Universität Passau
32400 Lecture: Micro Development Economics - Details
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General information

Subtitle Englisch
Course number 32400
Semester WiSe 21/22
Current number of participants 55
expected number of participants 75
Home institute Lehrstuhl für Development Economics
participating institutes Graduiertenzentrum
Courses type Lecture in category Teaching
First date Mon., 18.10.2021 10:00 - 12:00 Uhr, Room: (WIWI) HS 6
Type/Form Präsenz plus Zoom/Synchron (Hybrid)
  • To provide participants with the theoretical foundations of modern development economics,
  • To familiarize participants with the literature in the relevant domains,
  • To equip participants with the techniques necessary to derive hypotheses from the theory that can tested empirically,
  • To introduce participants to the key policy debates in the areas covered by this course.
An understanding of intermediate micro and macro‐economics and basic econometrics is required. Prior knowledge in development economics is an advantage. Students without any prior knowledge in development economics may read the books by either Perkins (2012), Ray (1998) or Todaro and Smith (2006) (see course book for details).
Learning organization
This lecture is organised in a set of lectures and tutorials (Übungen). Students are explicitly invited to actively participate in the lecture through questions and input for discussion. In the tutorials students solve set problems in relation to the lecture. In addition students are invited to indicate those parts of the course for which they need additional training. This may refer to a particular theoretical model, an empirical method or a certain debate in development politics. Readings are essential to prepare the class and the exam.
Performance record
Written exam 90 min
  • Course book with detailed information about the course.
  • Readings
  • Presentation Slides (script)
  • Set problems (tutorial/Übung)

General background readings
  • Banerjee, A.V. and E. Duflo (2005), Growth Theory through the Lens of Development Economics. In Philippe Aghion and Steven Durlauf (eds.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473‐552 Elsevier. A working paper version can be downloaded at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=651483
  • Banerjee, A.V. and E. Duflo (2011), Poor Economics, Penguin Books.
  • Bardhan, P. and C. Udry (1999), Development Microeconomics. Oxford University Press: Oxford.
  • Basu K. (1997), Analytical Development Economics, Cambridge: MIT Press.
  • De Janvry, A. and E. Sadoulet (2016), Development Economics. Theory and Practice. Routledge, London.
  • Fafchamps, M. (2003), Rural Poverty, Risk and Development. Edward Elgar Publishing, Cheltenham.
  • Platteau, J.P. (2000), Institutions, social norms and economic development. Harwood Academic Publishers.
  • Perkins, D.H., S. Radelet, D.L. Lindauer and S.A. Block (2012), Economics of Development, Norton &
  • Ravallion, M. (2001), The Mystery of the Vanishing Benefits: An Introduction to Impact Evaluation.
  • World Bank Economic Review 15 (1): 115‐140. [Download: http://www.eclac.cl/ilpes/noticias/paginas/2/40352/ravallion__mystery_2001.pdf]
  • Ray D. (1998), Development Economics. Princeton University Press: Princeton.
  • Todaro M.P. and S.C. Smith (2006), Economic Development. 9th edition (or newer), Pearson: Essex.
im Wintersemester
On completing this course students should be able to:

1. Apply advanced micro‐economic theory to real world problems of development.
2. Assess and understand the role of incentives and institutions in driving economic growth, reducing inequality and poverty, enhancing human development.
3. Assess and analyse the relevant economic and non‐economic relations underlying the response of different agents such as individuals, households, firms, and government to processes of change.
4. Understand various methods to test micro‐economic models empirically.
5. Understand various methods to evaluate targeted policy interventions.
Vorlesung 2 SWS (28 h Präsenzzeit, 48 h Eigenarbeitszeit)
Übung 2 SWS (24 h Präsenzzeit, 24 h Eigenarbeitszeit)
Vorbereitung Klausur (2 h Präsenzzeit, 24 h Eigenarbeitszeit)
ECTS points

Course location / Course dates

(WIWI) HS 6 Mon.. 10:00 - 12:00 (14x)
(WIWI) HS 7 Monday. 14.02.22 10:00 - 12:00

Fields of study

This information on acceptance for credit of modules for individual degree programmes is not binding; please check the module catalogue at the Faculty of Computer Science and Mathematics to confirm that this module can be counted towards your degree.


This course is motivated by the idea that development requires a transformation in economic processes and changes in the underlying micro structures of a country so that the development
potential of a country may be released. Accordingly, the aim of this course is to study and analyse
households, firms and institutions engaged in the process of economic development. The course will
rely mainly on micro economic analysis to study the interactions between these various agents. The
course is broadly conceived and will draw on material from neoclassical economics, institutional
economics, and behavioural/experimental economics.

The course will introduce students to current debates and research in the microeconomics of
development and examine the role of market imperfections, market failure and non‐market
institutions in shaping decisions. For example, the decision to attend school or to work may depend
on credit constraints, the social and cultural environment in which households are located and
investments made by the government in the availability and quality of schooling. The source of
market imperfections, and the evolution of various non‐market and governance institutions may in
turn depend on various factors (e.g., history, location, factor endowments), which can help provide
explanations of development or the lack of it.

Current research in this area blends theoretical models and empirical application. Accordingly, the
course will draw on both types of work and will be divided into four broader blocks.