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Department of Economics

Themes and Approaches in the Political Economy of Institutions (MSc Research for International Development)

Course Code:
15PECC059
Unit value:
0.33
Year of study:
Year 1
Taught in:
Term 2

This course is only available to students enrolled on the MSc Research for International Development programme.

The course covers topics in the growing literature on institutional economics coming from neoclassical political economy, and its critical development by non-orthodox political economists. Economists have begun to take seriously differences in institutional structures across developing countries as an explanation of differences in their performance. Institutions are the rules of the game which structure human activity. Property rights, firms and the state are all institutions. Institutions affect economic efficiency as they create or change  incentives for particular types of actions by the individuals operating under them, and they all have distributive implications which can result in conflicts and attempts to change the institutions. Institutions are therefore the product of interplay between political power and economic outcomes and this enables us to explain different economic outcomes. The course will focus in particular on the effects of rent-seeking and political activity in developing countries to change institutional structures. At the end of the course you should have a theoretical framework to understand and engage with the contemporary debates about different types of governance reform agendas, corruption, state capacity building, democratization and property rights reforms in developing countries. At the end of each topic are several sample questions which are similar to the questions you will be expected to attempt in examinations at the end of the year.

This course will delivered alongside the parallel course Political Economy of Institutions, worth 18 CATS credits. Students will have the opportunity to attend all lectures and tutorial, but the examinable component will be approximately  85% of the 18 CATS credits syllabus. The following topics will not be part of the examinable component of this course: Week 6 Democracy and Development

Objectives and learning outcomes of the course

On successful completion of the course, students will be able to:
1.      Relate how institutional performance in developing countries is influenced by the economics of institutions and the role of political economy
2.      Discuss the transition to capitalism and identify institutions appropriate to that transition
3.      Summarize new institutional approaches in contrast to mainstream policy agendas

Workload

Teaching takes place through a weekly 2 hour lecture and 1 hour tutorial

Method of assessment

Assessment weighting: Exam 70% / Coursework 30% (1 essay). Resubmission of coursework regulations apply.

Suggested reading

Background Reading
Khan, M and Jomo K.S. eds. Rents, Rent-Seeking and Economic Development. Cambridge: Cambridge University Press, 2000. Introduction, Chapters 1 & 2.
Hariss, J., Hunter, J. and Lewis, C.M., (eds), The New Institutional Economics and Third World Development, London: Routledge, 1995.
North, D., Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press, 1990
Khan, M. State Failure in Developing Countries and Strategies of Institutional Reform, in Tungodden, Bertil, Nicholas Stern and Ivar Kolstad (eds) Annual World Bank Conference on Development Economics Europe: Toward Pro-Poor Policies: Aid Institutions and Globalization, Oxford: Oxford University Press and World Bank 2004. Available online.