Development as Freedom
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39. On the nature and pervasiveness of such variability, see my Commodities and Capabilities (1985) and Inequality Reexamined (1992). On the general relevance of taking note of disparate needs in resource allocation, see also my On Economic Inequality, chapter 1; L. Doyal and I. Gough, A Theory of Human Need (New York: Guilford Press, 1991); U. Ebert, “On Comparisons of Income Distributions When Household Types Are Different,” Economics Discussion Paper V-86–92, University of Oldenberg, 1992; Dan W. Brock, Life and Death: Philosophical Essays in Biomedical Ethics (Cambridge: Cambridge University Press, 1993); Alessandro Balestrino, “Poverty and Functionings: Issues in Measurement and Public Action,” Giornale degli Economisti e Annali di Economia 53 (1994); Enrica Chiappero Martinetti, “A New Approach to Evaluation of Well-Being and Poverty by Fuzzy Set Theory,” Giornale degli Economisti 53 (1994); M. Fleurbaey, “On Fair Compensation,” Theory and Decision 36 (1994); Elena Granaglia, “More or Less Equality? A Misleading Question for Social Policy,” Giornale degli Economisti 53 (1994); M. Fleurbaey, “Three Solutions for the Compensation Problem,” Journal of Economic Theory 65 (1995); Ralf Eriksson and Markus Jantti, Economic Value and Ways of Life (Aldershot: Avebury, 1995); A. F. Shorrocks, “Inequality and Welfare Comparisons for Heterogeneous Populations,” mimeographed, Department of Economics, University of Essex, 1995; B. Nolan and C. T. Whelan, Resources, Deprivation, and Poverty (Oxford: Clarendon Press, 1996); Alessandro Balestrino, “A Note on Functioning-Poverty in Affluent Societies,” Notizie di Politeia (1996; special volume); Carmen Herrero, “Capabilities and Utilities,” Economic Design 2 (1996); Santosh Mehrotra and Richard Jolly, eds., Development with a Human Face (Oxford: Clarendon Press, 1997); Consumers International, The Social Art of Economic Crisis: … Our Rice Pots Are Empty (Penerz, Malopia: Consumers International, 1998); among other contributions.
40. See my “Equality of What?” (1980), Commodities and Capabilities (1985), and Inequality Reexamined (1992). See also Keith Griffin and John Knight, Human Development and the International Development Strategies for the 1990s (London: Macmillan, 1990); David Crocker, “Functioning and Capability: The Foundations of Sen’s and Nussbaum’s Development Ethic,” Political Theory 20 (1992); Nussbaum and Sen, The Quality of Life (1993); Martha Nussbaum and Jonathan Glover, Women, Culture, and Development (Oxford: Clarendon Press, 1995); Meghnad Desai, Poverty, Famine, and Economic Development (Aldershot: Edward Elgar, 1994); Kenneth Arrow, “A Note on Freedom and Flexibility,” and Anthony B. Atkinson, “Capabilities, Exclusion and the Supply of Goods,” both in Choice, Welfare and Development, edited by K. Basu, P. Pattanaik and K. Suzumura (Oxford: Clarendon Press, 1995); Stefano Zamagni, “Amartya Sen on Social Choice, Utilitarianism and Liberty,” Italian Economic Papers 2 (1995); Herrero, “Capabilities and Utilities” (1996); Nolan and Whelan, Resources, Deprivation, and Poverty (1996); Frank Ackerman, David Kiron, Neva R. Goodwin, Jonathan Harris and Kevin Gallagher, eds., Human Well-Being and Economic Goals (Washington, D.C.: Island Press, 1997); J.-Fr. Laslier et al., eds., Freedom in Economics (London: Routledge, 1998); Prasanta K. Pattanaik, “Cultural Indicators of Well-Being: Some Conceptual Issues,” in World Culture Report (Paris: UNESCO, 1998); Sabina Alkire, “Operationalizing Amartya Sen’s Capability Approach to Human Development” (D. Ph. thesis, Oxford University, 1999).
