University of Ottawa

Department of Economics

ECO6171 Economic Development: Internal Aspects

Fall 2011

Description:

This course addresses some internal aspects of economic development. In order to understand the objectives of economic development, we first start by a brief overview of the political philosophy literature (1 or 2 lectures). The remainder of the course will cover the empirical measurement of well-being in both income and non income dimensions. Some methodologies of incidence analysis of public policies on well-being will also be presented.

Slides :

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Old exams:

Midterm I (fall 2009)          

Midterm I (fall 2010)                   

Final (fall 2010)

Evaluation:

Midterm exam (October 20, 2011)          50%

Final exam                                                 50%

The only acceptable excuses for missing an exam are illness/injury, severe illness/injury/death in the family or jury duty. Third-party evidence will be required. For example, medical certificates will have to be validated by the University of Ottawa Health Service on the 3rd Floor of 100 Marie-Curie. Please consult the note from the University of Ottawa Health Service.

Academic Fraud

 Academic fraud is neither accepted nor tolerated by the University. Anyone found guilty of academic fraud is liable to severe academic sanctions. Students can refer to http://www.uottawa.ca/plagiarism.pdf for more information.

Outline

1.1 Introduction

1.2 Procedural Justice

1.3 Utilitarianism and welfare economics

1.4 Rawls’ Theory of Justice

1.5 Post-Rawlsian political philosophy

1.6 Economic efficiency

2.1 Survey issues

2.2 Income versus consumption

2.3 Price variability

2.4 Household heterogeneity

2.5 Continuous distributions

2.6 Discrete distributions

2.7 Poverty gaps

2.8 Cardinal versus ordinal comparisons

3.1 Lorenz curves

3.2 Gini indices

3.3 Social welfare and inequality

3.4 Statistical and descriptive indices of inequality

3.5 Decomposition of inequality

3.6 An historical view of inequality among World citizens

4.1 Poverty Indices

4.2 Group-decomposable poverty indices

4.3 Poverty and inequality

4.4 Poverty curves

4.5 Decomposition of poverty

4.6 Poverty in Africa I

5.1 Introduction

5.2 Income polarization

5.3 Ethnic fractionalization and polarization

5.4 A model of conflict

5.5 The Lebanese civil war

6.1 Ordering distributions

6.2 Ethical judgements

6.3 Stochastic dominance and poverty

6.4 Stochastic dominance and social welfare

6.5 Poverty in Africa II

6.6 Housing deprivation in Lebanon

7.1 Indirect tax reforms

7.1.1 Introduction

7.1.2 Notation and definition

7.1.3 Consumer welfare and government budget

7.1.4 Measurement poverty and social welfare

7.1.5 Measurement of absolute polarization

7.1.6 Identification of socially-improving tax reforms

7.1.7 Indirect tax in Mexico

7.1.8 Food subsidies in Egypt

7.1.9 Indirect tax in Jordan

7.2 Pro-poor indirect tax reforms

            7.2.1 Introduction

            7.2.2 Methodology

            7.2.4 Pro-poor tax reforms in Mexico

7.3 Transfer programs reforms

            7.3.1 Notation and definitions

            7.3.2 Measuring poverty

7.3.3 Transfer reforms

            7.3.3 Transfers programs in Mexico

8.1 Pure health inequalities

8.2 Socioeconomic health inequalities

8.3 Malnutrition inequalities in Vietnam

The exact topics of this chapter are to be determined. We will have a look on some statistics on women’s empowerment, women’s rights and domestic violence in the World.

Chapter 1 :

Arneson, R.J. (1989), Equality and Equal Opportunity for Welfare, Philosophical Studies, 56, 77-93.

Arnsperger, C. and P. Van Parijs (2003), Éthique économique et sociale, Éditions La Découverte.

Cohen, G.A. (1989), On the Currency of Egalitarian Justice, Ethics, 99, 906-944.

Dworkin, R. (1981a), What is Equality? Part 1: Equality of Welfare, Philosophy and Public Affairs, 10, 185-246.

Dworkin, R. (1981b), What is Equality? Part 1: Equality of Resources, Philosophy and Public Affairs, 10, 283-345.

Hochman, H.M. and J.D. Rodgers (1969), Pareto Optimal redistribution, American Economic Review, 59, 542-557.

Kizner, I. (1979), Perception, Opportunity, and Profit. Studies in the Theory of Entrepreneurship, University of Chicago Press.

Nozick, R. (1974), Anarchy, State and Utopia, Blackwell, Oxford.

Rawls, J. (1971), A Theory of Justice, Harvard University Press, Cambridge MA.

Rawls, J. (1993), Political Liberalism, Columbia University Press.

Roemer, J.E. (1993), A Pragmatic Theory of Responsibility for the Egalitarian Planner, Philosophy and Public Affairs, 22, 146-166.

Sen, A.K. (1980), Equality of What?, in S. McMurrin (eds), The Tanner Lectures on Human Values, Vol. 1, Cambridge University Press, Cambridge.

Steiner, H. (1994), An Essay on Right, Blackwell.

