14.74 | Spring 2009 | Undergraduate

Foundations of Development Policy


Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 session / week, 1 hour / session


This course explores the foundations of policy making in developing countries. The goal is to spell out various policy options and to quantify the trade-offs between them. We will study the different facets of human development: education, health, gender, the family, land relations, risk, informal and formal norms and institutions. This is an empirical class. For each topic, we will study several concrete examples chosen from around the world. While studying each of these topics, we will ask: What determines the decisions of poor households in developing countries? What constraints are they subject to? Is there a scope for policy (by government, international organizations, or non-governmental organizations (NGOs))? What policies have been tried out? Have they been successful?


A microeconomics and a statistics course are prerequisites. Examples are 14.01 Principles of Microeconomics and 14.30 Introduction to Statistical Methods in Economics. Econometrics is not a prerequisite for this class, but you will be expected to be willing to familiarize yourself with basic econometric methods. The relevant material will be covered in class and occasionally in the recitation.

Textbooks and Readings

The textbook for this class is Debraj Ray’s Development Economics. However, we will rely mostly on articles. There are many readings for this class. You are not expected to read every single article in detail, but you are expected to understand the methods used by the authors to reach their conclusions. Required readings are starred. Lecture notes will be distributed at each lecture. They are not a substitute for attending the class, but rather a study aid.

Ray, Debraj. Development Economics. Princeton, NJ: Princeton University Press, 1998. ISBN: 9780691017068.


Problem Sets

There will be about one problem set every 2 or 3 lectures (for a total of 6 problem sets), with each one due a week after it is handed out. Problem sets will contain empirical exercises, theory exercises, and written assignments developing a policy idea that will culminate in your class presentation. In the first few recitations, you will learn how to use Stata software to complete these exercises. Problem sets for this class are very important, and somewhat time-consuming.


Students will work in pairs to develop a program proposal throughout the semester that addresses a need or problem in a developing country. Students must identify a problem, research the underlying causes, and come up with a program that may help address the problem. Each group of students is required to present their findings during brief class presentations, approximately 5 minutes long. Class presentations will take place Ses #15 and #16.


This class has two equally weighted exams. There will be a mid-term exam after Ses #12 and a final exam during exam week.


The grade is based on the following activities. Class participation is expected, and will be taken into account in marginal cases (i.e. in the difficult decision between B+ and A).

Problem sets (6) 40%
Mid-term exam 25%
Final exam 25%
Class participation and presentations 10%

Course Info

As Taught In
Spring 2009
Learning Resource Types
Problem Sets
Lecture Notes
Presentation Assignments