PhD Dissertation: The capabilities approach to economic development: on diversity, complexity and relatedness

Traditional models of long-term economic development typically consider how aggregate input like labor and capital get translated into aggregate economic output. Recently, there has been a growing interest in the structure of economies as opposed to their size, considering the portfolio of specific economic activities in an economy. This not only provides a more accurate description of an economy’s state, but also gives insight in its future development. This has led to a new and extensive body of empirical research that described economic development in terms of related variety, economic complexity and relatedness.

This PhD thesis elaborates on the variety-complexity-relatedness framework based on a capabilities-based model that provides an elementary framework to theorise about diversity, complexity and relatedness jointly, as well as about their interrelations. It further makes a methodological contribution by discussing the ways in which diversity, complexity and relatedness can be measured empirically.