Readings | Political Economy and Economic Development | Economics

Optional Background Readings

Banerjee, Abhijit V., and Esther Duflo. Poor Economics: Rethinking Poverty and the Ways to End it. Random House, 2013. ISBN: 9788184002805.

Easterly, William. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. MIT Press, 2002. ISBN: 9780262550420.

Klitgaard, Robert. Tropical Gangsters: One Man's Experience With Development and Decadence in Deepest Africa. Basic Books, 2000.

———. Controlling Corruption. University of California Press, 1991. ISBN: 9780520074088.

Fisman, Raymond, and Edward Miguel. Economic Gangsters: Corruption, Violence, and the Poverty of Nations. Princeton University Press, 2010. ISBN: 9780691144696.

Texts under the heading "read" are required for the session. Texts labeled "optional" are not required reading, but will be beneficial in class discussion.

Course readings.
SES #	TOPICS	READINGS
1	Introduction: Why study political economy and development? Motivation and Course Overview	No readings
2	The Role of Leaders and Democratic Institutions	Read Jones, Benjamin F. and Benjamin A. Olken. "Hit or Miss? The Effect of Assassinations on Institutions and War." American Economic Journal: Macroeconomics 1, no. 2 (2009): 55–87. Optional Jones, Benjamin F. and Benjamin A. Olken. "Do Leaders Matter? National Leadership and Growth Since World War II." Quarterly Journal of Economics 120, no. 3 (2005): 835–64.
3	The Deep Determinants of Economic Development: Macro Evidence	Read Acemoglu, Daron, Simon Johnson, et al. "The Colonial Origins of Comparative Development: An Empirical Investigation." American Economic Review 91, no. 5 (2001): 1369–401. Optional Nunn, Nathan. "Long Term Effects of Africa's Slave Trades." The Quarterly Journal of Economics 123, no. 1 (2008): 139–76. Dell, Jones and Benjamin A. Olken (2011) "Temperature Shocks and Economic Growth: Evidence from the Last Half Century." American Journal of Economics: Macroeconomics 4 no. 3 (2012): 66-95. (Available at http://economics.mit.edu/files/7642).
4	The Deep Determinants of Economic Development. Micro Evidence	Read Dell, Melissa. "The Persistent Effects of Peru's Mining Mita." Econometrica 78, no. 6 (2010): 1863–903. Optional Michalopoulos, Stelios, and Elias Papaioannou. "Divide and Rule or the Rule of the Divided? Evidence from Africa." (PDF) NBER Working Paper no. 17184 (2011).
5	None Available	No readings
6	The Median Voter Theorem	Read Shepsle, Kenneth A. Analyzing Politics: Rationality, Behavior and Instititutions. 2ed. W. W. Norton & Company, 2010, pp. 90–9, 110–23. ISBN: 9780393935073. Optional Miller, Grant. "Women's Suffrage, Political Responsiveness, and Child Survival in American History." The Quarterly Journal of Economics 123, no. 3 (2008): 1287–327. Meltzer, Allan H., and Scott F. Richards. "A Rational Theory of the Size of Government." Journal of Political Economy 89, no. 5 (1981): 914–27.
7	The Median Voter Theorem	No readings
8	Voting in Practice: Citizen-Candidate Models, Politician Identity and the Failure of the Median Voter Theorem	Read Duflo, Esther, and Raghabendra Chattopadhyay. "Women as Policy Makers: Evidence From a Randomized Experiment in India." Econometrica 72, no. 5 (2004): 1409–43. Optional Pande, Rohini. "Can Mandated Political Representation Increase Policy Influence for Disadvantaged Minorities." American Economic Review 93, no. 4 (2003): 1132–51.
