economics assignment

chosen intervention offers the highest impact in terms of people’s opportunities. When applying this principle, one must conceive of efficiency in a dynamic context since what is efficient at one point in time may not necessarily be efficient in the long run.

• Participation and empowerment is about processes in which people act as agents – individually and as groups. It is about the freedom to make deci- sions in matters that affect their lives; the freedom to hold others accountable for their promises, the freedom to influence development in their communities. For example in the reform of an education system, human development would consider and try to draw upon the agency of children, parents, teachers, the local community, teachers unions, NGOs, the media, the ministry of education, the finance ministry, social movements and advocacy groups for education, and so on. Whether at the level of policy-making or implementation, this principle implies that people need to be involved at every stage, not merely as beneficiaries but as agents who are able to pursue and realize goals that they value and have reason to value.

• Sustainability is often used to introduce the durability of development in the face of environmental limitations but is not confined to this dimension alone.9 It refers to advancing human development such that outcomes progress in all spheres – social, political and financial – endures over time. Environmental sustainability implies achieving developmental results without jeopardizing the natural resource base and biodiversity of the region and without affecting the resource base for future generations. Financial sustainability refers to the way in which development is financed without penalizing future generations or economic stability. For example, development should not lead countries into debt traps. Social sustainability refers to the way in which social groups and other institutions are involved and support development initiatives over time, and avoid disruptive and destructive elements. Cultural liberty and respect for diversity are also important values that can contribute to socially- sustainable development.

These four principles are not exhaustive, and later chapters consider the rights- based approach, and aspects of justice and responsibility, in greater detail. But these complete the swift mapping of human development. The next section focuses in further on key terms.

Going deeper: The capability approach

The human development approach has been profoundly inspired by Amartya Sen’s pioneering works in welfare economics, social choice, poverty and famine, and development economics.10 While Sen’s works cover an extremely wide range of topics, his ‘capability approach’ has provided the basis of a new paradigm in economics and in the social sciences in general, so it is that approach upon which we concentrate.

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In 1979, at Stanford University, Sen gave the Tanner lectures on human values called ‘Equality of What?’ He questioned the adequacy of measuring equality in the space of marginal or total utility, or primary goods. And he outlined for the first time his conception of capabilities, which has been developed in greater detail since. This section introduces the capability approach – its key terms, its contrast to other approaches and how various components interrelate.

In Inequality Re-examined, Amartya Sen writes: ‘A person’s capability to achieve functionings that he or she has reason to value provides a general approach to the evaluation of social arrangements, and this yields a particular way of viewing the assessment of equality and inequality’ (1992, p5). The key idea of the capability approach is that social arrangements should aim to expand people’s capabilities – their freedom to promote or achieve what they value doing and being. An essential test of development is whether people have greater freedoms today than they did in the past. A test of inequality is whether people’s capability sets are equal or unequal.

Different phrases are used to try to communicate this basic idea in simple ways:

• The Human Development Reports describe the objective of ‘expanding people’s choices’

• Amartya Sen’s 1999 book was entitled ‘Development as Freedom’ • Sometimes the words ‘effective freedoms’ or ‘real freedoms’ are used to

emphasize that what matters is the actual possibilities not hollow promises or paper freedoms.

Box 2.5 Key terms of the capability approach

• Functionings are defined as ‘the various things a person may value doing or being’ (Sen 1999, p75). In other words, functionings are valuable activities and states that make up people’s well-being – such as being healthy and well- nourished, being safe, being educated, having a good job, being able to visit loved ones. They are also related to goods and income but describe what a person is able to do or be with these. For example, when people’s basic need for food (a commodity) is met, they enjoy the functioning of being well-nourished.

• Capability refers to the freedom to enjoy various functionings. In particular, capability is defined as ‘the various combinations of functionings (beings and doings) that the person can achieve. Capability is, thus, a set of vectors of functionings, reflecting the person’s freedom to lead one type of life or another . . . to choose from possible livings’ (Sen, 1992, p40). Put differently, capabilities are, ‘the substantive freedoms [a person] enjoys to lead the kind of life he or she has reason to value’ (Sen, 1999, p87).

