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Instructor: |
606 Krannert Bldg. |
494-4235 (o) |
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Secretary: |
Marsha Slopsema |
607 Krannert Bldg. |
494-4310 (o) |
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Class Meetings: |
T Th noon-1:15 in Rawls 1071 |
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Office Hours: |
MWF noon-1:00 in my office; drop-ins welcome at other times |
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Also… |
Download this syllabus in PDF format if desired |
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News: Final exam will be Tuesday Dec. 15th, 8-10 am (in Rawls 1071). Pre-exam help sessions will be Thurs. Dec. 3rd, 4-6 pm and Weds. Dec. 9th, 5-7 pm (both in Kran 646).
Course description and objectives. In this course we analyze how the agricultural sector changes over time, interacting with government policies in both the farm and nonfarm sectors. Our goal is to explain and predict major trends and differences across countries, using economic theory to explain and predict what governments will do and how the food and farm sectors are likely to respond.
Prerequisites. The course is designed for first-year graduate students. There are no specific prerequisites, but more advanced students with stronger backgrounds in economics will be able to apply that knowledge in the context of this course. Readings are intended to be accessible for all graduate students, and can be interpreted at various levels of depth.
Structure. The course begins with a brief overview of the major policy issues and drivers of change in the food and agricultural sector around the world. We then spend the bulk of the semester building up the analytical methods and results developed by economists to explain and predict household choices, market outcomes and government policies, starting with farm households’ decisions over production, consumption and trade. We consider the role of biological constraints, first for nutrition and health, and then for farm productivity, and ask how those constraints can be overcome through technology and specialization. We ask how market prices are formed, how market outcomes respond to various kinds of changes, and what (if anything) we can infer from those outcomes about changes in the well-being of market participants. We then examine the evidence on what governments actually do across countries and over time, and try to explain those interventions in economic terms. The focus of the course is on these modern “political economy” explanations of policy choices, in which government actions are explained as the result of equilibrium among optimizing people in both the public and private sectors. The course concludes with presentation and discussion of student projects.
Readings. A complete course packet will be available; some readings are also on-line, with links provided from this syllabus and the course website.
Course requirements and grading. Grades are based on three homework assignments (10% each), a mid-term and final exam (20% each), and a course project (30%). Links to the three homework exercises are included in the electronic version of this syllabus; opening those documents online offers you live links to the data sources need to complete the assignment. For convenience, printed versions of the homework assignments are also included in the reading packet. The two exams will cover material from both the readings and the lectures, for which slides will be posted online on the day of each lecture. The final exam will be comprehensive, covering both halves of the course. As always, unforeseen events may cause changes; these would discussed in class, posted on the course website, and/or sent by email.
The course project. Your semester-long project is expected to be an analytical review of the literature on a researchable question. This will help you get started on a thesis or other research paper, offering the chance to conduct a deeper analysis of the existing literature than might otherwise be possible. A few students already have access to interesting data and an appropriate method, in which case you may wish to produce an original research paper instead of a literature review.
I can advise you on what topics are likely to prove most fruitful. Often I will encourage you to do this course project on the same topic as other work you are pursuing so as to specialize and achieve a deeper level of analysis, but sometimes it is preferable to diversify and start research on something new. Please (re)read carefully our guidelines for the course project as you work on it.
The final result of the project is a written report about five thousand words in length (15-20 double-spaced pages, plus charts and tables). You will also present the result in class, using a maximum of six slides. The written version can be longer, if more detail is justified. For class presentation the six-slide limit will be strictly enforced, to help you practice distilling results into a very brief message that can be communicated visually and in person.
To make the project as productive as possible, we will proceed in stages. Immediately after the midterm exam and October break, you must email to me a title and brief (one-paragraph) description of your chosen topic by 9:00 am on Thursday October 15th, so we can discuss them in class that day. This will allow you to learn from others’ topics and modify your goals accordingly. You must then submit a rough first draft to me for comments (due in class on Tuesday, November 17th), well before you are scheduled to present the results in class on December 1st and 3rd). The final written literature review is due on the Friday before finals week (December 11th).
CLASS TOPICS AND READINGS
Optional Background Materials (not required, not in readings packet)
World Bank, World Development Report 2008: Agriculture for Development. Washington, DC: The World Bank, 2008.
Week 1. Introduction and background
8/25 What’s ahead? Introduction to Agricultural Development and Policy
8/27
Some
context: The world food and financial crises of 2007-09
[+class profile]
Readings:
· Abbott, Philip C., “Development Dimensions of High Food Prices.” Paris: OECD, May 2009 (95 pages).
· Masters, W.A. (2008), “Beyond the Food Crisis in Africa.” African Technology Development Forum, 5(1-2): 3-13.
Week 2. Introduction to
agricultural policy
9/01 Farm and food problems: the
development paradox and structural transformation
9/03
Mouths to feed,
farmers to employ: population growth and demographic transition
Readings:
· Norton, G.W., J. Alwang and W.A. Masters (2006), “Economic Transformation and Growth”, chapter 6 in Economics of Agricultural Development (Abingdon: Routledge), 20 pages.
· Tomich, Thomas P., Peter Kilby and Bruce F. Johnston (1995), "Poverty and the Rural Economy" and "Structural Transformation" (excerpts), in Transforming Agrarian Economies (Ithaca, NY: Cornell University Press), pp. 9-19 and 35-48.
· Montgomery, Keith (2000), “Notes on the Demographic Transition.” Also available online, http://www.uwmc.uwc.edu/geography/Demotrans/demtran.htm.
Homework #1: Drivers of Change (due Thursday 9/10 in class)
Week 3. Farm households
and the “industrialization” of agriculture
9/08 No
class
9/10 Does agriculture industrialize?
