Economics of development EC3044

This course will extend and deepen your understanding and application of microeconomic and macroeconomic principles.

It equips you with the theories and principles required to analyse problems of economic development. Review empirical works and analyse policy issues in the light of both economic theory and empirical evidence.

Prerequisites / Exclusions

If taken as part of a BSc degree, before attempting this course you must have already completed:

  • Macroeconomics (EC2065) 
  • Either Managerial economics (MN2028) or Microeconomics (EC2066) 

You cannot take this course with :

  • Economic policy analysis in international development DV2169.

Topics covered

Part I

  • Cross-country differences and macro models of development.
  • Measurement of economic development.
  • The characteristics of developing countries.
  • Models of economic growth and development.
  • Role of history and institutions in shaping current economic outcomes and development.

Part II

  • Markets in developing countries.
  • Understanding education in developing countries.
  • Demand for health and nutrition in developing countries.
  • Importance of agriculture and land reform in shaping lives of the poor.
  • Microfinance and forms of credit and insurance markets in developing countries.
  • Important issues related to the labour market.

Part III

  • State and the process of development.
  • Infrastructure and its impact on development.
  • Globalisation and the role of trade policy.
  • Environment and development.
  • Taxation and development, informal economy and tax evasion.
  • Development aid and its effectiveness in improving outcomes.

Learning outcomes

If you complete the course successfully, you should be able to:

  • Outline the main theories and concepts in development economics.
  • Select and analyse economic theories relevant for issues in economic development.
  • Summarise and evaluate empirical work in development economics.
  • Compare and contrast empirical work for the purpose of designing policy for a specific context.


Unseen written exam (3 hrs).

Essential reading

  • Ray, D., Development Economics. Princeton NJ: Princeton University Press, 1998.
  • Banerjee, A. and E. Duflo, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs, 2011.

Course information sheets

Download the course information sheets from the LSE website.