• Agency is the ability to pursue goals that one values and has reason to value. An agent is ‘someone who acts and brings about change.’ (Sen, 1999, p19)

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Functionings and capabilities Formulations of capability have two parts: functionings and opportunity freedom. Sen’s significant contribution has been to unite the two concepts. We start with functionings, which are being and doing activities that people value and have reason to value. For example, being nourished, literate and employed. However, functionings are not limited, which is why the human development approach applies to rich and poor countries, and to rich and poor people. Functionings also include playing a virtuoso drum solo, having a good reputation and a warm circle of friends. At one point Sen considered whether one should ‘separate “material” functionings and capabilities (e.g. to be well- nourished) from others (e.g. being wise and contented)’ and evaluate standards of living with reference to material capabilities. In the end he suggested that living standards encompass all valued functionings. ‘It is possible that this way of drawing the line is a little too permissive, but the alternatives that have been proposed seem clearly too narrow’ (Sen, 1987, p23). So functionings relate to many different dimensions of life – including survival, health, work, education, relationships, empowerment, self-expression and culture.

A vitally important phrase in the definition of functionings is ‘value and have reason to value’. It sounds abstract but is of tremendous practical importance. Why? First, functionings are things people value. In other words, an activity or situation ‘counts’ as a functioning for that person only if that person values it. This encourages the participation and engagement of those people whose lives are at stake, in order to ascertain whether they will value changes that might ensue. Second, functionings are things people ‘have reason to value’. The capability approach introduces value judgements explicitly. Why? In fact some people do value activities that are harmful, such as a psychopath who values the triumph of the kill as much as the victim would value not being killed. The phrase ‘reason to value’ just acknowledges that given our disagreements we do need to make some social choices. The issues that will be contentious are many and include female genital mutilation, domestic violence, censorship, discrimination, air travel and so on. The capability approach raises the issue of what process, group, philosophical structure or institution has the legitimate authority to decide what people have reason to value. But while the capability approach argues that public debate and critical scrutiny are often helpful, it stops well short of proposing one particular process as relevant in all contexts, and rather depends on the agency of people acting in those contexts to address these questions themselves and build up and share their repertoire of good practices.

Capabilities are the freedom to enjoy valuable functionings. So they combine functionings with a kind of opportunity freedom. Just like a person with a pocket full of coins can buy many different combinations of things, a person with many capabilities can elect between many different functionings and pursue a variety of different life paths. For this reason, the capability set has been compared to a budget set. Capabilities are thus described as the real and actual possibilities open to a given person. As T. H. Green wrote, ‘We do

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not mean merely freedom from restraint or compulsion … when we speak of freedom as something to be so highly prized, we mean a positive power or capacity of doing or enjoying something worth doing or enjoying’ (cited in Sen, 2002b, p586).

Again, as Green’s quote implies, capabilities include only possibilities that people really value. Truly evil or utterly vacuous activities are not capabilities (although they still exist and must be reckoned with, as we shall see). Some of Sen’s descriptions of capability stress this, such as his description of capability as ‘a person’s ability to do valuable acts or reach valuable states of being’ (1993, p30). Box 2.6 illustrates the distinction between functionings and capabilities.

Box 2.6 Capabilities and functionings in Mexico

In Mexico, as well as in other parts of the world, there are people who are in the business of dealing with ‘second-hand goods’. These people go to apartment buildings and neighbourhoods to buy used things that people no longer want. This merchandise can vary from clothing, electronic appliances and tableware to CDs and toys. The profit in this business lies in buying things at a very low price and later going to open-air markets and selling them at a higher price. So the second-hand goods dealer is a collector of useless things that he can occasionally improve, which he then sells in various markets.

The case discussed here is that of Jorge Solís, who began to work as a second-hand goods dealer when he was 17 years old. This was because he and his mother were left on their own. His brothers and sisters had married and no one was there to help out with the household expenses.

People know that the second-hand goods dealer is in the neighbourhood when they hear him shouting: ‘Old appliances you want to sell?’ Consumers like me hear him and invite him to our homes to see what he is selling. One day, I saw Jorge through the window and I invited him in to see what merchandise he had.

Pedro: Sir, I didn’t hear you shout. I want to sell several things.

Jorge: The thing is that I can’t shout. I have a sore throat.

Pedro: Really? Have you taken some medicine for your sore throat?

Jorge: No, I don’t have enough money to buy medicine.

Pedro: But if you don’t buy any medicine, you won’t get better and you won’t be able to shout. As a consequence, we won’t be able to hear you and we won’t offer you our things.

Jorge: Well, yes, but there is no other way. I just hope that people see me even if they don’t hear me shout, so that I’ll be able to get something today and sell it.