41. Even the elementary functionings of being well-nourished involve significant conceptual and empirical issues, on which see, among other contributions, Nevin Scrimshaw, C. E. Taylor and J. E. Gopalan, Interactions of Nutrition and Infection (Geneva: World Health Organization, 1968); T. N. Srinivasan, “Malnutrition: Some Measurement and Policy Issues,” Journal of Development Economics 8 (1981); K. Blaxter and J. C. Waterlow, eds., Nutritional Adaptation in Man (London: John Libbey, 1985); Partha Dasgupta and Debraj Ray, “Adapting to Undernutrition: Biological Evidence and Its Implications,” and S. R. Osmani, “Nutrition and the Economics of Food: Implications of Some Recent Controversies,” in The Political Economy of Hunger, edited by Jean Drèze and Amartya Sen (Oxford: Clarendon Press, 1990); Partha Dasgupta, An Inquiry into Well-Being and Destitution (Oxford: Clarendon Press, 1993); S. R. Osmani, ed., Nutrition and Poverty (Oxford: Clarendon Press, 1993).
42. These issues are discussed in my Tanner Lectures included in my The Standard of Living, edited by Geoffrey Hawthorn (Cambridge: Cambridge University Press, 1987), in which see also the contributions of Geoffrey Hawthorn, John Muellbauer, Ravi Kanbur, Keith Hart and Bernard Williams, and my response to these comments. See also Kaushik Basu, “Achievement, Capabilities, and the Concept of Well-Being,” Social Choice and Welfare 4 (1987); G. A. Cohen, “Equality of What? On Welfare, Goods and Capabilities,” Recherches Economiques de Louvain 56 (1990); Norman Daniels, “Equality of What: Welfare, Resources or Capabilities?” Philosophy of Phenomenological Research 50 (1990); Crocker, “Functioning and Capability” (1992); Brock, Life and Death (1993); Mozaffar Qizilbash, “Capabilities, Well-Being and Human Development: A Survey,” Journal of Development Studies 33 (1996), and “The Concept of Well-Being,” Economics and Philosophy 14 (1998); Alkire, “Operationalizing Amartya Sen’s Capability Approach to Human Development” (1999). See also the symposia on the capability approach in Giornale degli Economisti e Annali di Economia 53 (1994), and in Notizie di Politeia (1996; special volume), including contributions by Alessandro Balestrino, Giovanni Andrea Cornia, Enrica Chiappero Martinetti, Elena Granaglia, Renata Targetti Lenti, Ian Carter, L. Casini and I. Bernetti, S. Razavi, and others. See also the related symposium on entitlement analysis in Journal of International Development 9 (1997), edited by Des Gasper, which includes contributions by Des Gasper, Charles Gore, Mozaffar Qizilbash, and Sabina Alkire and Rufus Black.
43. When numerical representation of each functioning is not possible, the analysis has to be done in terms of the more general framework of seeing the functioning achievements as a “functioning n-tuple,” and the capability set as a set of such n-tuples in the appropriate space. There may also be considerable areas of incompleteness as well as fuzziness. On this see my Commodities and Capabilities (1985). The recent literature on “fuzzy set theory” can be helpful in analyzing the valuation of functioning vectors and capability sets. See particularly Enrica Chiappero Martinetti, “A New Approach to Evaluation of Well-being and Poverty by Fuzzy Set Theory” Giornale degli Economisti, 53 (1994), and her “Standard of Living Evaluation Based on Sen’s Approach: Some Methodological Suggestions,” Notizie di Politeia, 12 (1996; special volume). See also Kaushik Basu, “Axioms for Fuzzy Measures of Inequality” (1987); Flavio Delbono, “Povertà come incapacità: Premesse teoriche, identificazione, e misurazione,” Rivista Internazionale di Scienze Sociali 97 (1989); A. Cerioli and S. Zani, “A Fuzzy Approach to the Measurement of Poverty,” in Income and Wealth Distribution, Inequality and Poverty, edited by C. Dagum et al. (New York: Springer-Verlag, 1990); Balestrino, “Poverty and Functionings” (1994); E. Ok, “Fuzzy Measurement of Income Inequality: A Class of Fuzzy Inequality Measures,” Social Choice and Welfare 12 (1995); L. Casini and I. Bernetti, “Environment, Sustainability, and Sen’s Theory,” Notizie di Politeia (1996; special volume); among other contributions.
