Poverty and Inequality in Latin America

Economics 241: Poverty and Inequality in Latin America

Wellesley College (Fall 2006)

Patrick McEwan

Office: 416 Pendleton East

Office hours: Mondays (1:30-4:30). Please email if that time isn’t convenient, and we can make other arrangements.

Phone: 781/283.2987

Email: pmcewan at wellesley dot edu

URL: http://www.wellesley.edu/Economics/mcewan/

This course will acquaint you with issues in Latin America’s economic development, especially the reduction of poverty and inequality. It is divided into three parts. The first will provide a general overview of development: What do we mean by this term? How should we measure it? How close is Latin America to being developed? The second part will tell the story, in broad strokes, of Latin American development during the 20th century. What policies did countries pursue across the region? How successful were the policies in promoting development? The third part will discuss recent policies in education and health that are aimed at reducing poverty and inequality. It will emphasize the importance of carefully evaluating whether the policies are successful or not.

Prerequisites

You must have taken Economics 101 and 103. The course will presume knowledge of basic concepts in microeconomics and statistics. If you do not meet these prerequisites, please contact me.

Requirements

1. Two exams (in-class, closed book), worth 50%.

2. Two problem sets, worth 15%.

3. A final paper, approximately 12-15 pages in length, worth 25%.

4. Class participation, worth 10%.

Further details on the assignments will be provided in class. If you have a disability, please contact Barbara Boger (learning/attention disability) or Jim Wice (physical disability). Their offices are located in the Pforzheimer Center in Clapp Library.

Readings

There is no textbook. Assigned readings are available via the links below, or as PDF files on the FirstClass conference.

Class Schedule

Part 1: How developed is Latin America?

9/7 Course overview

9/11 Defining and measuring “development”

READING: Perkins, D. H., Radelet, S., & Lindauer, D. L. (2006). Economics of development (6th ed.). New York: W. W. Norton, pp. 31-56

9/14 The Millennium Development Goals in Latin America

READING: Inter-American Development Bank. (2005). The Millennium Development Goals in Latin America and the Caribbean: Progress, Priorities and IDB Support for Their Implementation. Washington, DC: Inter-American Development Bank, pp. vii-38.

9/18 Measuring poverty

READING: Perkins, D. H., Radelet, S., & Lindauer, D. L. (2006). Economics of development (6th ed.). New York: W. W. Norton, pp. 206-224.

9/21 Measuring inequality

READING: Perkins, D. H., Radelet, S., & Lindauer, D. L. (2006). Economics of development (6th ed.). New York: W. W. Norton, pp. 190-206.

9/25 Data used to measure poverty and inequality

READING: Explore the website of the World Bank’s Living Standard Measurement Study (LSMS). Scan the survey form of Guatemala’s ENCOVI household survey (available in Spanish or English).

PROBLEM SET 1 HANDED OUT

9/28 An example: poverty in Guatemala

Reading: World Bank. (2003). Poverty in Guatemala. Report No. 24221-GU. Washington, DC: World Bank, pp. 7-29.

Part 2: A brief history of Latin American development

10/2 The colonial roots of poverty and inequality

READING: Engerman, S. L., & Sokoloff, K. L. (2002). Factor endowments, inequality, and paths of development among New World economies. Economía, 3, 41-109.

10/5 Import substitution industrialization in the 20th century

READING: Franko, P. (2003). The puzzle of Latin American development (2nd ed.). Lanham: Rowman & Littlefield, pp. 51-74.

PROBLEM SET 1 DUE

10/9 NO CLASS (Fall Break)

10/12 Debt (and crisis) in the 1980s

READING: Franko, P. (2003). The puzzle of Latin American development (2nd ed.). Lanham: Rowman & Littlefield, pp. 79-108.

10/16 Structural reform in the 1990s and beyond

READING: (1) The Economist. (2003, August 24). Wanted: A new regional agenda for economic growth. The Economist, and (2) Lora, E., & Panizza, U. (2003). The future of structural reform. Journal of Democracy, 14(2), 123-137.

10/19 NO CLASS

10/23 MIDTERM EXAM

Part 3: Policies to reduce poverty and inequality

10/26 The evaluation of development policies

READING: Duflo, E., & Kremer, M. (2004). Use of randomization in the evaluation of development effectiveness. In G. K. Pitman, O. N. Feinstein, & G. K. Ingram (Eds.), Evaluating development effectiveness. New Brunswick: Transaction Publishers.

10/30 Education

READING: Perkins, D. H., Radelet, S., & Lindauer, D. L. (2006). Economics of development (6th ed.). New York: W. W. Norton, pp. 275-313.

11/2 Education

11/6 Education

READING: Jamison, D. T., Searle, B., Galda, K., & Heyneman, S. P. (1981). Improving elementary mathematics education in Nicaragua: An experimental study of the impact of textbooks and radio on achievement. Journal of Educational Psychology, 73(4), 556-567.

PROBLEM SET 2 HANDED OUT

11/9 Health and nutrition

READING: Perkins, D. H., Radelet, S., & Lindauer, D. L. (2006). Economics of development (6th ed.). New York: W. W. Norton, pp. 315-338.

11/13 Health and nutrition

READING: Powell, C. A., et al. (1998). Nutrition and education: a randomized trial of the effects of breakfast in rural primary school children. American Journal of Clinical Nutrition, 68, 873-879.

11/16 Conditional cash transfers

READING: Rawlings, L., & Rubio, G. M. (2005). Evaluating the impact of conditional cash transfer programs. World Bank Research Observer, 20(1), 30-55.

PROBLEM SET 2 DUE

11/20 Conditional cash transfers

READING: Skoufias, E. (2005). PROGRESA and its impacts on the welfare of rural households in Mexico. Research Report 139. Washington, DC: International Food Policy Research Institute.

11/23 NO CLASS (Thanksgiving)

11/27 Catch-up/Review

11/30 MIDTERM EXAM

12/4 Paper workshop

12/7 Paper workshop

12/11 Paper workshop