London School of Economics and Political Science (LSE)

Modules

165 Development management

Overview

This unit uses an institutional approach to examine the development process and analyse the roots of developmental and anti-developmental experiences in countries, regions and organisations. The approach draws on institutional theories from political science, sociology and the new institutional economics.

Prerequisite
None.

Aims and objectives

The objectives specifically include:
􀂃 To explain institutions and organisations as theoretical concepts.
􀂃 To analyse the development implications of different organisational forms.
􀂃 To examine coordination in the increasingly complex institutional systems that characterise the most advanced countries.
􀂃 To explore how characteristics of this complex interdependence are related to the persistence of high and low states of development.

Learning outcomes
At the end of the unit and having completed the essential reading and activities students should be able to:
􀂃 understand 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
􀂃 understand 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
􀂃 understand what stable institutional constellations comprise, how they come about, and under which conditions they perish.

Syllabus
Part 1: Theoretical background
Institutional theories: Institutions, organisations and development management; the importance of managing the transformation from less to more effective institutions.

Part 2: Governance
 

Public order and theories of the State: The origins and role of the state; Leviathan vs. social contract approaches; political accountability, order, and public policymaking 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.

Part 4: 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

Part 3: 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 ‘dedevelop’? 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.

Essential reading
North, D. 1990. Institutions, Institutional Change and Economic Performance.
Cambridge: CUP.
Brett, E.A. Forthcoming. Reconstructing Development Theory. Basingstoke:
Palgrave-Macmillan.
Assessment
This unit is assessed by a three hour unseen written examination.