Devlopment Theories

Question 1

Keynesian growth theory?

Answer 1

process of capital of formation is determined by savings and investment
• Domestic savings are chanelled to productive investments such as manufacturing which result –usually-in high productivity
•Growth is market driven as income levels rise, savings rises and frees capital for alternative investment

Question 2

Modernization Theory?

Answer 2

noted previously this theory suggests that economic dimension alone is insufficient and adds theories on institutional and social change
•Incorporates non-economic elements such as social practices, beliefs, values and customs

Question 3

NeoLiberal Development Theory?

Answer 3

• grew in the 1970s and designed to counteract impact of Keynesianism
  •New emphasis on supply side factors in development- private initiatives and market led growth
  •Move away from demand stimulation (interest rate manipulation), import substitution, state intervention and centralized planning