Development Economics
Instructor(s): Arianna Ornaghi
Abstract
In recent decades, social protection programs have become increasingly common in developing countries. This courses discusses the challenges that governments in these countries face when designing such programs and the taxation systems needed to finance them. We are going to address these questions by discussing state-of-the-art research in development economics, with a specific methodological focus on randomized control trails.
We are going to begin by considering the specificities of taxation systems in developing countries, by discussing the role played by taxation instruments such as the value added tax but also the role of tax administration. We are then going to consider how social protection programs can be structured to address the challenges associated with large informal sectors and weak state capacity, from how to target recipients, to what type of transfers are appropriate, to how to deal with governance issues. We will also consider the general equilibrium effects of social protection schemes and what determines demand for public services.
Importantly, throughout the course, we will discuss randomized control trials in great detail: how they can be designed to evaluate policies and understand economic mechanisms, how different implementation challenges can be addressed, and how their results should be analyzed.
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