial Perspective". OECD.

and from:

Debraj Ray (1998) "Development Economics". Princeton University Press. (Henceforth referred to as DR).

Optional readings for each class will be provided.

In-class presentation by each student of an essay on a topic of his/her choice, followed by peer review (total duration one hour). Mid-term and final exams including questions drawn from material covered in the lectures, presentation and class discussion. The motivation for the topic chosen for the essay will be part of the midterm exam.

Mid-term examination (30%)

Essay (30%)

Final examination (40%)

Daniel Cohen "Growth in Theory and Practice" in Redux.

Jean-Claude Berthélemy "Convergence Clubs and Under-development Traps" in Redux.

Angus Maddison "The West and the Rest in the International Economic Order" in Redux

DR Chapter 2 .

Angus Maddison (2001) pp. 17-25.

Jorge Braga de Macedo (2002) "Develop Redux: Reflections for a New Paradigm" Mimeo September.

Pranab Bardhan (2000) "Understanding Underdevelopment: Challenges for Institutional Economics from the Point of View of Poor Countries" in Deutsche Stiftung fur Internationale Entwitklung.DSE Villa Borsig Workshop Series, available in http://www.dse.de/ef/instn/bardhan.htm

World Bank Development Report 2002: "Building Institutions for Markets" The World Bank Washington D. C. Chapter 1. Available at http://econ.worldbank.org/wdr/WDR2002/text-2394/

Paul Milgrom. Douglass North and Barry Weingast (1990) "The role of Institutions in the Revival of Trade: The law merchants, private judges, and the Champagne fairs" in Economics and Politics 2, pp. 1-23.

DR Appendix 1, pp.757-766.

Jorge Braga de Macedo, Colm Foy and Charles P. Oman in Redux.

DR chapter 5.

Acemaglu, Daron (2002) Lecture Notes for "The Political Economy of Institutions and

Development course at MIT". February. Chapter 1: sections 1.1- 2.1 and section 3 (pp.3- 18 and pp. 27-29). Available at:

http://econ-www.mit.edu/faculty/acemoglu/files/courses/notes3newwithpics.pdf.

Dixit, A. (1996) "The Making of Economic Policy: A Transaction-Cost Politics Perspective". The MIT Press. Chapter 2, pp. 37-44 and 61-73.

DR Appendix 1, pp.767-771.

Barry Eichengreen and Jorge Braga de Macedo (2001) "The European Payments Union: History and Implications for the Evolution of the International Financial Architecture" in A. Lamfalussy, B. Snoy and J. Wilson (eds.) "Fragility of the International Financial System". P.I.E.-Peter Lang. Brussels

Andrea Goldstein "State-Owned Enterprises in Development: Privatisation and Beyond" in Redux

Charles P. Oman (2001) "Corporate Governance and National Development". OECD

Development Centre Technical Paper No 180. Available at: http://www.oecd.org/pdf/M00019000/M00019587.pdf

Mariano Tommasi (2002) "Crisis. Political Institutions, and Policy Reform. It is not the Policy, it is the Polity, Stupid". Universidad de San Andres. Argentina. Mimeo.

Dani Rodrik (1996), "Understanding Economic Policy Reform", Journal of Economic Literature. Vol. XXXIV, pp. 9-41.

Shuhe Li (1999) "The Benefits and Costs of Relation-Based Governance: An Explanation of the East Asian Miracle and Crisis." Mimeo. City University of Hong Kong, Department of Economics and Finance Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=200208

AEO pp. 217-227.

Dani Rodrik, Margaret McMillan and Karen Horn Welch (2002) "When Economic Reform Goes Wrong: Cashews in Mozambique" Mimeo. Available at: http://ksghome.harvard.edu/~.drodrik.academic.ksg/papers.html

Launching of the book Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880-1935 by Gerardo della Paolera and Alan M. Taylor, followed by comments by Jorge Braga de Macedo. 18h30 hrs, 31 av. Bosquet. The Grand Salon, 1st floor, further details of the book available at:

http://www.econ.ucdavis.edu/faculty/amtaylor/personal/dtbkrev.html

Daron Acimoglu, Simon Johnson and James A. Robinson (2002) "An African Success Story: Botswana". In Dani Rodrik, editor "In Search of Prosperity: Analytic Narratives on Economic Growth", forthcoming. Available at: http://econ-www.mit.edu/faculty/acemoglu/files/papers/Botswanafinal.pdf

Pranab Bardhan (1999) "Democracy and Develoment: A Complex Relationship". in I. Shapiro and C. Hacker-Cordon (eds.), Democracy's Values, Cambridge University Press, 1999. Available at: http://globetrotter.berkeley.edu/macarthur/inequality/papers/#Bardhan

Tavares, J. and Wacziarg (2001), "How Democracy Affects Growth", European Economic Review No.45, pp. 1341-1378.

AEO pp. 205-214.

Maurizio Bussolo and Christian Morrisson "Openness and Poverty" in Redux.

Surjit Bhalla, World Bank - We have a poverty problem, Economic Times, Jan 18, 2000, from "Imagine there's no country: Globalization and its Consequences for Poverty, Inequality and Growth" (2002), chapter 4 "Poverty as we are told". Available at http://www.iie.com/publications/pub.cfm?pub_id=348.

World Bank (2002) "Globalisation, Growth and Poverty, Building an Inclusive World Economy", Washington D. C. chapters 1 and 5 Available at http://econ.worldbank.org/prr/globalization/text-2857/.

DR chapter 5.

OECD (2002) "Economic Survey: Portugal"

"Portugal's European Integration: The Good Student with a Bad Fiscal Constitution" in F. Monteiro and J. Tavares Portugal: Strategic Options in a European Context. Lexington.

Kiichiro Fukusaku (2002) "Trade and Investment Liberalization" in Redux.

Angel Calderón-Madrid, (2002) "Sheltering Effects of NAFTA: Performance of Mexican Exports to the U.S. Markets in View of Asian Countries Crisis of 1997-98". Mimeo.

Angel Calderón-Madrid (2001) "Banking and Currency Crises: Lessons from the Mexican Experience" Mimeo.

OECD (1996) "Trade Liberalisation Policies in Mexico."

Woodruff (1998) "Contract Enforcement and Trade Liberalization in Mexico's Footwear Industry" in World Development Vol 26, No 6, pp. 979-991.

Jorge Braga de Macedo, Colm Foy and Charles P. Oman in Redux.

Jorge Braga de Macedo (2002) "Towards an African Multilateral Framework". Mimeo. September 2002

Joseph Stiglitz (2002) "Globalization and Its Discontents" Norton, W. W. & Company, Inc. Chapter 9.