Topic 1/9: An overview of the theories of

development

20 Jan 2025

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 1/9: An overview of the theories of development
Assignment No. 1 (E-tivity 1)
In the context of Embu County or your own county,
a) Describe what defines the county’s stage of
development
b) Describe two measures the county has put in place in
its current development cycle
c) In about 100 words, describe the current state of
Kenya’s economy
d) In about 100 words, provide a noble advice you
would give to the Kenya Government to stimulate
economic development.
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 1/9: An overview of the theories of development
Lesson objectives
a) To ensure that the learners are exposed to and
understand various theories of development
b) To ensure that the learners understand and
appreciate the meaning, dimensions and indicators
of development
c) To stimulate discussion among the learners on
various issues covered under the unit

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 1/9: An overview of the theories of development
Expected learning outcomes
a) Enhanced understanding among the learners on what
theories are and their relevance in contemporary
development
b) Learners who able to articulate the meaning,
dimensions and indicators of development
c) Learners who able to articulate measures necessary
for sustainable development

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 1/9: An overview of the theories of development
Conceptualization of development: Meaning,
dimensions and indicators

Key words:
 Theory
 Growth
 Development
 Sustainable development

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 1/9: An overview of the theories of development
Conceptualization of development: Meaning,
dimensions and indicators

What is a theory?
A theory is a well-substantiated explanation of an aspect
of the natural world that may incorporate laws, and/or
facts. A theory tends to explain known facts as well being
a basis that allows scientists to make predictions of what
should be observed if a theory is true. Theories are
testable. Simply put , theory is an idea used to account
for a situation or justify a course of action
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Conceptualization of development: Meaning,
dimensions and indicators
Examples of theories
(a) Darwin’s theory of evolution – the theory explains how
organisms changes over time as a result of heritable
physical or behavioral traits
(b) Child development theories - they focus on explaining
how children change and grow over the course of
childhood. These theories center on various aspects of
development including social, emotional, and cognitive
growth
(c) Economic development theories – Nationalism,
Mercantalism, Linear stages of growth model,
Structural-change theory, Neoclassical, classical etc
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Conceptualization of development: Meaning, dimensions
and indicators
Economic development theories explained
(i) Nationalism – the theory postulates that with certain
practices, a country should be able to create, bolster and
protect national economies in the context of world
markets. The theory favours state intervention as compared
to market mechanism.
(ii) Mercantalism - Mercantilism is an economic theory where
the government seeks to regulate the economy and trade in
order to promote domestic industry – often at the expense
of other countries. Mercantilism is associated with policies
which restrict imports, increase stocks of gold and protect
domestic industries – practiced mainly in European in 16-
18th centuries

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Conceptualization of development: Meaning,
dimensions and indicators
Economic development theories explained
III. Linear stages of growth model – this theory considers
that one area of focus in the economy can lead to
growth or development e.g., if in an economy savings
take place, growth is guaranteed and if growth occurs,
then development is achieved

III. Structural-change theory – this theory postulates that

economic transformation may be achieved through
technological progress and organizational change

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Conceptualization of development: Meaning, dimensions
and indicators
Economic development theories explained
V. Neoclassical theory – it focuses on supply and demand as
the driving forces behind the production, pricing, and
consumption of goods and services. In addition, one of the
most important assumption in this theory is that utility to
consumers, not the cost of production, is the most
important factor in determining the value of a product or
service.
VI. Classical theory – argues that economic growth will decline
or ceases due population increase or resource depletion.
VII. Rational behavior theory - states that people act rationally
when making economic decisions.
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Conceptualization of development: Meaning,
dimensions and indicators
Based on the numerous theories, what is
development then?

Development is not linear Development is complex

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Conceptualization of development: Meaning,
dimensions and indicators
What is development
This is a process where entities including systems register
qualitative change/shift in complexity, extent of depth in
any of the following dimensions;
Social
Political
E
Gender
Environmental
Economic
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Conceptualization of development: Meaning, dimensions and
indicators
(i) Social development
This dimension of development happens through widening of access
to basic life needs, e., education, healthcare, security, food security
(access, quality and affordability) and other amenities that define
dignified live and livelihoods.

