Development Finance



Credits / Language / Semester

2Credits / English / Winter


This course aims at developing better understanding of the role of finance for economic development. In doing so, this course will take both micro and macro aspects of development financing by combining theoretical, empirical and case-study based analysis to deepen the understanding. The course is divided into two distinct parts. In the first part we look into the macro aspects (top-down approach) of development finance by examining the theory; supported by the evidence to explore the interlink between finance and growth. Then the course continues on examining various external and internal financing strategies used by the government and the impact of such policies on development. The second part of the course will deal with the micro aspect of development financing. In this part topics of rural credit market and the emergence of micro-credit and its impact will be studied. Then we will continue on evaluating recent models of micro-insurance, inclusive growth as well as Non-Government Organizations (NGOs) role on development financing for better understanding of the development finance from the bottom-up approach.


Development, Finance


Starting from Winter semester (2013/10/01) Every Monday, period 5.

Teaching Methods

a) Class lecture;
b) Interactive in class participation, debates and discussions;
c) Reading assignments;
d) Class presentations;
e) Case studies.


a) Active class participation (5%)
b) Presentation (15%)
c) Short Quiz (40%)
d) Final Exam (40%)

Required Textbooks

1. Todaro, Michael P. and Stephen C. Smith (2011), Economic Development, Eleventh Edition, Addison Wesley
2. Armendariz B. and J. Morduch (2005) “The Economics of Microfinance”- The MIT Press
3. Ray, Debraj (1998): Development Economics. Princeton University Press.

In addition, many journal articles will be used as references throughout the course. The references will be updated before class starts and as the course proceeds.

Reference Books

1. Fry, Maxwell J. (1995): Money, interest, and banking in economic development, 2nd edition- Johns Hopkins.
2. Easterly, William (2002), The Elusive Quest for Growth by, MIT Press
3. Basu, K (1997), Analytical Development Economics, MIT Press
4. William, E. (2006). "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good." New York, NY.
5. Banerjee, A. V. (2007). Making aid work, The MIT Press

Notes on Taking the Course

This course requires to have preliminary knowledge of calculus, micro and macro economics. Some basic knowledge of econometrics will be a plus.

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Miscellaneous Information

The details of reading assignments and presentation will be discussed in the class. By and large these reading assignments would be selected from the text books, newspaper or from journal articles. One pre-selected student will present such reading assignment in the class to provoke discussions, debates and policy ideas.

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