Development Economics

What is development economics?

The main question in development economics is why some countries enjoy a higher living standard than others, and what policies should be implemented to improve this situation. Exemplary research questions are “Why, despite international cooperation, have so many least developed countries still not caught up with the rest of the world?”, “How can the economic rise of China be explained?” But also, more specific questions like “How should an education program for underdeveloped countries look like?” and “What incentives are needed for people in threatened areas to use screens for malaria protection?” are analyzed.

During the last decade, globalization and the heterogeneity of the modern world have become an increasingly relevant issue. As a result, development economics has gained in relevance for institutions and policy makers alike. What’s more, the higher number of active researchers has led to a diversification of perspectives in the field itself. For example, a development economist can analyze a country as a whole (macro perspective) as well as the decision making process and its consequences for a single individual (micro perspective).

Development economics uses theoretical as well as quantitative methods. Additionally, many field experiments are conducted. They are used to scientifically measure the efficiency of particular policies e.g. fly screens for malaria protection, building of wells, investments in schools. This is done with randomized experiments where just a randomly selected subset of the participants is exposed to the policy (“treatment group”). The rest serves as a control group and will be compared to the treatment group. Without randomization, it would not be clear whether observed differences between the groups are due to the conducted treatment or were caused by systematic group differences (more intelligent, healthier, younger) that already existed before. Through such scientific analyses, we can understand which policies work and do not. For example, it can precisely be determined if children who used fly screens for malaria protection missed school less often due to illness than children who did not use screens. A good overview of field experiments can be found online at the Abdul Latif Jameel Poverty Action Lab (J-PAL).

There are various institutions in Germany involved in development economics. The Federal Ministry for Economic Cooperation and Development (BMZ) is responsible for development aid and collaboration on the international stage. The Gesellschaft für Internationale Zusammenarbeit (GIZ) focuses on the development, planning and implementation of projects and cooperates with national (German Government) and international (EU institution, UN etc.) partners, while the KfW Entwicklungsbank provides mostly financial assistance. Internationally, the World Bank is the leading development organization. In all these institutions, development economists play a significant role.

At the University of Mannheim, there are several classes for undergraduate students that offer insights into the field of development economics. The following professors in Mannheim engage in research on development economics, amongst other areas of research:

Prof. Antonio Ciccone
Prof. Markus Frölich
Prof. Michèle Tertilt
Prof. Minki Kim