Institutional and Behavioral Economics

Course Level: 
Course Open to: 
Students on-site
Academic Year: 
US Credits: 
ECTS Credits: 
Course Code: 
Course Description: 
Development Specialization and Quantitative Policy Analysis Specialization for DPP
Background and Overall Aim of the Course:
Institutional economics is the study of the evolution of economic organizations, laws, customs,
beliefs, and their interactions with the process of economic development. In the course,
we examine the role of history and both formal and informal institutions (culture) in the performance
of economies. We take a microeconomic and behavioral approach to understand
the feedback between individual beliefs, choices, and institutions and include a module on
Some examples of the topics covered in the course: How did the slave trade affect mistrust,
trade, and growth in Africa? Can an inherited culture of honor explain the history of violence
in the US South? How can false beliefs and norms persist in societies? How can we use
behavioral tools to design better institutions?
Learning Outcomes: 

Students will be able to:

  • relate institutional and behavioral mechanisms for development (e.g., laws, customs, and beliefs) on development
  • empirically analyze the role of history on development
  • widen their understanding of the development process (develop thesis ideas)
  • integrate behavioral insights for institutional design (e.g., nudging social preferences)

Short lectures will provide structure and a theoretical framework to guide the discussions
and student presentations. Besides lectures, the course will involve seminar-style discussions,
student-led paper discussions, experimental methods, and team presentations.

Paper discussion/discussion notes: 40%
Team Presentation: 20%
Final paper: 40%

There are no prerequisites for this elective (but students are expected to have
taken basic courses in statistics and economics).