In this module, you will explore some structural features of less developed countries, which are often found to be very different from the structural features of developed countries. These features include demographic characteristics of the population, occupation and production structure, presence of dual economy, rural to urban migration, lower level of living, productivity, low industrialization, structural transformation, social conflict, international trade patterns, etc. The study of these features helps you understand the differences in the structure of underdeveloped and developed countries.

In this module, you will understand how the evolution of development thinking has happened in development economics. Beginning with Rostow’s stages of growth theory, you will also explore Harrod–Domar theory of economic growth. You will further discuss Lewis’s theory of economic development based on the concept of dual economy observed in surplus labor in underdeveloped countries. The other theoretical developments during the 1960s and 1970s, such as international-dependence theories and market-oriented approaches, are also discussed along with policy-oriented approaches, such as import-substitution-industrialization, export-led-industrialization, and Washington consensus.

In this module, you will learn about different theories of economic development, such as the role played by history, expectations, complementarity, and multiple equilibria. You will also explore the concept of underdevelopment as coordination failure, the concept of the poverty trap, critical minimum effort, and the Big Push to get out of the problems of coordination failure and the poverty trap. We also discuss the policy-oriented concepts of linkages and balanced and unbalanced growth. Finally, you will learn how to identify the most pressing constraints a country is facing to increase investment and economic growth.

In this module, you will learn about different theories of economic growth. This discussion is divided into proximate determinants of economic growth and deep determinants of economic growth. In the proximate determinants, you will be introduced to the difference and similarities between the neoclassical and endogenous growth models, the convergence hypothesis, and the relationship between club convergence and growth policy. Further, you will explore the deep determinants of economic growth. You will also gain an understanding of economic growth in the very long run. Specifically, you will examine Jared Diamond’s thesis on how geographic factors played a significant role in determining the prosperity of nations in the very long run. Later you will understand the relationship between geography and economic development, first through trade and then through disease and agricultural productivity. You will also gain an insight into the comparative role of geography and institutions in determining the prosperity and poverty of nations in the long run.

In this module, you will learn about different concepts related to poverty and inequality. You will be introduced to the extent and magnitude of absolute poverty and the economic characteristics of the high-poverty groups. Further, the measurements of income poverty and multidimensional poverty. You will learn about the measurements of inequality. You will also understand the relationship between aggregate economic growth, poverty, and inequality and the policy options to reduce inequality and poverty.

In this module, you will be introduced to different theoretical concepts related to international trade and development. This discussion is divided into international trade theory, trade policy, and multilateral approaches to trade policy. The discussion begins with the theory of comparative advantage and the Heckscher–Ohlin model. Also, the trade policy issues, such as gains from trade, import substitution, and export promotion, are discussed. You will also learn about the reasons for the emergence of restricted trade practices and the issues of trade liberalization.