9	Voting in Practice: Agency Models	Read De La O, Ana L. "Do Conditional Cash Transfers Affect Electoral Behavior? Evidence from a Randomized Experiment in Mexico." American Journal of Political Science 57, no. 1 (2013): 1–14. Banerjee, Abhijit V., Selvan Kumar, et al. "Do Informed Voters Make Better Choices? Experimental Evidence from Urban India." (PDF - 4.56MB) Working Paper (2011). Optional Miguel, Edward, Marco Manacorda, et al. "Government Transfers and Political Support." (PDF) American Economic Journal: Applied Economics. NBER Working Paper no. 14702 (2009). Ferraz, Claudio, and Frederico Finan. "Exposing Corrupt Politicians: The Effect of Brazil's Publicly Released Audits on Electoral Outcomes."The Quarterly Journal of Economics 123, no. 2 (2008): 703–45.
10	Voting in Practice: Agency Models	No readings
11	Voting in Practice: Vote Buying and Voter Intimidation	Read Finan, Fredericom, and Laura Schecter. "Vote-Buying and Reciprocity?" (PDF) Working Paper (2011). Optional Gans-Morse, Jordan, Sebastian Mazzuca, et al. "Who Gets Bought? Vote Buying, Turnout Buying, and Other Strategies." (PDF - 4.5MB) Weatherhead Center For International Affairs. Harvard University Working Paper no. 09-0006 (2009). Nichter, Simeon. "Vote Buying or Turnout Buying? Machine Politics and the Secret Ballot." American Political Science Review 102, no. 1 (2008): 19–31. Hsieh, Chang-Tai, Edward Miguel, et al. "The Price of Political Opposition: Evidence from Venezuela's Maisanta." American Economic Journal: Applied Economics 3, no. 2 (2011): 196–214.
12	Sometimes It Gets Complicated: Condorcet's Paradox and Arrow's Impossibility Theorem	Read Shepsle, Kenneth A. Chapters 3, and 4 (you may also want to quickly read Chapter 2 since those chapters refer to some of the material in Chapter 2) in Analyzing Politics: Rationality, Behavior and Instititutions. W. W. Norton & Company, 2010, pp. 90–9, and 110–23. ISBN: 9780393935073.
13	Midterm	No readings
14	Good vs. Bad Dictatorships	Read Olson, Mancur. "Dictatorship, Democracy, and Development." The American Politcial Science Review 87, no. 3 (1993): 567–76. Optional Easterly, William. "Benevolent Autocrats." (PDF) 2011.
15	Commitment Problems in Dictatorship	Read Acemoglu, Daron, and James A. Robinson. Chapters 1, 2, and 5 in Economic Origins of Dictatorship and Democracy. Cambridge University Press, 2009, pp. 118–51. ISBN: 9780521671422. Optional Easterly, William. "Benevolent Autocrats." (PDF) 2011.
16	The Logic of Collective Action	Read Shepsle, Kenneth A. Chapters 9, and 10 in Analyzing Politics: Rationality, Behavior and Instititutions. W. W. Norton & Company, 2010. ISBN: 9780393935073. Optional Olson, Mancur. The Logic of Collective Action: Public Goods and the Theory of Groups. Harvard University Press, 1965. ISBN: 9780674537507. Ray, Debraj, and Joan Maria Esteban. "Collective Action and the Group Size Paradox." American Political Science Review 95, no. 3 (2001): 663–72.
17	Ethnic Heterogeneity and Contributions to Public Goods	Read Miguel, Edward, and Mary Kay Gugerty. "Ethnic Diversity, Social Sanctions, and Public Goods in Kenya." Journal of Public Economics 89, no. 11–12 (2005): 2325–68. Optional Alesina, Alberto, Reza Baqir, et al. "Public Goods and Ethnic Divisions." Quarterly Journal of Economics 114, no. 4 (1999): 1243–84. Miguel, Edward. "Tribe or Nation?: Nation Building and Public Goods in Kenya versus Tanzania." World Politics 56, no. 3 (2004): 327–62. Olken, Benjamin A., and Monica Singhal. "Informal Taxation." American Economic Journal: Applied Economics 3, no. 4 (2011): 1–28.
18	Monitoring and Collective Action Problems	Read Björkman, Martina, and Jakob Svensson. "Power to the People: Evidence from a Randomized Experiment of a Citizen Report Card Project in Uganda." Quarterly Journal of Economics 124, no. 2 (2009): 735–69. Optional Olken, Benjamin. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia." Journal of Political Economy 115, no. 2 (2007): 200–49. Banerjee, Abhijit, Esther Duflo, et al. "Pitfalls of Participatory Programs: Evidence from three randomized experiments in education in India." (PDF) NBER Working Paper no. 14311 (2008).
