Behavioral Development Economics

This course explores the implications of behavioral economics for economic development—how it leads us to rethink what development is about and provides us with new ways to promote it.  By drawing on the rich empirical and experimental literature of recent years, the course investigates a psychologically and sociologically more realistic view of how people make decisions than the rational actor model.  In the readings in this course, decision-makers are cognitively bounded and/or have endogenous preferences, shaped by history, experience, and exposure.  Behavioral development economics gives new insights into why it is sometimes so hard to change society, and what brings about change when it does occur.  The range of equilibria and of policy tools is much broader in behavioral development economics than in traditional economics.  Large-scale economic and social change can be caused by conceptual framing effects—the influence of ideas on beliefs and preferences.  The course considers many kinds of interventions that have promoted changes in the frames through which people see themselves and the world.  The interventions include quotas in elected political positions and in education to change stereotypes; mentoring programs that increase prosocial behavior; edutainment to promote health; participatory theater to reduce domestic violence; and training to reduce aggressive behavior that has helped males from impoverished neighborhoods avoid school suspensions and recidivism.  Behavioral development economics is a new and exciting field that presents students research opportunities, especially in laboratory and field experiments.  One of the objectives of the course is to expose students to these opportunities.