What does this simple story illustrate? Jorge did not have the functionings required to be healthy and this restricted his possibilities of promoting his services and receiving a decent income. If Jorge does not have more money, he won’t be able to buy the medicine he needs for his throat to heal, and the circle of restrictions will not be broken.

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The fundamental lesson is that the basic functioning of enjoying good health can affect Jorge’s capability set. Not having good health is also limited by the lack of instrumental freedoms, such as financial means and social security. For instance, Jorge had no access to affordable health services.

Jorge earns around $2500 Mexican pesos per month (US$250) and he spends this money on food. So how can he buy medicine if he gets sick? The last time I saw Jorge, he told me that his daughter is now working and she has registered him at the Instituto Mexicano del Seguro Social (IMSS Mexican Institute for Social Security) so he can now get free medical care. Lastly, I asked him if he planned to continue working in second-hand goods; his answer was: ‘I couldn’t work in anything else. What else could I do?’

This box was written by Pedro A. Flores Crespo.

Common misunderstandings 1: Choice Through the years, a number of common misunderstandings of the capability approach, and relatedly of human development, have emerged. This section describes misunderstandings regarding the role of choice, and the extent of individualism.

A misunderstanding between ‘capability’ and ‘choice’ often surfaces, espe- cially because the Human Development Reports use the phrase ‘expand people’s choices’ instead of the rather cumbersome term of ‘capabilities’. The phrase has the advantage of being simple English. But the term ‘choices’ is prob- lematic because it does not introduce the issues of ‘value’ and ‘have reason to value’ that are central to capabilities. It is usually more important to be able to choose a career than to be able to choose between an array of rival brands of toothpaste, and human development needs to identify which choices are valu- able. Also, the phrase ‘expanding people’s choices’ seems to imply that more choices are always better – but this is not necessarily the case. Often people value having to make only a few good choices, rather than many cumbersome choices. As Sen writes, ‘Indeed sometimes more freedom of choice can bemuse and befuddle, and make one’s life more wretched’ (1992, p59). Actually the capability approach recognizes that the goal is not to expand the number of choices – it is to expand the quality of human life. Also, the term choices itself is problematic because the desirability of individual choices varies by culture, and a high value of ‘choice’ is associated with western liberal individualism. People also sometimes value making some choices together – as a family or a community – and not individually. Also, in fact many capabilities are necessar- ily the outcome of joint process, not individual decisions. The term ‘choice’ obscures this – the capability approach’s preference for terms like ‘real free- doms’ is an attempt to express the core objective in a culturally adaptable way.

In sum, ‘expanding people’s choices’ does not mean that we focus on expanding all choices – regardless of their value, and as if the more choice the better. Furthermore, most choices affect more than one person and many are often made after discussion and consultation with others. So, in trying to

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‘expand people’s choices’ or real freedoms, we are not imagining that individuals are to make choices in isolation. Indeed, many capabilities can only be created and sustained by people acting together.

Common misunderstandings 2: Individualism This brings up one further misunderstanding of Sen’s capability approach and its relation to individualism. Often people argue that the capability approach is ‘individualistic’ and by this wrongly imply that it is a western liberal approach that presumes persons act alone rather than as members of groups. To clarify in what sense the capability approach focuses only on individuals it is useful to distinguish three kinds of individualism, only the first of which is advanced by the capability approach (Robeyns, 2005, p107; 2008, p90 all quotes):

• Ethical individualism ‘postulates that individuals, and only individuals, are the ultimate units of moral concern… This, of course, does not imply that we should not evaluate social structures and societal properties, but ethical individualism implies that these structures and institutions will be evaluated in virtue of the causal importance that they have for individual well-being.’

• Ontological individualism holds that ‘society is built up from only individuals and nothing (but) individuals, and hence is nothing more than the sum of individuals and their properties.’

• Explanatory or methodological individualism presumes ‘that all social phenomena can be explained in terms of individuals and their properties.’

Many presume that the capability approach is individualistic because it focuses on what individual people (not groups) can do and be. First, we must point out that much of the work on the capability approach and human development as a whole has engaged groups specifically – women’s groups, social movements, public actions, democratic practices and so on. Also, many choices are made by groups, not individuals. The capability approach thus does not defend methodological or ontological individualism. But even if we are highly interested in groups, the capability approach, as initially framed by Sen, takes the normative position of ‘ethical individualism’ – the view that what ultimately matters is what happens to every single individual in a society.