44. The relevance of the capability perspective in many different fields has been well explored, inter alia, in a number of doctoral dissertations done at Harvard that I have been privileged to supervise, in particular: A. K. Shiva Kumar, “Maternal Capabilities and Child Survival in Low-Income Regions” (1992); Jonathan R. Cohen, “On Reasoned Choice” (1993); Stephan J. Klasen, “Gender, Inequality and Survival: Excess Female Mortality—Past and Present” (1994); Felicia Marie Knaul, “Young Workers, Street Life, and Gender: The Effects of Education and Work Experience on Earnings in Colombia” (1995); Karl W. Lauterbach, “Justice and the Functions of Health Care” (1995); Remigius Henricus Oosterdorp, “Adam Smith, Social Norms and Economic Behavior” (1995); Anthony Simon Laden, “Constructing Shared Wills: Deliberative Liberalism and the Politics of Identity” (1996); Douglas Hicks, “Inequa
lity Matters” (1998); Jennifer Prah Ruger, “Aristotelian Justice and Health Policy: Capability and Incompletely Theorized Agreements” (1998); Sousan Abadian, “From Wasteland to Homeland: Trauma and the Renewal of Indigenous Peoples and Their Communities” (1999).
45. See the rather extensive literature on this, referred to in my On Economic Inequality (Oxford: Clarendon Press, expanded edition, 1997), with a substantial annex jointly written with James Foster. See also the references given in notes 38–44, above, and also Haidar A. Khan, Technology, Development and Democracy (Northampton, Mass.: Edward Elgar, 1998); Nancy Folbre, “A Time (Use Survey) for Every Purpose: Non-market Work and the Production of Human Capabilities,” mimeographed, University of Massachusetts, Amherst, 1997; Frank Ackerman et al., Human Well-Being and Economic Goals; Felton Earls and Maya Carlson, “Adolescents as Collaborators: In Search of Well-Being,” mimeographed, Harvard University, 1998; David Crocker and Toby Linden, eds., Ethics of Consumption (New York: Rowman and Littlefield, 1998); among other writings.
46. This approach is called “elementary evaluation” of the capability set; the nature and scope of elementary evaluation is discussed in my Commodities and Capabilities (1985). See also G. A. Cohen’s argument for what he calls “midfare,” in “On the Currency of Egalitarian Justice,” Ethics 99 (1989); “Equality of What? On Welfare, Goods and Capabilities” (1990); and Self-Ownership, Freedom, and Equality (Cambridge: Cambridge University Press, 1995). See Richard Arneson, “Equality and Equality of Opportunity for Welfare,” Philosophical Studies 56 (1989), and “Liberalism, Distributive Subjectivism, and Equal Opportunity for Welfare,” Philosophy and Public Affairs 19 (1990).
47. These issues have been discussed extensively in my Freedom, Rationality and Social Choice (forthcoming). See also Tjalling C. Koopmans, “On Flexibility of Future Preference,” in Human Judgments and Optimality, edited by M. W. Shelley (New York: Wiley, 1964); David Kreps, “A Representation Theorem for ‘Preference for Flexibility,’ ” Econometrica 47 (1979); Peter Jones and Robert Sugden, “Evaluating Choice,” International Review of Law and Economics 2 (1982); James Foster, “Notes on Effective Freedom,” mimeographed, Vanderbilt University, presented at the Stanford Workshop on Economic Theories of Inequality, sponsored by the MacArthur Foundation, March 11–13, 1993; Kenneth J. Arrow, “A Note on Freedom and Flexibility,” in Choice, Welfare and Development, edited by Basu, Pattanaik and Suzumura (1995); Robert Sugden, “The Metric of Opportunity,” Discussion Paper 9610, Economics Research Centre, University of East Anglia, 1996.
