Sectors and Policy in Development

Econ 247
Fall 2024

Course Basics

Instructor Dr. Hadia Majid

Email [email protected]
Office #253 in Economics Wing D
Office Hours Fridays 2-4 pm

Office hours are not walk-in. Please email to set up an appointment. Each student
will be given no more than 15 minutes. Please come prepared with discussion
points.
TA Ms. Bismah Dreshak
TA email [email protected]
Course Prerequisite Principle of Micro OR Principles of Macro
Core/Elective Elective
Credit Hours 4
Lectures/Tutorials 2 lectures per week + No tutorials
Time-input from In most universities: 1 unit  1 hour of lecture time + 2 hours per week of
Students homework.
For LUMS: 4 units  220 minutes of lecture time + at least 7 hours of homework.
Per week. So, read!
Student Support https://docs.google.com/document/d/1BluDrEHnvKdUPOmXM0kUVozIe-gqI_xP-
Services@LUMS q-1-hm_qNg/edit#heading=h.mhsofnsdljob

Course Overview

This course will examine some aspects of the economic problems and potential of developing
economies. The course is designed to provide a basic overview of (some) micro and mostly macro
elements. A primary objective of the course is for students to critically analyse and present policy
options for key sectors and predominant issues faced by developing countries.

Learning Outcomes: By the end of the course students will…

1. Demonstrate familiarity with and basic knowledge of key development problems of poor
countries.
2. Critically investigate and develop policy solutions for specific key sectors.
3. Analyze rudimentary empirical evidence on patterns of economic development and present
policy solutions.

Grading Breakup

Attendance 5%
2 allowed absences. 5-minute rule will be followed. No screens. Laptops/tablets
only allowed if using course materials.

1
 Quizzes (4) 30%
Presentation 15%
Midterm 25%
Final 25%
Grading Grading will be per department policy in accordance with the Grader. Student
requests about grade/cut-off changes will not be entertained.

Missed Assessments

Missed midterm and final petitions will be handled by OSA. For instruments with weight less than
10%, submit petitions via email to the TA within 3 working days (no exceptions). Only petitions made
on the proper form with documentation will be entertained. It is your responsibility to read up on
policies regarding these petitions and to track down the appropriate form. Petitions will NOT be
accepted for group work or for attendance.

Academic Misconduct

Academic integrity is essential to maintaining an environment that fosters excellence in teaching,

research, and other educational and scholarly activities. The term “academic misconduct” includes
but is not limited to, cases of plagiarism and dishonest practices in connection with
examinations/assessments. Ignorance of the University’s code of student conduct is never
considered an excuse for academic misconduct; please review the student handbook.

You may not work with other students or consult online/course resources UNLESS EXPLICITLY
STATED. All cases of cheating or plagiarism will be handed over to the DC, and I reserve the right to
conduct a viva with any student post an assessment. While I have zero-tolerance for cheating, I
expect students to help each other adhere to the LUMS honor code too. An “everyone else is doing it
so why can’t we” attitude is a poor excuse for tolerating cheating within the LUMS community.

Honor Code for the Course

No member of this class will use unfair means to gain an advantage in the course.

Harassment

MGSHSS, LUMS and particularly this class, is a harassment free zone. There is absolutely zero
tolerance for any behaviour that is intended or has the expected result of making anyone
uncomfortable and negatively impacts the class environment, or any individual’s ability to work to the
best of their potential. This includes the TA.

If you have been subjected to harassment, or if you have observed any harassment occurring in the
purview of this class, please reach out and speak to me. If you are a victim, I strongly encourage you
to reach out to the Office of Accessibility and Inclusion at [email protected] or
the sexual harassment inquiry committee at [email protected] for any queries, clarifications,
or advice. You may choose to file an informal or a formal complaint.

Instrument Detail

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 Quizzes  There will be no n-1 rule.
 The quizzes will comprise of short/long theoretical and conceptual
questions from the content covered in class/readings.
 Quizzes will be closed books/notes; no student collaboration.
 Plagiarism will result in disciplinary action.
Group Work  This comprises of a presentation.
 You will divide into groups at the start of semester and each group will
have to select a relevant (and interesting) topic of their choice.
 2 marks out of the total will be reserved for discussion (and approval)
of your topic. All group members must be present and participate in the
discussion. Dates for this will be communicated.
 Last three/four class sessions will be dedicated to project presentation
in which each group will share their project work with the class.
 When preparing for your in-class presentation you may use all
resources available in the library. Plagiarism will result in disciplinary
action. Passing off AI-content as your own is plagiarism.
Midterm  During midterm week.
 All material up to and including the lecture before the mid.
 Closed books/notes. No student collaboration.
 Plagiarism will result in disciplinary action.
Final  Per RO Schedule.
 Will be comprehensive.
 Closed books/notes. No student collaboration.
 Plagiarism will result in disciplinary action.