The reason Sen supports ethical individualism is that if the smallest fundamental unit of moral concern is any group, such as the family, the social group or the community, then analyses will systematically overlook any existing or potential inequalities within these units. For example, the deprivations particular to women and children have regularly been overlooked by analyses that focus on the household. Only if we probe into the well-being of each person do we have the possibility of discovering the relative under- nutrition, or subordination, of women.

A disagreement remains among a group of authors within the capability approach about the sufficiency of ethical individualism. Critics have

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questioned whether a rejection of ontological individualism is consistent with a commitment to ethical individualism. When human beings live together, they generate something truly collective, which is more than the sum total of their individual lives and cannot be reduced to individual characteristics. Assessing states of affairs only to the extent that they have a positive or negative effect on the well-being of each individual is therefore insufficient. This group recognizes that there may be something genuinely positive in the ‘irreducibly social goods’,11 even if it has been generated by the oppression of some individuals. According to this argument, an orchestra performance has an intrinsic value even if some members are forced to play. The architectural beauty of pyramids in Egypt and medieval cathedrals in Europe provide other examples of irreducibly social goods which are of positive value to some, even if built by oppression and with terrible human cost. A full assessment of the situation from either view would trade off the contribution to future generations of people’s capabilities to enjoy beauty or other irreducibly social goods, against the lack of capabilities of some workers. That trade-off is clearly contested, with those supporting irreducibly social goods implicitly giving a greater weight to the generations that use and enjoy a good, and others arguing for a greater weight – or even for human rights, hence certain absolute protections – to be given to those whose capabilities are curtailed by the activity.

While a nuanced consideration of individual capabilities seems sufficient to evaluate a state of affairs, recognizing the vital role of social norms, groups, movements and social institutions is essential for developing policies to advance capabilities. We shall return to this point shortly when we discuss the prospective or policy role of the human development and capability approach.

Why freedom? Capabilities not just functionings As highlighted earlier, Sen’s capability approach proposes that we identify functionings – the things (within reason) people value doing and being. The focus of development and policy is then to make people free to enjoy some combination of functionings, allowing them to expand their capabilities. But, some people wonder, why should we focus on freedoms so much? Do poor people really want to have the freedom to avoid hunger and discomfort? Do they not simply want to avoid hunger and discomfort? In most cases, yes, but what is distinctive about Sen’s approach is the substantive role that freedom plays. Here are two of many reasons why freedom is important.

First, if we only focus on expanding functionings, we could do so by force, coercion, domination or colonialism. Most basic needs can be met in a prison, for example. Indeed, some countries have used force to advance functionings: for example, forced sterilization or the forced isolation of people who are HIV- positive. Focusing on freedom draws attention to social development and the value of empowerment, responsibility and informed public action.

Also, reasonable people sometimes choose to be deprived in one area of life in order to enjoy another kind of goodness. A person who is fasting is in a state

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of under-nutrition, which may seem very similar to starvation. But, in the one case, the fasting person could eat, although she chooses not to, whereas the starving person would eat if he could. Similarly, a student who could live well if he worked may instead endure poor and overcrowded housing conditions so that he might obtain a degree. People should be free to refrain from a functioning for good reasons if and when they so choose.

Note that, conceptually, ‘there is no difference as far as the space is concerned between focusing on functionings or on capabilities. A functioning combination is a point in such a space, whereas capability is a set of such points’ (Sen, 1992, p50).

Second, the notion of capability is also closely related to that of freedom. Sen defines freedom as ‘the real opportunity that we have to accomplish what we value’ (1992, p31). Freedom, he argues, has two aspects: opportunity and process. The opportunity aspect pays attention ‘to the ability of a person to achieve those things that she has reason to value’, and the process aspect pays attention to ‘the freedom involved in the process itself’ (2002b, p10). The notion of capability refers to the opportunity aspect of freedom, while the notion of agency, which is explained below, refers to the personal process of freedom.

Agency The third core concept of the capability approach is agency. Agency refers to a person’s ability to pursue and realize goals that she values and has reason to value. An agent is ‘someone who acts and brings about change’ (Sen, 1999, p19). The opposite of a person with agency is someone who is forced, oppressed or passive.

The agency aspect is important ‘in assessing what a person can do in line with his or her conception of the good’ (Sen, 1985, p206). Agency expands the horizons of concern beyond a person’s own well-being to include concerns such as solidarity with the extreme poor. From this perspective, people can be active and creative, with the ability to act on behalf of their aspirations.

