• Offered by Crawford School of Public Policy
  • ANU College ANU College of Asia and the Pacific
  • Classification Advanced
  • Course subject International and Developmental Economics
  • Areas of interest Economics
  • Academic career Postgraduate
  • Mode of delivery In Person
  • Offered in Second Semester 2018
    See Future Offerings

Institutions are the engine of history as they constitute much of the structure that influences behaviour, including behaviour leading to new institutions (Greif 2006).

Individuals, firms as well as the states are facing choices in their decision-makings all the time. They are not, however, making decisions independently from the economic, legal, political and social institutions in which they operate. This is because institutions embody incentives to which all players are reacting. The ways in which institutions determine incentives are not given as often assumed in theory, but are an endogenous process in which incentives could be modified or changed in response to changes in institutions. At the same time, institutions are constantly forced to readjust in responding to changes in the behaviour of individuals, firms and the state resulting from changed incentives.

The key concerns of this course are therefore twofold: How do institutions evolve in response to changes in incentives, strategies, and choices made by individuals, firms and the states; and how do institutions affect the economic performance over time. The course examines this interrelationship between incentive and institutions and the role of institutions in societal progress more broadly by, 1) introducing the essential theories of and methodologies applied in institutional economics; 2) providing the historical and empirical evidence in applications of institutional economics; 3) discussing how individuals (entrepreneurship), firms and the states are responding to changes in institutions thereby affecting economic performance; and 4) analyzing the role of institutions in economic transition. The course will apply case study method that extensively relies on institutional theories, contextual knowledge of the situation and its history, and context-specific modeling.

The course is designed for students with the undergraduate-level training in microeconomics and an interest in advanced study and policy-oriented research in institution related areas.

Learning Outcomes

On completion of the course, students will: 

  1. Be familiar with some of the key micro-level development issues, their related institutions and incentives
  2. Understand the microeconomic foundations and estimation techniques used to study these issues
  3. Be able to apply these theoretical and empirical techniques to constructively design and analyse related policy interventions for the current or other development issues.

Other Information

Course outline

Week 1:   Measures and empirics of economic development

Week 2:   Research methods in development microeconomics

Week 3:   Poverty traps, vulnerability and welfare dynamics

Week 4:   Labour productivity and market

Week 5:   Education

Week 6:   Health and nutrition

Week 7:   Intra-household resource allocation

Week 8:   Land and property right

Week 9:   Risks, saving and insurance

Week 10: Credit

Week 11: Agricultural productivity and technological diffusion

Week 12: Interlinked Agrarian contracts

Week 13: Environmental Externalities

Indicative Assessment

In-class presentation (10%) [all outcomes], Constructive policy briefs (20%) [outcome 3], Research assignment (30%) [outcome 2], Final examination (40%) [outcomes 1 & 2].

The ANU uses Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. While the use of Turnitin is not mandatory, the ANU highly recommends Turnitin is used by both teaching staff and students. For additional information regarding Turnitin please visit the ANU Online website.


One two-hour lecture per week.

Prescribed Texts

The primary textbook for this course is

Development Economics. D. Ray. Princeton University Press (1998)

This book, however, will not provide full reference of the material covered in this course. The course material will also draw on the following three books supplemented by journal articles, book chapters, and technical papers on the relevant issues.

Poor Economics: Radical Rethinking of the Way to Fight Global Poverty. A. Banerjee and E. Duflo. PublicAffairs (2011)

Portfolios of the Poor: How the World's Poor Live on $2 a Day. D. Collins, J. Morduch, S. Rutherford, and O. Ruthven. Princeton University Press (2009).

Understanding Poverty. A. Banerjee, R. Benabou and D. Mookherjee, editors. Oxford University Press (2006).


Tuition fees are for the academic year indicated at the top of the page.  

If you are a domestic graduate coursework or international student you will be required to pay tuition fees. Tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.

Student Contribution Band:
Band 3
Unit value:
6 units

If you are an undergraduate student and have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). You can find your student contribution amount for each course at Fees.  Where there is a unit range displayed for this course, not all unit options below may be available.

6.00 0.12500
Domestic fee paying students
Year Fee
2018 $4080
International fee paying students
Year Fee
2018 $5400
Note: Please note that fee information is for current year only.

Offerings and Dates

The list of offerings for future years is indicative only

Second Semester

Class number Class start date Last day to enrol Census date Class end date Mode Of Delivery
8553 23 Jul 2018 30 Jul 2018 31 Aug 2018 26 Oct 2018 In Person

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