Valentyne, P. (1998), Le libertarisme de gauche et la justice, Revue économique, 50, 859-878.

Van Parijs, P. (1995), Real Freedom for All. What (if anything) can justify capitalism?, Oxford University Press, Oxford.

Chapter 2 :

Deaton, A. and S. Zaidi (2002), Guidelines for Constructing Consumption Aggregates for Welfare Analysis, Living Standards Measurement Study Working Paper No. 135, World Bank.

Duclos, J.-Y. and A. Araar (2006), Poverty and Equity, Springer.

Chapter 3 :

Atkinson, A.B. (1970), On the Measurement of Inequality, Journal of Economic Theory, 2, 244-263. 

Blackorby, C., D. Donaldson and M. Auersperg (1981), A New Procedure for the Measurement of Inequality within and Among Population Subgroups, Canadian Journal of Economics, 14, 665–685.

Bourguignon, F. (1979), Decomposable Income Inequality Measures, Econometrica, 47, 901-920. 

Bourguignon, F. and C. Morrisson (2002), Inequality Among World Citizens: 1820-1992, American Economic Review, 92, 727-744.

Cowell, F.A. (1980), On the Structure of Additive Inequality Measures, Review of Economic Studies, 47, 521-531. 

Duclos, J.-Y. and A. Araar (2006), Poverty and Equity, Springer.

Gini, C. (1921), Measurement of Inequality of Incomes, Economic Journal, 31, 124-126. 

Lorenz, M.O. (1905), Methods of Measuring the Concentration of Wealth, Publications of the American Statistical Association, 9, 209-219.

Sen, A. (1997), On Economic Inequality, Clarendon Press. 

Shorrocks, A.F. (1983), Ranking Income Distributions, Economica, 50, 3-17.

Shorrocks, A.F. (1984), Inequality Decomposition by Population Subgroups, Econometrica, 29, 363-376. 

Theil, H. (1967), The Measurement of Income Inequality, in Economics and Information Theory, Chapter 4, North-Holland.

Chapter 4 :

Duclos, J.-Y. and A. Araar (2006), Poverty and Equity, Springer.

Foster, J., J. Greer and E. Thorbecke (1984), A Class of Decomposable Poverty Measures, Econometrica, 52, 761-766. 

Jenkins, S. and P. Lambert (1997), Three ‘I’s of Poverty Curves, With an Analysis of UK Poverty Trends, Oxford Economic Papers, 49, 317-327.

Jenkins, S. and P. Lambert (1998a), Ranking Poverty Gaps Distributions: Further TIPs for Poverty Analysis, Research on Economic Inequality, 8, 31-38. 

Jenkins, S. and P. Lambert (1998b), Three ‘I’s of Poverty Curves and Poverty Dominance: Tips for Poverty Analysis, Research on Economic Inequality, 8, 39-56.

Sahn, D.E. and D.C. Stifel (2000), Poverty Comparisons Over Time and Across Countries in Africa, World Development, 28, 2123-2155. 

Ravallion, Martin (1994), Poverty Comparisons, Fundamentals of Pure and Applied Economics Volume 56, Harwood Academic Publishers.

Sen, A. (1976) Poverty: An Ordinal Approach to Measurement, Econometrica, 44, 219-231. 

Sen, A. (1997), On Economic Inequality, Clarendon Press.

Chapter 5 :

Anderson, G. (2004), Toward an Empirical Analysis of Polarization, Journal of Econometrics, 122, 1-26. 

D'Ambrosio, C. (2001), Household Characteristics and the Distribution of Income in Italy: An Application of Social Distance Measures, Review of Income and Wealth, 47, 43-64.

Duclos, J.-Y, J. Esteban and D. Ray (2004), Polarization: Concepts, Measurement and Estimation, Econometrica, 72, 1737-1772. 

Esteban, J.-M. and D. Ray (1994), On the Measurement of Polarization, Econometrica, 62, 819-852.

Esteban, J.-M. and D. Ray (1999), Conflict and Distribution, Journal of Economic Theory, 87, 379-415. 

Esteban, J.-M. and D. Ray (2005), On the Salience of Ethnic Conflict, American Economic Review, 98, 2185-2202.

Makdissi, P., T. Roy and L. Savard (2008), An Ethnic Polarization Measure With an Application to Ivory Coast Data, Working Paper 0806E, Department of Economics, University of Ottawa. 

Wang, Y-Q and K-Y Tsui (2002), Polarization Orderings and New Classes of Polarization Indices, Journal of Public Economic Theory, 2, 349-363.

Wolfson, M.C. (1994), When Inequalities Diverge, American Economic Review Papers and Proceedings, 84, 353-358.

Wolfson, M.C. (1997), Divergent Inequalities: Theory and Empirical Results, Review of Income and Wealth, 43, 401-421.

Chapter 6 :

Atkinson, A.B. (1987), On the Measurement of Poverty, Econometrica, 55, 759-764. 

Davidson, R. and J.Y. Duclos (2000), Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality, Econometrica, 68, 1435-1464.

Duclos, J.-Y. and A. Araar (2006), Poverty and Equity, Springer. 