48. On this see my Commodities and Capabilities (1985) and “Welfare, Preference, and Freedom,” Journal of Econometrics 50 (1991). On various proposals on assessing the extent of “freedom,” see also David Kreps, “A Representation Theorem for ‘Preference for Flexibility’ ” (1979); Patrick Suppes, “Maximizing Freedom of Decision: An Axiomatic Analysis,” in Arrow and the Foundations of Economic Policy, edited by G. R. Feiwel (London: Macmillan, 1987); P. K. Pattanaik and Y. Xu, “On Ranking Opportunity Sets in Terms of Freedom of Choice,” Recherches Economiques de Louvain 56 (1990); James Foster, “Notes on Effective Freedom” (1993); Kenneth J. Arrow, “A Note on Freedom and Flexibility,” in Choice, Welfare and Development, edited by Basu, Pattanaik and Suzumura (1995); Carmen Herrero, “Capabilities and Utilities”; Clemens Puppe, “Freedom, Choice, and Rational Decisions,” Social Choice and Welfare 12 (1995); among other contributions.
49. On these issues see my Commodities and Capabilities (1985); Inequality Reexamined (1992); and “Capability and Well-Being” (1993).
50. See Rawls, A Theory of Justice (1971) and Political Liberalism (1993). In analogy with Kenneth Arrow’s famous impossibility theorem, various “impossibility theorems” have been presented in the literature about the existence of satisfactory overall indices of Rawlsian primary goods; see Charles Plott, “Rawls’ Theory of Justice: An Impossibility Result,” in Decision Theory and Social Ethics, edited by H. W. Gottinger and W. Leinfellner (Dordrecht: Reidel, 1978); Allan Gibbard, “Disparate Goods and Rawls’s Difference Principle: A Social Choice Theoretic Treatment,” Theory and Decision 11 (1979); Douglas H. Blair, “The Primary-Goods Indexation Problem in Rawls’ Theory of Justice,” Theory and Decision 24 (1988). Informational limitations play a crucial part in precipitating these results (as in the case of Arrow’s theorem). The case against imposing such informational limitations is discussed in my “On Indexing Primary Goods and Capabilities” (mimeographed, Harvard University, 1991), which reduces the rub of these alleged impossibility results, applied to Rawlsian procedures.
51. Analytical correspondences between systematic narrowing of the range of weights and monotonic extension of the generated partial orderings (based on “intersections of possible rankings”) have been explored in my “Interpersonal Aggregation and Partial Comparability” (1970) and Collective Choice and Social Welfare (1970), chapters 7 and 7*; and in Charles Blackorby, “Degrees of Cardinality and Aggregate Partial Ordering,” Econometrica 43 (1975); Ben Fine, “A Note on Interpersonal Aggregation and Partial Comparability,” Econometrica 43 (1975); Kaushik Basu, Revealed Preference of Government (Cambridge: Cambridge University Press, 1980); James Foster and Amartya Sen, “On Economic Inequality after a Quarter Century,” in my On Economic Inequality, expanded edition (1997). The approach of intersection partial orderings can be combined with “fuzzy” representation of the valuation and measurement of functionings, on which see Chiappero Martinetti, “A New Approach to Evaluation of Well-being and Poverty by Fuzzy Set Theory” (1994), and also her “Standard of Living Evaluation Based on Sen’s Approach” (1996). See also L. Casini and I. Bernetti, “Environment, Sustainability, and Sen’s Theory,” Notizie de Politeia 12 (1996), and Herrero, “Capabilities and Utilities” (1996). But even with an incomplete ordering many decision problems can be adequately resolved, and even those that are not fully resolved can be substantially simplified (through the rejection of “dominated” alternatives).