Agency is related to other approaches that stress self-determination, authentic self-direction, autonomy, self-reliance, empowerment, voice and so on. The strong collective desire for agency suggests that development processes should foster participation, public debate and democratic practice.

Agency is inescapably plural in both concept and measurement. In Sen’s view:12

1 Agency is exercised with respect to the goals the person values and has reason to value.

2 Agency includes effective power as well as direct control, that is, it includes not just individual agency, but what one can do as a member of a group, collectivity or political community.

3 Agency may advance well-being or may address other goals – for example, relating to the good of one’s family or community, of other people and of art and the environment.

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4 To identify agency entails an assessment of whether the agent’s goals are in some way reasonable – a person who harms or humiliates others would not, in this view, be exerting agency.

5 The agent’s responsibility for creating or sustaining a state of affairs should be incorporated into his or her evaluation of how to act as an agent.

Box 2.7 Agency and well-being, freedom and achievement

Suppose two sisters, Anna and Becca, live in a peaceful village in England and have the same levels of achieved well-being. Both believe that the power of global corporations is under- mining democracy, and that governments should give greater emphasis to global justice. Anna decides to travel to Genoa to demonstrate against the G8 meetings, while Becca stays at home. At that moment, Anna is using her freedom of agency to voice some of her politi- cal concerns. However, the Italian police do not like the protesters and violate Anna’s civil and political rights by beating her up in prison. Anna’s achieved well-being has obviously been considerably lowered. Anna is given the option to sign a piece of paper declaring that she committed violence and is a member of an extreme-left organization (which will then give her a criminal record). If she does not sign, she will be kept in prison for an unspecified length of time. Anna therefore has a (highly constrained) option to trade her freedom of agency for a higher achieved well-being. Becca had the same potential agency but chose not to use it. She is concerned about human rights violations and the hollowing of democracy itself, but does not wish to sacrifice her achieved well-being for these goals.

Such an example shows that the distinctions Sen makes are important because, in evaluative exercises, one has to ask whether the relevant dimension of advantage is the standard of living, achieved well-being, agency achievement, well-being freedom or agency freedom. The central claim of the capability approach is that whatever concept of advan- tage one chooses to consider, the informational base of this judgement must relate to the space of functionings and/or capabilities, depending upon the issue at hand. Sen’s claim is that well-being achievements should be measured in functionings, whereas well-being freedom is reflected by a person’s capability set. A focus on agency will always transcend an analysis in terms of functionings and capabilities, and will take agency goals into account. However, it is typical of Sen’s work that he does not defend this as a closed theory or dogma: there can be good reasons to include other sources of information as well.

Extract from Ingrid Robeyns (2005) ‘The capability approach – a theoretical survey’, Journal of Human Development, vol 6, no 1, pp102–103.

Compare and contrast Human development and the capability approach arose in conversation with other approaches to development. At that time – and, indeed, even now – many were suggesting that social arrangements and development itself should focus on maximizing income, assets and other commodities in the interests of achieving happiness. This section compares and contrasts human development with competing approaches.

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Income, happiness and commodities are obviously important. The problem is that, if policies aim only to increase one of these, they might unintentionally create distortions. This is because policies that focus on only one objective tend to ignore everything else. For example, if a programme aims to maximize individual happiness alone, it may celebrate the achieve- ment of a deeply joyous political prisoner, without feeling any obligation to address the unjust detention in which the prisoner finds himself. A more thorough analysis of the situation might appreciate the prisoner’s tremendous inner strength, on the one hand, while working immediately to help free her, on the other.

The capability approach argues that focusing on capabilities is a more direct and accurate way of expanding what people really value. Focusing on capabilities introduces fewer distortions. We therefore compare and contrast the capability approach with other approaches to the evaluation of well-being that inform development policy.

With happiness Much conventional economics is based on a utilitarian approach. It assumes that the most desirable action is the one that increases people’s psychological happiness or desire-fulfilment the most. This view has made a tremendous comeback in recent years, drawing on new data on happiness and life satisfaction. Richard Layard (2005), for example, thoughtfully examines how our entire economic system could evolve if our steady and enduring purpose were to maximize a nation’s happiness, instead of its income.

This approach has tremendous appeal. Happiness seems to invite a deeper reflection upon our material goals and values. It helps people see these goals from a different perspective. Sen and others writing on the capability approach consider happiness to be ‘a momentous achievement’ to be celebrated. But when you look beyond the headlines, some concerns continue to arise.

