INSTITUTE FOR SOCIAL TRANSFORMATION
Department /Programme: PhD Governance for Social Transformation
Semester: August-December 2025 Academic Year: 2025-2026
Course Code: PSTC 8104 Course Title: Economic Development
Date and Time:
ASSIGNMENT:1
NAME: CATHERINE ALINGA OMASAJA LESASUIYAN – ST/85/004/2024
The history of economic development thought, based on the framework of Michael
Todaro and Stephen C. Smith's Economic Development, 13th Edition.
Abstract
This paper combines the historical evolution of economic development theory, as treated
in Michael Todaro and Stephen C. Smith's Economic Development (13th ed., 2020), and
uses this theory on a recent research project for Universal Health Coverage (UHC) in
Kenya. The synopsis traces the evolution from post-World War II growth-oriented
paradigms (e.g., Harrod-Domar, Rostow stages) and structural-change paradigms (e.g.,
Lewis dual-sector model) through dependency critiques, neoliberal Washington
Consensus, to the current holistic consensus. The paradigm, founded upon Amartya Sen's
capability approach, sets out development as the multilateral expansion of human
capabilities and freedoms, realized through institutional transformation and equity. The
article subsequently operationalizes such a definition of UHC, arguing that Kenya's
experiment with UHC is an exemplar effort at human-capability augmentation. The
project in this article attempts to determine how students in clinical medicine might be
utilized to bridge the policy-practice gap in UHC implementation. By its emphasis on
participatory action and structural transformation, the project actualizes Todaro and
Smith's emphasis on the empowerment of individuals, the transformation of structures,
and the construction of sustainable, equitable well-being, beyond economic measures to a
broader conception of development.
Keywords
economic development thought, capability approach, human development, Universal
Health Coverage (UHC), structural transformation, participatory development, Kenyan
healthcare system
Introduction
Economic growth has long struggled with the underlying question of how societies can
transform their economic, social, and political institutions to generate sustained increases
in living standards. According to Todaro and Smith (2020), development cannot be
reduced to rising incomes but must be achieved as a complex process that raises
individuals' options, freedoms, and well-being. For nations such as Kenya, the pursuit of
Universal Health Coverage (UHC) is a prime example of such a broad vision: it's not
only about financing healthcare but about transforming institutional, social, and human
arrangements to provide access, equity, and dignity in health. This paper discusses the
evolution of development thought with reference to Part One of Todaro and Smith's
model. It then offers a definition of development in line with UHC studies in Kenya.
The history of development economics, as chronicled by Todaro and
Smith.
Early Post–World War II Approaches
Development economics emerged as a separate field of study after World War II, as the
wave of decolonization created new nations in Africa, Asia, and Latin America.
Subsequently, the only question was how these "underdeveloped" nations could follow
the industrialization and modernization processes of the West (Todaro & Smith, 2020).
The Harrod-Domar model presumed that growth depended on investment and capital
accumulation. By this reasoning, the most important restraint was a "savings gap," and
foreign investment and foreign aid would be needed to fill the gap. Similarly, Rostow's
stages of growth theory provided that all countries passed through successive stages of
modernization, culminating in the "high mass consumption" stage. The policy implication
was self-evident: mobilize capital and invest strategically in infrastructure and industry to
trigger the "take-off" into balanced growth.
Although influential, they were criticized for their capital-overemphasis and universality
assumption, and neglect of institutional, historical, and cultural variations.
Structural-Change Theories
By the 1960s, though, theorists turned away from structural change theories that
emphasized the economy's transformation. At its center was Arthur Lewis's dual-sector
model: it held that economic growth came about by transferring "surplus labor" from
low-productivity rural agriculture to high-productivity urban industry. It highlighted
industrialization as a path to modernization.
But realities of the world soon disclosed limitations. The Harris-Todaro model
determined why excessive rural-to-urban migration created excessive urban
unemployment. Migrants were responding rationally to expected wages, although
employment was minimal. This demonstrated that market rationality at an individual
level could create socially inefficient results, making life more difficult for the linearity
of structural-change models (Todaro & Smith, 2020).
