The question of why some countries are rich and others poor is at the heart of development economics. In rich countries, life expectancy is high, infant mortality low, most people can read, write, and do their math, and no-one lives in absolute poverty. In many developing countries are at the opposite end of the scale on these indicators of standard of living. Why do societies evolve so differently?
This question is not only of historical interest. Great progress has been made globally in recent decades when it comes to lifting people out of poverty. This is almost exclusively due to economic growth in China, where hundreds of millions have seen their living standards improve. How to create sustained progress for the greater part of the population is thus a problem of major practical importance.
Development economics can more generally be described as applied economics from A to Z. That is, it is the application of economic theories and methods to the problems of the poor countries. Both markets and governments often function poorly there. The study of institutions as well as the effects of economic policies is therefore core issues in this branch of economics.
The researchers in the group work primarily on issues related to micro credit, foreign aid, sovereign debt, and the role of the multilateral financial institutions.