MEX 3504 Development Economics

Course Code MEX 3504
Course Title Development Economics
Number of Credits 05
Year 03
Medium of instructions English and Sinhala

Development Economics is a vastly important subject, but it is not a formal or theoretical subject. It is a practical subject which must expect to call upon any branch of theory. This course covers different aspects of economic development. Economic development deals with problems and prospects of economic development in developing countries. This course also provides an introductory overview of development issues facing developing countries, alternative policies available and how the policy regimes should be managed. Students will be encouraged to examine the issues and remedies critically, drawing examples and experiences of both the developed and developing nations, in the light of the emerging global developments.

a) To provide students theoretical knowledge about development models
b) To make the students aware of the current economic issues faced by developing countries
c) To provide knowledge about main economic issues faced by Sri Lanka and selected policies as a remedies.
d) To strengthen the students with capability of solving present development problems in the changing world

At the end of the course, students are required to have an,
a) Understanding on current economic issues faced by developing countries.
b) Understanding on available policies as solution to economic issues faced by Sri Lanka
c) Capability to apply the learn models to solve present development problems in the world and within the institutions in a changing environment.
d) Skills in freethinking potentials.



No. of Hours


Main Topics Sub Topics  
1)  Introduction to Development   Economics and characteristics of developing nations 1.1 Development; traditional and modern definitions

1.2 Nature of  Development Economics

1.3 Definitions on Development Economics

1.4 Characteristics of developing nations


10 hrs

2) Theories of Economic   Development 2.1  Rostow’s stages of growth

2.2  Harrod- Domar Growth model

2.3  Structural change model

10 hrs
3)  The environment & Economic Development and Externality problem 3.1  Externalities

3.2  Types of externalities

3.3  Solutions to externalities

3.4  Government policies toward externalities

10 hrs
4) Some critical Development challenges in Sri Lanka 4.1  Middle income trap

4.2  Macroeconomic challenges

4.3  Human capital challenges

4.4  Trade policy issues

4.5  Political challenges

4.6  Social & Cultural issues

15 hrs
5) Development Strategies 5.1  Diversification of industrial base

5.2  Agricultural Development

5.3  Free Trade

5.4  Structural Changes

15 hrs
6)  Present development policy of the government: Mahinda Chinthana 6.1  Aviation hub

6.2  Knowledge hub

6.3  Commercial hub

6.4  Naval hub

6.5  Energy hub

15 hrs
Mode of study Self study/ Seminars
Mode of Evaluation Final Exam 100%

a) Micheal Todaro and Stephen P smith (2003), Economic Development, 8th edition, Pearson Education
b) Annual Report, Central Bank of Sri Lanka
c) D Colman and f Nixon (1994), Economics of Change in Less Developed Countries, Harvester Wheatsheaf.
d) Economic Review (People’s Bank), Central Bank Staff Studies, Satahana.
e) Gircharan Das, (2002), India Unbound, Penguins
f) Business pages of News Papers, Daily FT, The Economist, The Bottom Line.