First and perhaps most importantly, our mental utility may not track in any predictable fashion the things we really value. A poor, devout widow may become serenely reconciled to her circumstances, but this does not mean that she would not value also having warm socks and pain medication for her arthritis. Alternatively, a middle-aged man may become a hospice volunteer following the death of his mother because he wishes to share with others the inner peace he has found as a result of having come to terms with her terminal illness. In doing this, he may share the pain and tragedy of others’ lives, so his ‘happiness’ would be lower than if he did not do hospice work at all. But he would not wish for any other kind of life.

Second, happiness levels may obscure significant deprivations. Sen notes that people whose deprivations deserve systematic attention may often not be utility-deprived:

Consider a cripple…. Suppose that he is no worse off than others in utility terms despite his physical handicap because of certain

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other utility features. This could be because he has a jolly disposition. Or because he has a low aspiration level and his heart leaps up whenever he sees a rainbow in the sky. Or because he is religious and feels that he will be rewarded in [the] after-life, or cheerfully accepts what he takes to be just penalty for misdeeds in a past incarnation. The important point is that, despite his marginal utility disadvantage, he no longer (has) a total utility deprivation. (Sen, 1980, p217)

His happiness rating, being durably independent of his quality of life, would therefore not provide a very good policy indicator of the requirements needed to address his deprivations.

Third, self-reported utility may often be biased by information and social circumstances. As Sen (2002a) pointed out in the British Medical Journal, the state of Kerala, which had almost universal education and a life expectancy of 74 at the time, also had the highest self-reported morbidity in India. In contrast, Bihar, one of India’s poorest states, with a life expectancy below 60, had the lowest rate of self-reported morbidity. The objectively healthy state was subjectively health-poor and vice versa. How do we evaluate this? It seems that the low self-reported morbidity in Bihar occurred because people had less ability to assess their own health situation, and had less hope of doing anything to remedy it. Subjective data, whether on happiness or morbidity, is therefore conditioned, to a great degree, for example by our knowledge, aspirations and peer group.

With resources Many other approaches to development focus instead on cultivating different kinds of resources; these may be assets, property rights or basic needs, such as housing, food, clothing, sanitation and so on. These approaches recognize the fundamental importance of commodities and material goods to our well-being in the short- and long-term. They identify valid connections between resources and capabilities, and argue that, in order to expand capabilities and sustain these expansions, certain resources are required. In many cases, these analyses are utterly apt, and will form, as we shall see, an integral aspect of the human development approach.

But measuring resources is still different from measuring functionings. The capability approach argues that we will inadvertently make mistakes if we try to give everyone the same resources, because people’s ability to convert the same resources into functionings varies a lot. To take a simple example, the same amount of rice (or other good), will be converted into radically different levels of physical vigour by a child, a disabled teenager, an agricultural worker or an elderly person. Similarly, people who are physically impaired require greater resources to achieve mobility. Clearly, people have different abilities to convert resources into capabilities and, if policies equalize resources, they will disadvantage certain groups (in the case of food, labourers, pregnant women,

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those with allergies or with a high metabolism) in significant ways. For this reason, we should aim for greater equality in the space of functionings and capabilities directly.

Sen identifies five vital factors that are often overlooked when we focus on income and resources instead of capabilities (1999, pp70–71):

1 Personal heterogeneities (a pregnant woman will have different nutrition requirements from an elderly woman);

2 Environmental diversities (pensioners in Scotland will need a different income to keep warm in winter than pensioners in Dar es Salaam);

3 Institutional variations (parents in a country with good free public education will require a different income to educate their children than parents in a country without free public education or with poor quality schools);

4 Differences in relational perspectives (the material requirements for appearing in public without shame when having guests depends on local customs); and

5 Distribution within the family (the family income might not be spent to feed the children adequately but instead to buy the parents’ drinks).

In order to assess people’s well-being, further information is therefore needed on other aspects of people’s lives – their health, education, nutritional status, dignity, autonomy and so on.

Another problem is that people value things other than increased resources. The process of maximizing resources may have social and environ- mental costs (changes in culture and lifestyle) that people have good reason to reject. In the words of the 1990 Human Development Report: ‘The basic objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives. This may appear to be a simple truth. But it is often forgotten in the immediate concern with the accumulation of commodities and financial wealth’ (p9).

