Syllabus
The collection...
Mookherjee, D. and D. Ray (2000), "Readings in the Theory of Economic Development, " London: Blackwell
... contains many of the articles in this syllabus. These articles are marked [MR]. Click here if you are interested in buying this reader from amazon.com.
Background Reading
Ray, D. (1998), Development Economics, Princeton University Press (1998). To be referred to as DE. Click here if you are interested in purchasing the book from amazon.com.
Ray, D. (2001), "What's New In Development Economics?," The American Economist 44, 3--16.
Underdevelopment as a Coordination Failure
DE, Chapter 5.
Hoff, K. (2000), "Beyond Rosenstein-Rodan: The Modern Theory of Underdevelopment Traps," Annual Bank Conference on Development Economics.
Adsera, A. and D. Ray (1998), "History and Coordination Failure,'' Journal of Economic Growth 3, 267-276. [MR]
Frankel, D. and A. Pauzner (2000), "Resolving Indeterminacy in Dynamic Settings: The Role of Shocks," Quarterly Journal of Economics 115, 285--304.
Morris, S. and H. Shin (1998),
"Unique
Equilibrium in a Model of Self-Fulfilling Currency Attacks," American
Economic Review 88, 587--597.
Other Readings
Rosenstein-Rodan, P. (1943), "Problems of Industrialization of Eastern and Southeastern Europe,'' Economic Journal 53, 202-211. The original paper on coordination failure.
Hirschman, A. (1958), The
Strategy of Economic Development, New Haven: Yale University Press. An insightful
book. You can still mine it for fresh ideas.
Murphy, K., Shleifer, A. and R. Vishny (1989), "Industrialization and the Big Push,'' Journal of Political Economy 97, 1003--1026. [MR]. Perhaps the first formalization of the Rosenstein-Rodan argument.
Ciccone, A. and K. Matsuyama (1996), "Start-up costs and pecuniary externalities as barriers to economic development,'' Journal of Development Economics 49, 33--59. Another example. Actually, this issue of the JDE is entirely devoted to coordination failure. You can skim some of the other papers, such as the one by Rodriguez-Clare.
Acemoglu, D. and
Zilibotti (1997), "Was
Prometheus Unbound by Chance? Risk, Diversification and Growth'' Journal
of Political Economy 105, 709-751. [MR] This one is not such
much on coordination failure but describes pretty much the same kind of externality
in the context of financial markets. Nice paper.
Inequality and Underdevelopment
DE, Chapters 6 and 7.
Loury, G. (1981), "Intergenerational Transfers and the Distribution of Earnings,'' Econometrica 49, 843--867.
Mookherjee, D. and D. Ray (2002a), "Persistent Inequality," mimeo.
Mookherjee, D. and D. Ray (2002b), "Is Equality Stable?," American Economic Review 92, 253--259.
Other Readings
The four papers listed below all made connections between inequality and macroeconomic outcomes in an interactive context (see my article in the American Economist for some general remarks).
Galor, O. and J. Zeira (1993), "Income Distribution and Macroeconomics,'' Review of Economic Studies 60, 35-52. [MR]
Banerjee, A. and A. Newman (1993), "Occupational Choice and the Process of Development,'' Journal of Political Economy 101, 274-298. [MR]
Ljungqvist, L. (1993), "Economic Underdevelopment: The Case of a Missing Market for Human Capital,'' Journal of Development Economics 40, 219--239. [MR]
Ray, D. & P. Streufert (1993), "Dynamic Equilibria with Unemployment Due to Undernourishment," Economic Theory 3, 61--85.
An early set of papers which tried to explore some of these connections in a static context is
Dasgupta, P. and D. Ray (1986), "Inequality as a Determinant of Malnutrition and Unemployment: Theory,'' Economic Journal 96, 1011-1034, and "Policy," Economic Journal 97, 177--188. [MR]
Contractual Structure: Credit and Insurance
DE, Chapters 14 and 15.