Ref: Kenya 2010 Constitution: Chapter 4, Article 43

(1) Every person has the right--
(a) to the highest attainable standard of health, which includes the
right to health care services, including reproductive health care;
(b) to accessible and adequate housing, and to reasonable standards
of sanitation;
(c) to be free from hunger, and to have adequate food of acceptable
quality;
(d) to clean and safe water in adequate quantities;
(e) to social security; and
(f) to education.
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 Vision 2030
Vision
A globally competitive and
prosperous country with a high
quality of life by 2030
Social Pillar Political Pillar
Economic Pillar • Education and Training • Rule of Law
• Tourism • Health • Electoral and Political
• Agriculture • Water and Sanitation Processes
• Environment • Democracy and Public
• Wholesale and Retail
• Housing and Participation
Trade • Transparency and
Urbanization
• Manufacturing • Gender, Youth, and Accountability
• Business Process Vulnerable Groups • Public Administration and
Offshoring • Equity and Poverty Service Delivery
• Financial Services • Security, Peace Building,
Reduction and Conflict Management

Foundations:
Macro-economic stability, Energy, infrastructure, science, innovation,
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Conceptualization of development: Meaning, dimensions
and indicators
(i) Social development
Characteristics of socially developed societies
① Social integration (evident)
② Cohesiveness
③ Sense of unity of purpose among the populace
④ Value systems that promote equity
⑤ Individuals call themselves and act as statesmen and
women
⑥ Gender responsiveness
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Conceptualization of development: Meaning,
dimensions and indicators
(i) Social development – Example of True Statesman
‘’I was not elected to Parliament to obtain a large farm, a
big house or a transport business. My constituents sleep in
mud houses, they have no shambas, and have no business.
So I am not ashamed to be identified with them. By the
time they have these things, I will also have them for
myself’.
Immortal words of the Shujaa Bildad Kaggia, politician,
born 1922; died March 7 2005

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Conceptualization of development: Meaning,
dimensions and indicators
(i) Social development
Characteristics of socially underdeveloped societies
① Communities and people evidently divided along real or
perceived boundaries e.g., culture, ethnicity, racial,
religious
② Latent and manifest conflicts
③ Poor perceptions on the performance of households
responsibilities

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Conceptualization of development: Meaning,
dimensions and indicators
(ii) Political
This refers to the process where individuals and/or citizens
are facilitated or enabled to actively participate in political
processes without undue inducement, intimidation, and
coercion in electing representatives at all levels. In addition,
this process also entails where individuals are not hindered
from seeking any elective post.

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Conceptualization of development: Meaning, dimensions and
indicators
(ii) Political
Characteristics of politically developed society
① Diverse opinions are accommodated
② Free and fair elections at all levels
③ Well functioning and responsive electoral institutions are
established to manage political competition in free, fair and
transparent manner to the satisfaction of every one
④ Political institutions that create public confidence
⑤ Political institutions with capacity to manage conflicts
⑥ Government and state machinery operate within the law e.g.,
promoting and guarantying fundamental rights or freedom –
including freedom of speech, association, worship so long that
freedom is enjoyed within the law
⑦ Political leaders who put the interests of ordinary citizens first
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Conceptualization of development: Meaning, dimensions
and indicators
(iii) Economic development
This is the qualitative improvement of a country’s economic
outlook. Key characteristics of economic development include;
 Sustainable utilization of a country’s natural capital e.g.,
water, soils, forests, fisheries, and wildlife among others
 Enhanced capacity of the country’s populace to utilize
available resources for wealth creation
 Equitable distribution of costs and benefits associated with
wealth creation
 Ability of the country to diversify wealth creation sources
including production of goods and services
 Ability of the country to utilize existing technologies and
innovations in efficient use of resources
 Ability of a country to innovate

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Conceptualization of development: Meaning,
dimensions and indicators
(iii) How is economic development measured?
This is measured through the Human Development Index
(HDI) which takes into consideration the following aspects;
 Average life expectancy (male vs females)
 Levels of literacy
 Quality of the environment
 Levels of satisfaction with government services
 Food security (access, quality, and accessibility)
 Standard of living
 Gross Domestic Product
 Occupational structure of labour force
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Conceptualization of development: Meaning,
dimensions and indicators
(iv) Economic growth
This is the quantitative expansion of the country’s economy
which is measured through the Gross Domestic Product
(GDP) or the Gross National Product (GNP)