19	Recovery from Civil War	Read Beath, Andrew, Fotini Christia, et al. "Winning Hearts and Minds: Evidence from a Field Experiment in Afghanistan." (PDF) MIT Political Science Department Working Paper no. 2011–14 (2012).
20	Why Do Wars Happen?	Read Fearon, James D. "Rationalist Explanations for War." International Organization 49, no. 3 (1995): 379–414. Optional Jackson, Matthew O., and Massimo Morelli. "Political Bias and War." American Economic Review 97, no. 4 (2007): 1353–73.
21	Civil War	Read Dube, Oeindrila and Juan F. Vargas, (2010) "Commodity Price Shocks and Civil Conflict: Evidence from Colombia." Review of Economic Studies 80 (2013) 1384-421. Optional Miguel, Edward, Shanker Satyanath, et al. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach." Journal of Political Economy 112, no. 4 (2004): 725–53. Abadie, Alberto, and Javier Garbeazabal. "The Economic Costs of Conflict: A Case Study of the Basque Country." American Economic Review 93, no. 1 (2003): 113–32. Miguel, Edward, and Gerard Roland. "The Long Run Impact of Bombing Vietnam." Journal of Development Economics 96, no. 1 (2011): 1–15.
22	Is Corruption Inefficient?	Read Bertrand, Marianne, Simeon Djankov, et al. "Obtaining a Driver's License in India: An Experimental Approach to Studying Corruption." The Quarterly Journal of Economics 122, no. 4 (2007): 1639–76. Optional Banerjee, Abhijit, Rema Hanna, et al. "Corruption." (PDF) NBER Working Paper no. 179682011 (2012). Hsieh, Chang-Tai, and Enrico Moretti. "Did Iraq Cheat the United Nations? Underpricing, Bribes, and the Oil for Food Program." The Quarterly Journal of Economics 121, no. 4 (2006): 1211–48. Reinikka, Ritva, and Jakob Svennson. "Local Capture: Evidence from a Central Government Transfer Program in Uganda." The Quarterly Journal of Economics 119, no. 2 (2004): 679–705.
23	The Corrupt Official's Decision Problem: Balancing Risks, Rents, and Incentives	Read Olken, Benjamin A. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia." (PDF) Journal of Political Economy 115, no. 2 (2007): 200–49. Optional Becker, Gary S., and George J. Stigler. "Law Enforcement, Malfeasance, and Compensation of Enforcers." Journal of Legal Studies 3, no. 1 (1974): 1–18. Di Tella, Rafael, and Ernesto Schargrodsky. "The Role of Wages and Auditing During a Crackdown on Corruption in the City of Buenos Aires." Journal of Law and Economics 46, no. 1 (2003): 269–92. Duflo, Esther, Rema Hanna, et al. "Monitoring Works: Getting Teachers to Come to School." CEPR Discussion Paper Series no. 6682 (2008).
24	The Industrial Organization of Corruption	Read Olken, Benjamin A., and Patrick Barron. "The Simple Economics of Extortion: Evidence from Trucking in Aceh." (PDF) Journal of Political Economy 117, no. 3 (2009): 417–52. Optional Shleifer, Andrei, and Robert W. Vishny. "Corruption." The Quarterly Journal of Economics 108, no. 3 (1993): 599–617. Burgess, Robin, Matthew Hansen, et al. "The Political Economy of Deforestation in the Tropics." NBER Working Paper No. 17417 (2011).
25	Politicians and Firms	Read Fisman, Ray. "Estimating the Value of Political Connections." American Economic Review 91, no. 4 (2001): 1095–102. Riordan, William L. "Honest Graft and Dishonest Graft." Chapter 1 in Plunkitt of Tammany Hall: A Series of Very Plain Talks on Very Practical Politics. CreateSpace Independent Publishing Platform, 2013. ISBN: 9781477419564. (Available on Project Gutenberg at: http://www.gutenberg.org/dirs/2/8/1/2810/2810.txt.) Optional Khwaja, Asim Ijaz, and Atif Mian. "Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market." Quarterly Journal of Economics 121, no. 4 (2005): 1371–411. Fisman, Ray, David Fisman, et al. "Estimating the value of connections to Vice-President Cheney." (PDF). Working Paper (2006).
26	Wrap Up	No readings