Course Books

Main Texts
1. Michael Todaro and Stephen Smith (2014). Economic Development. Addison Wesley Longman
(New York) 12th Edition. (referred to as Todaro in Course Detail)
2. Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, 6th
Edition, New York, W. W. Norton, 2006 (referred to as Perkins in Course Detail)
Students must go through the entire assigned reading + end-of-chapter appendices + case studies
unless otherwise noted in the lecture slides.
I make use of the World Bank Database for my data visualizations:
https://databank.worldbank.org/source/world-development-indicators#

Course Detail

Topic Detail
1 Micro-topics Overview
in We will consider the living conditions and working lives of the poor. The module
development will provide context and an overview of what it is that we are trying to improve
and “develop”.

Policy Question
How do we use data more effectively to combat poverty?

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 Readings
- Duflo, Esther and Abhijit Banerjee. 2007. “The Economic Lives of the
Poor.” Journal of Economic Perspectives. 21(1), 141-167. Available online
at http://economics.mit.edu/files/530
- Addison, T. (2004). Development Policy: An Introduction for Students.
Wider Discussion Paper No. 2004/9.
https://www.researchgate.net/publication/23780567_Development_Poli
cy_An_Introduction_for_Students
Pakistan Context
- Abid Burki, Arsalan Hussain and Kinza Khan “Why do Income and
Wealth Inequality Matter for Pakistan?”
https://mhrc.lums.edu.pk/why-do-income-and-wealth-inequalities-
matter-for-pakistan/
2 Agriculture Overview
and We will look at the agriculture sector and its role in the development process.
Development
Key modes of organization in the sector as well as the major constraints will be
considered

Policy Question
Why is it essential to incorporate the agriculture sector in development
strategies?

Readings
- Todaro: Chapter 9
- Perkins: Chapter 16
Pakistan Context
- Comprehensive overview of ag sector:
https://www.ukessays.com/essays/economics/importance-of-
agriculture-in-pakistans-economy-and-development-economics-
essay.php
- Shah Munir Khan “More from the Land”
https://www.dawn.com/news/1670859
3 Industry and Overview
Development We will examine the industrial sector, SMEs, and links with growth and
development in this chapter.

Policy Question
What are the key factors that Pakistan must consider to optimize its industrial
growth?

Readings
- Perkins: Chapter 18
Pakistan Context
- Dawn editorial “Impact on Industry”
https://www.dawn.com/news/1708005
- Ishrat Husain “Industrial Policy Reform”
https://pide.org.pk/research/industrial-policy-reform/

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4 The Overview
Environment We will consider the primary reasons why we continue to see a failure of a
and cohesive reaction against environmental degradation as well as how the problem
Development arises.

Policy Question
How do we incentivize citizens to internalize the environmental effects of their
actions?

Readings
- Todaro: Chapter 10
- Perkins: Chapter 20
Pakistan Context
- Sanval Nasim “Economics of Climate Change”
https://www.dawn.com/news/1508040/economics-of-climate-change
- Zafar Mirza “Climate Change and Health”
https://www.dawn.com/news/1718787
5 Trade Policies Overview
We will do a critical overview of the main strands in trade theory applied to
developing countries.

Policy Question
Why has the protectionist policy failed in the Pakistan context?

Readings
- Todaro: Chapter 12 (pp. 641-648 not included)
Pakistan Context
- Asad Zaman “Rupee Overvaluation”
https://www.dawn.com/news/1483223/rupee-overvaluation
- Shahid Satar, Amna Urooj “Beyond Import Substitution: Charting
Pakistan’s Future with Export-led Growth!”
https://pide.org.pk/research/beyond-import-substitution-charting-
pakistans-future-with-export-led-growth/
6 Balance of Overview
Payments, We will review the causes and consequences of the international debt crisis. It
Debt and looks at the processes of debt accumulation, repayment, and the nature,
Macro implementation and consequences of stabilization and structural adjustment
Stabilization programs.

Policy Question
Is cutting back imports the best strategy to improve balance of payments?

Readings
- Todaro: Chapter 13
Pakistan Context
- Amin Ahmed “Macroeconomic Stability in Pakistan”
https://www.dawn.com/news/1401905
- Shahid Kardar “Restructuring and Rescheduling of External and Domestic

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 Debt”
https://pide.org.pk/research/restructuring-and-rescheduling-of-external-
and-domestic-debt/
7 Foreign Overview
Finance, We will analyze the financing of development. It also reviews the role of foreign
Investment capital in development, including foreign direct investment by transnational
and Aid companies, portfolio investment, and the strategy and implications of domestic
financial liberalization and capital account liberalization. The need for foreign aid
in developing countries and the role played by it will also be discussed.

Policy Question
Should governments look to attract FDI or aid?

Readings
- Todaro: Chapters 14: sub-section on “Foreign Exchange Constraints”
(p752) not included
- Todaro: Chapter 15: figure 15.1 and associated discussion not included
- Foreign Aid: Good or Bad?
https://www.imf.org/en/News/Articles/2015/09/28/04/53/soint090910a
Pakistan Context
- Hadia Majid “Development Aid Failure”
https://www.dawn.com/news/580868/development-aid-failure-by-
hadia-majid
- Nasir Jamal “Falling Further Behind”
https://www.dawn.com/news/1639563