Duclos, J.-Y. and P. Makdissi (2004), Restricted et Unrestricted Dominance for Welfare, Inequality and Poverty Orderings, Journal of Public Economic Theory, 6, 145-164.

Duclos, J.-Y. and P. Makdissi (2007), Restricted Inequality and Relative Poverty, Research on Economic Inequality, 14, 255-280.

Foster, J.E. and A.F. Shorrocks (1988a), Poverty Orderings and Welfare Dominance, Social Choice and Welfare, 5, 179-198. 

Foster, J.E. and A.F. Shorrocks (1988b), Poverty Orderings, Econometrica, 56, 173-177.

Bibi, S., P. Makdissi and M. Yazbeck, Equivalence Scales and Housing Deprivation Orderings: An Example Using Lebanese Data, forthcoming in Applied Economics. 

Ravallion, M. 1994), Poverty Comparisons, Fundamentals of Pure and Applied Economics Volume 56, Harwood Academic Publishers.

Zheng, B. (2001), Poverty Orderings: A Graphical Illustration, Social Choice and Welfare, 18, 165-178.

Chapter 7 :

Audet, M., D. Boccanfuso and P. Makdissi (2007), Food Subsidies and Poverty in Egypt: Analysis of Program Reform using Stochastic Dominance, Journal of Development and Economic Policies, 9, 57-79.

Duclos, J.-Y., P. Makdissi and A. Araar (2009), Pro-Poor Tax Reforms, With an Application to Mexico, mimeo.

Duclos, J.-Y., P. Makdissi and Q. Wodon (2005), Poverty-Reducing Tax Reforms with Heterogeneous Agents, Journal of Public Economic Theory, 7, 107-116.

Duclos, J.-Y., P. Makdissi and Q. Wodon (2005), Poverty-Dominant Transfer Programs: The Role of Targeting and Allocation Rules, Journal of Development Economics, 77, 53-73.

Duclos, J.-Y., P. Makdissi and Q. Wodon (2008), Socially-Improving Tax Reforms, International Economic Review, 49, 1505-1537.

Liberati, P. (2003), Poverty Reducing Reforms and Subgroups Consumption Dominance Curves, Review of Income and Wealth, 49, 589-601.

Lundin, D. (2001), Welfare-Improving Carbon Dioxide Tax Reform. Taking Externalities and Location into Account, International Tax and Public Finance, 8, 815-835.

Makdissi, P. and S. Mussard (2008), Analyzing the Impact of Indirect Tax Reforms on Rank Dependant Social Welfare Functions: A Positional Dominance Approach, Social Choice and Welfare, 30, 385-399.

Makdissi, P. and S. Mussard (2008), Decomposition of s-Concentration Curves, Canadian Journal of Economics, 41, 1312-1328.

Makdissi, P. and S. Mussard (2011), Rank Dependant Measures of Bi-Polarization and Marginal Tax Reforms, in J. Deutsch and J. Silber (eds.), The Measurement of Individual Well-Being and Group Inequalities: Essays in Memory of Z.M. Berrebi, 110-126, Routledge.

Makdissi, P. and Q. Wodon (2002), Consumption Dominance Curves: Testing for the Impact of Indirect Tax Reforms on Poverty, Economics Letters, 75, 227-235.

Makdissi, P. and Q. Wodon (2007), Poverty-Reducing and Welfare-Improving Marginal Public Price and Price Cap Reforms, Journal of Public Economic Theory, 9, 683-698.

Mayshar, J. and S. Yitzhaki (1995), Dalton Improving Tax Reform, American Economic Review, 85, 793-807.

Santoro, A. (2007), Marginal Commodity Tax Reforms: A Survey, Journal of Economic Surveys, 21, 827–848.

Yitzhaki, S. and J.D. Lewis (1996), Guidelines on Searching for a Dalton-Improving Tax Reform: An Illustration with Data from Indonesia, World Bank Economic Review, 10, 541-562.

Yitzhaki, S. and J. Slemrod (1991), Welfare Dominance: An Application to Commodity Taxation, American Economic Review, 81, 480-496.

Yitzhaki, S. and W. Thirsk (1990), Welfare Dominance and the Design of Excise Taxation in the Côte d'Ivoire, Journal of Development Economics, 33, 1-18.

Chapter 8 :

Gravelle H. (2001), Measuring income related inequality in health: standardisation and the partial concentration index. Health Economics, 12, 803–819. 

Van Doorslaer E. and A.M, Jones (2003), Inequalities in selfreported health: validation of a new approach to measurement, Journal of Health Economics, 22, 61–87.

Wagstaff A, P. Paci and E. van Doorslaer (1991), On the measurement of inequalities in health, Social Science and Medicine, 33, 545–557. 

Wagstaff A, E. Van Doorslaer and N. Watanabe (2003), On decomposing the causes of health sector inequalities with an application to malnutrition inequalities in Vietnam, Journal of Econometrics, 112, 207–223.

Wagstaff A and E. van Doorslaer (2004), Overall versus socioeconomic inequality in health: a measurement framework and two empirical applications. Health Economics, 13, 297–301.