Readings:
· Allen, D.W. and D. Lueck, The Nature of the Farm: Contracts, Risk and Organization in Agriculture (Cambridge: MIT Press, 2002), excerpts: “Farming in North America” (pages 17-26), “Farm Organization and Vertical Control: Historical and Current Case Studies” (pages 181-191).
Week 4. Nutrition and food markets
9/15 Nutrition, health and human capital [+feedback on hw #1]
9/17 Imperfect information and food demand
Readings:
· Haddad, L. et al., “Nutrition Trends and Implications,” chapter 2 in The Fifth Report on the World Nutrition Situation: Nutrition for Improved Development Outcomes. UN Standing Committee on Nutrition, March 2004. (An update may be available by class time, in which case it would be posted online here.)
· Masters, W.A. and D. Sanogo, “Welfare Gains from Quality Certification of Infant Foods: Results from a Market Experiment in Mali” American Journal of Agricultural Economics, 84(4, 2002): 974-989.
Homework
#2: Food prices, nutrients and the least-cost diet (due Thurs.
9/17 Tues. 9/22 in class)
Week 5. Farm productivity and technology
9/22 Input use, R&D and technology adoption
9/24 No class
Readings:
· Masters, W.A. “Paying for Prosperity”, Journal of International Affairs, 58(2, 2005): 35-64.
· Alston, J.M, M.C. Marra, P.G. Pardey and T.J. Wyatt, "Research returns redux: a meta-analysis of the returns to agricultural R&D." Australian Journal of Agricultural and Resource Economics, 44 (2, June 2000): 185-215.
Week 6. Market equilibrium and social welfare
9/29 Market equilibrium with trade and policy (short class—ends at 12:55)
10/01 Policy incidence and social welfare: value and limitations of economic surplus
Readings:
· Schmitz, A., H. Furtan and K. Baylis, “Theoretical Considerations” and “Trade and Macroeconomic Effects”, chapters 4 and 5 in Agricultural Policy, Agribusiness and Rent-Seeking Behavior. Toronto: University of Toronto Press, 2002), pages 83-118 and 119-153.
· Hines, James R., Jr., "Three Sides of Harberger Triangles." Journal of Economic Perspectives 13(2, Spring, 1999): 167-88.
Mid-term Exam (to be given Thursday 10/8 in class)
Week 7. Mid-term review and exam
10/6 Wrap-up and pre-exam review
10/8 Mid-term exam
Project Assignment #1: topic for the course project (due by 9:00 am Thurs. 10/15)
Week 8. October break
10/13 Oct. break -- no class
10/15 Discussion of exam results, course project topics and literature sources
Week 9. Discussion of student projects
10/20 No class
10/22 Measuring policies: distortions and investment
· Masters, W.A., "Guidelines on National Comparative Advantage and Agricultural Trade," APAP III Methods and Guidelines Paper No. 4001 (Bethesda, MD: Abt Associates, 1995), pages 1-29.
Week 10. Measuring policies across countries and over time
10/27 Nominal and effective protection
10/29 Aggregate measures of support
Readings:
· Tsakok, I., “Single-Market Analysis: Calculating the Impact of Price Policy,” chapter 6 in Agricultural Price Policy (Ithaca: Cornell University Press, 1990), pages 158-182.
· OECD, “Agricultural Policies in OECD Countries At a Glance 2008” (Paris: OECD, July 2008), pages 33-58.
Homework #3: Markets, market failures and policy failures (due 11/03 by email)
Week 11. Explaining policies: economics of the public sector
11/03 Markets: how far reaches the invisible hand?
The tragedy of the commons, prisoner’s dilemmas and the Coase Theorem
11/05 Policy: how well can market failures be remedied?
Optimal regulation, Pigovian taxes and economics of the second-best
Readings
· Hillman, A., “Private Solutions for Externalities” and “Public Policy for Externalities,” ch. 4.1 and 4.2 in Public Finance and Public Policy: Responsibilities and Limitations of Government (New York: Cambridge University Press, 2003), pages 228-294.
Week 12. Rent-seeking and political economy
11/10 Political economy and public choice
11/12 Review/help session
Readings
· Hillman, A., “Political Behavior and Public Policy” and “Public Policy and Rent-Seeking Behavior,” ch. 6.2 and 6.3 in Public Finance and Public Policy: Responsibilities and Limitations of Government (New York: Cambridge University Press, 2003), pages 416-460.
Project assignment #2: First draft of the literature review (due Tues 11/17 in class)
Week 13. Political economy of agricultural policy (continued)
11/17 The stylized facts of agricultural policy
11/19 Political economy theories and hypothesis tests
Readings
· Masters, William A. and Andres Garcia (forthcoming), “Price Distortion and Stabilization: Stylized Facts and Hypothesis Tests,” in K. Anderson, ed., The Political Economy of Agricultural Distortions. Washington, DC: The World Bank, 2009.
· Anderson, Kym (1995), "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries." Economic Development and Cultural Change 43(2, January): 401-424..
Week 14. Thanksgiving break
11/24 Political economy review and discussion
11/26 Thanksgiving (no class)
Project assignment #3: in-class presentation with slides (T.-Th., 12/01 or 03)
Week 15. Project presentations
12/01 Student presentations
12/03 Student presentations (cont’d) + REVIEW/HELP SESSION 4-6 PM IN KRANNERT 646
Week 16. Wrap-up and review
12/08 Overview of the policy analysis toolkit
12/09 SUPPLEMENTAL REVIEW/HELP SESSION 5-7 PM IN KRANNERT 646
12/10 Review for final exam
Project paper (due Friday 12/11 by 5:00 pm)
Final exam (Tuesday, 12/15, 8:00-10:00 am in our usual classroom)