Ghosh, P., Mookherjee, D. and D. Ray (2000), "Credit Rationing in Developing Countries: An Overview of the Theory," Chapter 11 in Readings in the Theory of Economic Development, edited by D. Mookherjee and D. Ray, London: Blackwell. [MR]
Coate, S. and M. Ravallion (1993), ``Reciprocity Without Commitment: Characterization and Performance of Informal Insurance Arrangements,'' Journal of Development Economics 40, 1-24. [MR]
Other Readings
Stiglitz, J. and A. Weiss (1981), "Credit Rationing in Markets with Incomplete Information," American Economic Review 71, 393-410. The classic on adverse selection and credit rationing.
Ghosh, P. and D. Ray (1996), "Cooperation in Community Interaction without Information Flows,'' Review of Economic Studies 63, 491--519. The general equilibrium of enforcement constraints in when information on past deviations is not publicly available.
Kocherlakota, N. (1996), "Implications of Efficient Risk Sharing without Commitment," Review of Economic Studies 63, 595-609.
Ligon, E., Thomas, J. and T. Worrall (2002), "Mutual Insurance and Limited Commitment: Theory and Evidence in Village Economies,'' Review of Economic Studies 69, 209-244.
The above two papers do the Coate-Ravallion model "correctly" by permitting history-dependent arrangements.
Genicot, G. and D. Ray (2002), "Group Formation in Risk-Sharing Arrangements," forthcoming, Review of Economic Studies. This paper allows for groups to jointly violate the enforcement constraint instead of only individuals.
More on Contractual Structure: Land and Labor
DE, Chapters 11, 12, 13.
Eswaran, M. and A. Kotwal (1985), "A Theory of Contractual Structure in Agriculture," American Economic Review 95, 352--366.
Banerjee, A., Gertler, P. and M. Ghatak (2002), "Empowerment and Efficiency: The Economics of Agrarian Reform," Journal of Political Economy
Mookherjee, D. and D. Ray (2002), "Contractual Structure and Wealth Accumulation," forthcoming, American Economic Review, September.
Eswaran, M. and A. Kotwal (1985), "A Theory of Two-Tiered Labour Markets in Agrarian Economies,'' American Economic Review 75, 162--177.
Mukherjee, A., and D. Ray (1995). ``Labor Tying,'' Journal of Development Economics 47, 207--239.
Other Readings
The papers that follow are some well-known papers on land markets, largely empirical.
Cheung, S. (1969), “Private Property Rights and Sharecropping,” Journal of Political Economy 76, 1107-1122.
Bell, C. (1977), “Alternative Theories of Sharecropping: Some Tests Using Evidence from Northeast India,” Journal of Development Studies 13, 317-346.
Shaban, R. (1987), “Testing
between Competing Models of Sharecropping,” Journal of Political
Economy 95, 893-920, 1987.
Besley, T. and R. Burgess (2000), “Land Reform, Poverty Reduction and Growth:
Evidence from India,” Quarterly Journal of Economics 115,
389-430, 2000.
Aspects of Conflict and Development
Piketty, T. (1995), "Social Mobility and Redistributive Politics," Quarterly Journal of Economics 110, 551--584.
Esteban, J. and D. Ray (1999), "Conflict and Distribution," Journal of Economic Theory 87, 379--415.
Horowitz, A. (1993), "Time Paths of Land Reform: A Theoretical Model of Reform Dynamics," American Economic Review 83, 1003--1010.
Banerjee, A., Mookherjee, D., Munshi, K. and D. Ray (2001), "Inequality, Control Rights and Rent Seeking: Sugar Cooperatives in Maharashtra," Journal of Political Economy 109, 138--190.
Other Readings
Esteban, J. and D. Ray (1994), "On the Measurement of Polarization," Econometrica 62(4), 819--851. One of the first papers to formalize the notion of polarization and relate it to questions of identity and alienation.
D. Ray (2002), "Aspirations, Poverty and Economic Change," mimeo. Anorther take on identity.
J. Robinson (1998), "Theories of Bad Policy," Policy Reform 1, 1--46. A very nice summary of theories of policy, coming to the conclusion that probably the best theory of bad policy is the one in which a policymaker shies away from good policy becaise it also increases political competition.
D. Acemoglu and J. Robinson (2000), "Political Losers as a Barrier to Economic Development," American Economic Review 90, 126--134. Followup on the Robinson paper.