- Institutional theories: Institutions, organisations and development management; the importance of managing the transformation from less to more effective institutions.
- Public order and theories of the State: The origins and role of the state; Leviathan vs. social contract approaches; political accountability, order, and public policy-making in conditions characteristic of less-developed countries.
- Democracy and decentralisation: Fiscal architecture, hierarchical relations within government, and government responsiveness; residual power; interest groups vs. civic groups, organisation and voice, and political representation.
- International aid and international governance: Aid, conditionality and national sovereignty; the concept and limitations of ‘global governance’; its effects on trade and aid flows; their ultimate effects on countries’ development prospects.
Private provision: The market and beyond
- Hierarchy, co-operation & incentives in private firms: Pure market exchange; the theoretical origins of firms; the role of hierarchy in efficiency and coordination.
- Real firms, small firms: microentrepreneurs and the informal sector: Theory of the firm applied to real, third-world market conditions; the origins of the informal sector; prospects for its development.
- Common resources and private solutions for collective action: The economic characteristics of common property resources; the pervasiveness of Tragedies of the Commons and environmental degradation in LDCs; implications for efficiency; possibilities for private solutions and collective action; empirical examples from LDCs
Empirical studies of transformation and decomposition
- Institutions vs. geography vs. values: Why are some countries rich and others poor? Competing theories of the determinants of development; empirical evidence for each.
- Analytical narratives on development failure: Why do some countries ‘de-develop’? The cases of Venezuela, Zimbabwe and Pakistan; cross-country evidence of development failure.
- Analytical narratives on development success: Why do some countries succeed? Can their success be replicated? The cases of China and Botswana; cross-country evidence of development success.
- Towards a theory of development management: A synthesis of the theory of parts 1 and 2 with the empirics of part 3; the determinants of development success; successful management of the transition to a rapid development process.
If you complete the course successfully, you should be able to:
- Explain the role of incentives in political behaviour and economic performance
- Map the links from different organisations and institutions to the incentives they put in place
- Compare and contrast why certain organisations are better suited to certain types of services and/or environments than others
- Map the links from incentive systems to micro and macro-level economic performance
- Discuss what stable institutional constellations comprise, how they come about, and under which conditions they perish.
Unseen written exam (3 hrs).
- North, D. Institutions, Institutional Change and Economic Performance. Cambridge: CUP.
- Brett, E.A. Reconstructing Development Theory. Basingstoke: Palgrave-Macmillan.
- Putnam, R.D. Making Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton University Press.
- Rodrik, D. (ed.) In Search of Prosperity: Analytical Narratives on Economic Growth. Princeton: Princeton University Press.
Course information sheets
Download the course information sheets from the LSE website.