Putting it all together A bicycle provides a good example of how these different concepts relate. A person may own or be able to use a bicycle (a resource). By riding the bicycle, the person moves around town and, we assume, values this mobility (a functioning). However, if the person is unable to ride the bicycle (because, perhaps, she has no sense of balance or is not permitted to ride), then having a bicycle would not in fact result in this functioning. In this case, the access to the resource coupled with the person’s own characteristics (balance, etc.), creates the capability for the person to move around town when she wishes. Furthermore, let us suppose that the person enjoys having this capability to leap upon a bicycle and pedal over to a friend’s house for lunch – thus having this capability contributes to happiness or utility.

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Resource – Functioning – Capability – Utility bicycle mobility ability to pleasure

move around

The bicycle example illustrates how the various concepts are all related to one another when they coincide nicely. The question is: which concept do we focus on? Which will be distorted most (or least) often? The capability approach argues that utility can be distorted by personality or adaptive preferences; functionings can be enjoyed in a prison or stifled environment; and a bicycle can be useless if you cannot balance, so capability represents the most accurate space in which to investigate and advance the various forms of human well- being.

The capability approach The capability approach has often been mistaken for a theory of justice, which it is not (see Chapter 5). So what is it? Basically, while human development and the capability approach require positive, normative, predictive and policy analyses, two roles have been more visible to date: an evaluative (normative) role, and a prospective (policy) role.13

Simply put, the normative or evaluative role examines which capabilities have expanded:

[T]he capability approach is a proposition, and the proposition is this: that social arrangements should be evaluated according to the extent of freedom people have to promote or achieve functionings they value. If equality in social arrangements is to be demanded in any space – and most theories of justice advocate equality in some space – it is to be demanded in the space of capabilities. (Alkire, 2005, p122)

For example, the Human Development Index is used to rank countries according to their achievements in key functionings. Similarly, Robeyns refers to the capability approach as a ‘broad normative framework for the evaluation and assessment of individual well-being and social arrangements’:

[T]he capability approach is not a theory that can explain poverty, inequality and well-being; instead, it rather provides a tool and a framework within which to conceptualize and evaluate these phenomena. Applying the capability approach to issues of policy and social change will therefore often require the addition of explanation theories. (Robeyns, 2005, p4)

The Human Development Reports, both nationally and globally, represent a good example of the prospective or policy approach. Prospective analyses ask ‘which policy should be implemented’. A prospective application of the

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capability approach is a working set of the policies, activities, courses of action and recommendations that seem, at any given time, most likely to generate considerable capability expansion and human development. The set of policies should be considered together with the processes by which these policies were generated, and situated in terms of the contexts in which they will be more likely to deliver these benefits.

Selecting capabilities or functionings As we have seen, the capability approach is incomplete. It relies on the agency and involvement of people in different contexts to specify which capabilities to focus on, for example. As noted earlier, the development process should be assessed according to the extent to which it expands the ‘capabilities that people have reason to choose and value’.

Because of its resistance to overt prescription, the capability approach is open to many different forms of specifications regarding what constitute valuable capabilities. Even if it was not necessarily erroneous to look for a complete ordering of what constitutes human well-being, it cannot be identified in practice. This is what Sen calls the ‘fundamental and pragmatic reasons’ (Sen, 1992, p49) for incompleteness.

However, the task of specifying capabilities – for example in a participatory Poverty Reduction Strategy, in a national or local plan, for an NGO project, or for inclusion in an international multi-dimensional health measure – faces two challenges: a challenge of omission and a challenge of power. In terms of omission, groups may inadvertently overlook a capability that is quite important. Having a list of capabilities others in a similar situation have selected can help people to clarify their own set, and may bring to mind important capabilities they might have overlooked or not dared to hope for. In terms of power, there is always a danger that the powerful – be these economic elite, a particular ethnicity or gender or family or party – will select capabilities that advance their views, perhaps at the expense of minority voices.

Many authors work to address these concerns. The most prominent of these, Martha Nussbaum, has proposed a list of ten central human capabilities that, she argues, should be the basis of constitutional guarantees. In her view, having a list of capabilities is vital to avoid the issues of omission and power. She notes that, ‘just as people can be taught not to want or miss the things their culture has taught them they should not or could not have, so too can (they) be taught not to value certain functionings as constituents of their good living’ (Nussbaum, 1988, p175).

Since what people consider to be valuable and relevant can often be the product of structures of inequality and discrimination, and because not all human freedoms are equally valuable, Nussbaum argues that one might need to go beyond the incompleteness of Sen’s capability approach so that equal freedom for all can be respected.