The International-Dependence Revolution
The 1970s brought a revolutionary shift with the international-dependence school,
arguing that underdevelopment was not a phase but a state driven by world inequality.
The neocolonial dependence model emphasized how multinational firms and erstwhile
colonial powers drained value from the Global South to reinforce dependency and
underdevelopment. This paradigm linked local elites to foreign powers, arguing they
were in a comprador class who benefited while the people remained poor.
Dependency theorists therefore came up with alternatives such as delinking from the
international economy, self-reliance, and socialist transformation. Although brilliant in
articulating structural exploitation, excessively negative and lacking in policy suggestions
were some of the accusations regarding these theories.
The Neoclassical Counterrevolution and the Washington Consensus
By the 1980s, the IMF and the World Bank resisted structuralist and dependency analyses
at the international level. The neoclassical counterrevolution emphasized market
liberalization, privatization, and limited state intervention. These reforms were
institutionalized in the so-called Washington Consensus.
In this view, government failures—inefficiency, mismanagement, and inefficient state-
owned enterprises—were the cause of underdevelopment. Structural Adjustment
Programs (SAPs) sought to restore efficiency by letting markets determine prices,
reducing trade barriers, and encouraging foreign investment.
Even when reforms stabilize economies, they were done at high social costs, especially in
the areas of health and education. Experience in most African nations proved that markets
were not capable of bringing even development unaided.
The Contemporary Holistic Consensus
Thinking about development since the 1990s has been a more integrated, multi-
dimensional consensus. Using mainly Amartya Sen's capability approach, development is
now broadly understood as the amplification of human capabilities and
freedoms—what people can be and do. This paradigm reinforces on health, education,
women's and men's equality, and the environment alongside income growth (Todaro &
Smith, 2020).
The Human Development Index (HDI) establishment legalized this shift by making
development gauge able in terms of income, education, and life expectancy. The 2015
Sustainable Development Goals (SDGs) also brought together the multidimensional
global development agenda and comprehensively integrated health, poverty eradication,
climate action, education and governance under one umbrella.
In this instance, development is not only economic change but also an institutional
change and a social change and empowerment that renders people empowered, better
governed which fosters sustainability.
Definition of Development for a UHC Research Project as per Todaro-
Smith framework
For a study of Kenya's Universal Health Coverage, the ideal definition of development is:
Development is the complex unfolding of human potential and liberty, facilitated through
institutional and structural transformation, to foster equity, dignity, and sustainable well-
being.
This definition, as in agreement with Todaro and Smith (2020), situates UHC as more
than a fiscal reform. It raises health as a basic capability that empowers people to live
productive, dignified lives. Health access offers "sustenance" (indispensable needs),
enhances "self-esteem" (human dignity and professional success), and achieves"freedom
from servitude" (protection against preventable disease and economic tragedy).
The UHC agenda in Kenya is thus a capacity-building initiative. It is not merely money
and hospitals but institutional change, bridging policy and practice gaps, and enlisting
such players as students of clinical medicine in championing the health workforce. This
appeals to the Todaro-Smith approach to prioritizing participation, institution reforming,
and empowering as forces behind real development
Conclusion
The evolution of economic development theory, documented by Todaro and Smith, is one
of increasingly more movement away from closed models of economic growth towards
an increasingly inclusive, people-centred trajectory. The lessons in what has worked and
what has not are laid out in each period—Harrod-Domar and Rostow, Lewis and
dependency theory, and the Washington Consensus. Today, the capability approach and
the SDG agenda alike promote convergence towards an understanding that development
must expand freedom, improve equity, and transform institutions. Universal Health
Coverage is an attainable near-term application of this paradigm for Kenya: it is the
multi-dimensional development challenge of progressing equitable access to health,
improving human dignity and freedom. With institutional reform and participatory
processes, i.e., the engagement of students and health practitioners, Kenya can work
toward UHC as a policy reform but also as a redemptive journey toward genuine human
development.
References
Todaro, M. P., & Smith, S. C. (2020). *Economic development* (13th ed., pp. 8–19,
117–137, 366–370). Pearson.