GDP is the final value of the goods and services produced

within the geographic boundaries of a country during a
specified period of time, normally a year. GDP growth rate
is an important indicator of the economic performance of a
country. Current GDP for Kenya =

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Conceptualization of development: Meaning,
dimensions and indicators
(v) Environmental/ecological development
Basically refers to a situation where societies live in a clean,
safe and health environment. Key characteristics or
outcomes of environmental development include;
 Inter- and intra-generational provisioning of
environmental/ecological services, e.g., clean air, clean
water, carbon sequestration
 Wise use of water resources including surface, sub-
surface and ground water, water towers or water
catchment areas – with 5 key ones being Mt Kenya,
Aberdares, Mau Complex, Cherengani, and Mt Elgon
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Conceptualization of development: Meaning,
dimensions and indicators
(v) Environmental/ecological development (Cont’d)
 Prudent management of a country’s wildlife heritage –
wildlife, biodiversity, national parks, game reserves,
wildlife migratory corridors and wildlife dispersal areas
 Proper waste management, effective drainage system
and high levels of sanitation
Following 2 slides are demonstrations of poor waste
disposal

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 Dandora Landfill - 2020

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 Ngong Landfill - 2022

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 Key elements of
sustainable
development
Economic
developme Economic
nt growth

Sustainable
Environmen Development
tal Dev

Social dev

Political Dev

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 Stages of economic growth and development: Ref.
Rostow’s 5 stages

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Summary on development: Meaning, dimensions and
indicators
 It is a continuous process
 Basis for improving living conditions and livelihoods
 Balancing act on human needs and natural capital
 Establishes opportunities for advancement
 Stability and peaceful co-existence of peoples and
societies
 Enhances trust and confidence in systems
 Enhances institutionalization of fair and just value
systems
 Commercialization, industrialization and technological
advancement across the sectors of the economy

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 Quiz 1
Review the following theories and answer the associated questions
1) Modernization Theory: What are the key stages proposed by
Modernization Theory, and how do they explain the transition from
traditional to modern economies?
2) Dependency Theory: How does Dependency Theory describe the
relationship between developed and developing countries, and
what implications does this have for economic development?
3) Structural Change Models: What role do structural changes, such
as shifts from agriculture to industry, play in economic
development according to these models?
4) Neoclassical Growth Theory: How does Neoclassical Growth
Theory explain long-term economic growth, and what factors are
considered essential?

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 Key references
1. "A Simple Theory of Economic Development at the Extensive Industry Margin" by
Ricardo Hausmann, Frank Neffke, and Marko Pandalai-Nayar (2020).
This paper revisits the observation that wealthier countries tend to produce a
broader variety of goods. It analyzes economic development through export
diversification and introduces a model of economic development at the extensive
industry margin.

2. "Endogenous Structural Transformation in Economic Development" by Justin Y. F.

Lin and Haipeng Xing (2020).
This research extends optimal growth models to consider how countries develop
their economies through endogenous structural transformation and efficient
resource allocation within a market mechanism.

3. "Economic Development and the Structure of Cross-Technology Interactions" by

Anton Bondarev and Frank C. Krysiak (2021).
This study examines how the structure of knowledge spillovers between technologies
influences growth prospects and patterns, highlighting the importance of cross-
technology
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interactions in economic development. 32
 Key references
4. "Multidimensional Economic Complexity and Inclusive Green Growth" by Viktor
Stojkoski, Philipp Koch, and César A. Hidalgo (2022).
This paper combines trade data with information on patent applications and research
publications to build models that improve the ability of economic complexity metrics
to explain international variations in inclusive green growth.

5. "Economic Performance Through Time: A Dynamical Theory" by Daniel Seligson

and Anne McCants (2019).
This work offers a dynamical theory of economic development, providing a new
measure of the economy and an explanation for the persistence of disparities in
global economic performance

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 Topic 2/9: Unpacking sustainable
development: socio-economic development,
modernization, economic growth and
development
27 Jan 2025

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