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A diagnostic hypothesis is the product of a series of analytic and critical-thinking exercises that provides a comprehensive picture of the cause-effect linkages among various problems (gaps) that together erode resources in a given community.
The stronger a diagnostic hypothesis, the more likely it is that a Theory of change informing the prioritization of development initiatives will indeed reach the long-term goal articulated by the community.
Source: Evaluation Exchange (by Harvard Family Research Project): An Introduction to Theory of Change
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