52. This issue, and its connection with both social choice theory and public choice theory, are discussed in my presidential address to the American Economic Association, “Rationality and Social Choice,” American Economic Review 85 (1995).
53. T. N. Srinivasan, “Human Development: A New Paradigm or Reinvention of the Wheel?” American Economic Review, Papers and Proceedings 84 (1994), p. 239. In presenting this argument, Srinivasan quotes, in fact, from Robert Sugden (“Welfare, Resources, and Capabilities: A Review of Inequality Reexamined by Amartya Sen,” Journal of Economic Literature 31 [1993]), whose skepticism of the possibility of valuing different capabilities is clearly less intense than Srinivasan’s (as Sugden puts his own conclusion, it “remains to be seen whether analogous metrics can be developed for the capability approach,” p. 1953).
54. Paul A. Samuelson, Foundations of Economic Analysis (Cambridge, Mass.: Harvard University Press, 1947), p. 205.
55. I have tried to address this issue in my presidential address to the American Economic Association in 1995 and in my Nobel lecture in 1998; see “Rationality and Social Choice,” American Economic Review 85 (1995), and “The Possibility of Social Choice,” American Economic Review 89 (1999).
56. These approaches have also been discussed in the new annex (authored jointly with James Foster) in the enlarged (1997) edition of my On Economic Inequality.
57. It is tempting to consider distribution measures in different spaces (distributions of incomes, longevities, literacies, etc.), and then to put them together. But this would be a misleading procedure, since much would depend on how these variables relate to one another in interpersonal patterns (what may be called the “covariance” issue). For example, if people with low incomes also tend to have low literacy levels, then the two deprivations would be reinforced, whereas if they were unrelated (or “orthogonal”), this would not happen; and if they are oppositely related, then the deprivation in terms of one variable would be, at least to some extent, ameliorated by the other variable. We
cannot decide which of the alternative possibilities holds by looking only at the distribution indicators separately, without examining collinearity and covariance.
58. In a study on poverty in Italy, in the European context, undertaken by the Bank of Italy and led by Fabrizio Barca, it is mostly this supplementary approach that is used and applied.
59. On this see Angus Deaton, Microeconometric Analysis for Development Policy: An Approach from Household Surveys (Baltimore: Johns Hopkins University Press for the World Bank, 1997). See also Angus Deaton and John Muellbauer, Economics and Consumer Behaviour (Cambridge: Cambridge University Press, 1980), and “On Measuring Child Costs: With Applications to Poor Countries,” Journal of Political Economy 94 (1986). See also Dale W. Jorgenson, Welfare, volume 2, Measuring Social Welfare (Cambridge, Mass.: MIT Press, 1997).
60. See Hugh Dalton, “The Measurement of the Inequality of Incomes,” Economic Journal 30 (1920); A. B. Atkinson, “On the Measurement of Inequality,” Journal of Economic Theory 2 (1970).
61. Particularly in my Commodities and Capabilities (1985); “Well-Being, Agency and Freedom” (1985); and Inequality Reexamined (1992).
62. Some of the more technical issues in the evaluation of freedom have been investigated in my Freedom, Rationality and Social Choice: Arrow Lectures and Other Essays (forthcoming).
Chapter 4: Poverty as Capability Deprivation
1. This view of poverty is more fully developed in my Poverty and Famines (Oxford: Clarendon Press, 1981) and Resources, Values and Development (Cambridge, Mass.: Harvard University Press, 1984), and also in Jean Drèze and Amartya Sen, Hunger and Public Action (Oxford: Clarendon Press, 1989), and in Sudhir Anand and Amartya Sen, “Concepts of Human Development and Poverty: A Multidimensional Perspective,” in Human Development Papers 1997 (New York: UNDP, 1997).