What works in development economics

Michèle Tertilt

Development economics

What is development economics? Development economics is primarily concerned with the question of why some countries enjoy a higher standard of living than others and how to raise living standards in poor countries. Why can't African countries catch up adequately with Europe despite foreign aid and good trade relations? How can you explain China's rapid rise? But more precise questions such as “What should an education program for underdeveloped countries look like?” Or “How can we create incentives for people in endangered areas to actually use malaria nets?” Are also analyzed.

In the last decade, when the heterogeneity of the world has come to the fore, the field of development economics has shown great interest for institutions and decision-makers. Although this research area can look back on a long history, the research work and its practical relevance have increased significantly in dynamics and size in the last few decades.

This has greatly increased the perspective of this research field: from macroeconomic research, which seeks to understand the entirety of the development of a country from a bird's eye view, to the decision-making of individual people and their effects in many areas of everyday life (education, health, supply). Development economics, like many sub-areas of economics, uses both empirical and theoretical methods. Many field experiments are also carried out. The effectiveness of specific measures (e.g. building wells, malaria nets, more money for schools) is scientifically tested in field experiments. This works through randomized experiments in which only a part of the households (or sometimes a part from different villages) receives the measure, but data is also collected from so-called control households. A few years later, you can then look closely to see whether, for example, children in households that received malaria nets were less sick and were less absent from school than children in households that were not given nets. The scientific monitoring and evaluation of measures increases the understanding of which interventions work and which do not. In particular, without randomization, there is the problem that individuals / households take part in programs that may have different characteristics than those who do not take part in the program (e.g. they have better information, are more motivated, etc.). This means that in the end you don't know whether the differences between the two groups are causally attributable to the program or to the fact that they were different from the start. Randomization, on the other hand, ensures that the individuals / households in the program ("treatment group") have exactly the same characteristics as those who are not in the program ("control group") and that any differences can subsequently be attributed causally to the program. The Abdul Latif Jameel Poverty Action Lab offers a good overview of field experiments.

There are various institutions in Germany that deal with development policy. At the government level, the Federal Ministry is responsible for economic cooperation and development. The Society for International Cooperation (GIZ) implements specific projects in developing countries. KfW Development Bank accompanies and finances programs and projects in developing countries. The World Bank is responsible at the international level. Development economists, among others, work in all of these institutions.

At the University of Mannheim, lectures can already be attended in the bachelor's program that provide insights into family economics. The following professors in Mannheim deal with research in this subject area:

Prof. Katja Kaufmann
Prof. Antonio Ciccone
Prof. Markus Frölich
Prof. Michèle Tertilt