She grounds her version of the capability approach on what she calls an ‘internalist essentialist’ position. Insofar as we recognize human beings as

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human, there should be an essentialist basis for any view about what constitutes human life and what deprives it of its full human character. Her list of central human capabilities is as follows (Nussbaum, 2000, pp78–80):

1 Life: Being able to live to the end of a human life of normal length; not dying prematurely.

2 Bodily health: Being able to have good health, including reproductive health; to be adequately nourished; to have adequate shelter.

3 Bodily integrity: Being able to move freely from place to place; to be secure against violent assault, including sexual assault and domestic violence; having opportunities for sexual satisfaction and for choice in matters of reproduction.

4 Senses, imagination and thought: Being able to use the senses, to imagine, think and reason; being able to use imagination and thought; being able to use one’s mind in ways protected by guarantees of freedom of expression with respect to both political and artistic speech, and freedom of religious exercise; being able to have pleasurable experiences and to avoid non-beneficial pain.

5 Emotions: Being able to love, to grieve, to experience longing, gratitude and justified anger, not having one’s emotional development blighted by fear and anxiety.

6 Practical reason: Being able to form a conception of the good and to engage in critical reflection about the planning of one’s life (this includes liberty of conscience and of religious observance).

7 Affiliation: (A) Being able to live with and toward others, to recognize and show concern for other human beings, to engage in various forms of social interaction; to be able to imagine the situation of another (this includes freedom of assembly and political speech). (B) Having the social bases of self-respect and non-humiliation; being able to be treated as a dignified being whose worth is equal to that of others (this includes non-discrimination).

8 Other species: Being able to live with concern for and in relation to animals, plants, and the world of nature.

9 Play: Being able to laugh, to play and to enjoy recreational activities. 10 Control over one’s environment: (A) Political: Being able to

participate effectively in political choices that govern one’s life; having the right of political participation, protections of free speech and association. (B) Material: Being able to hold property (both land and movable goods), and having property rights on an equal basis with others; having the right to seek employment on an equal basis with others; having the freedom from unwarranted search and seizure. In work, being able to work as a human being, exercising practical reason and entering into meaningful relationships of mutual recognition with other workers.

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Sen has no objection to Nussbaum’s project of eliminating the incompleteness of his approach, as long as no one’s list is seen as ‘the only route’ (1993, p47). He also supports sharing best practices in identifying important capabilities. Fixing one pre-determined authoritative list, however, undermines people’s agency. Setting a fixed and forever list of capabilities, he argues, would be ‘to deny the possibility of fruitful participation on what should be included and why’ (Sen, 2004, p77). Robeyns and Alkire have thus focused on different aspects of the process of selecting capabilities, to which we return in Chapter 6.

The key questions to keep in mind when selecting capabilities are: (1) which capabilities do the people who will enjoy them value (and attach a high priority to); and (2) which capabilities are relevant to a given policy, project or institution?

Questions

2.1 How does income help you to achieve things you value and have reason to value? What functionings do you value that income does not influence?

2.2 If you were to assess the well-being of people in your country, what information would you include? Why?

2.3 How do you go about selecting which capabilities a national poverty measure in, say, Nepal should focus on?

2.4 Tartal is a high-income country.14 Its per capita GDP is 19,000 (PPP US$), which places it below the IMF’s classification of an ‘advanced economy’, but its growth rate is 2 per cent per annum, suggesting a promising future in terms of development. Nevertheless, despite these statistics, there are a vast number of cultural and ethnic groups that have not equally shared in Tartal’s growth performance.

The country gained its independence in 1887 and adopted a new constitution in 1901. After a tumultuous political history during most of the 20th century, it deposed a 20-year dictatorship in 1982 and established democracy in 1985. Since then, the country has attempted to use its abundance of resource-rich land to modernize, globalize and achieve greater economic development.

Tartal’s current population is 150 million, with about 60 million under the age of 25 and a population growth rate of 1 per cent. Almost 70 per cent of its residents reside in rural areas, although there has been recent migration to large cities that has increased the urban population dramatically. The largest metropolitan city is the capital of Mani, with a population of 10 million; the second largest city is Safa, with a population of 7 million. Both cities are on the Pacific coastline, emphasizing the divide between an urban, prosperous coast and a rural, impoverished interior.

About 50 per cent of the population is considered ‘white’ or of ‘mixed’ European ancestry, while another 50 per cent of the population

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