Amartya Sen .pdf

8/10/2019 Amartya Sen .pdf

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Chapter 1

T H E C O N C E P T O F D E V E L O P M E N T

A M A R T Y A S E N

Harvard University

ontents

1. The backgroun d 10

2. Produ ction growth and developm ent 12

3. Char acterist ics functionings and living 15

4. Fre edo m and capability 16

5. Weigh ts and rankings 18

6. Values instruments and objects 20

7. Conc lusion 23

References 24

For he lpfu l d i scuss ions and com ments , I am mos t gra tefu l to Hol l i s Chenery , T .N. Sr in ivasan and

Paul S t ree ten .

Han dboo k of Development Economics Volume L Edited by H. Chenery and T.N. Srinivasan

Elsevier Science Publishers B.V. 1988


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10 A Sen

1 Th e background

Th e French grow too fast , wrote Sir William Petty in 1676. Whether or not this

was in fact the first recorded expression of what is clearly a traditional English

obsession, it was certainly a part of one of the earliest discussions of development

economics. Petty was concerned not merely with the growth of numbers and of

incomes, but he also took a broad view of development problems, including

concern with the exact content of the standard of living. Part of his statistical

analysis was meant to show that the King's subjects are not in so bad a

condition as discontented Men would make them . While Petty had estimated

national income by using both the income method and the expenditure

method , he had also gone on to judge the conditions of people in a broad

enough way to include the Common Safety and each Man's particular

Happiness 3

Petty is regarded, with justice, as one of the founders of modern economics,

and specifically a pioneer of quantitative economics. 2 He was certainly also a

founder of development economics. Indeed, in the early contributions to eco-

nomics, development economics can hardly be separated out from the rest of

economics, since so much of economics was, in fact, concerned with problems of

economic development. This applies not only to Petty's writings, but also to those

of the other pioneers of modern economics, including Gregory King, Francois

Quesnay, Antoine Lavoisier, Joseph Louis Lagrange, and even Adam Smith. n

Inquiry into the Nature and Causes of the Wealth of Nations

was, in fact, also an

inquiry into the basic issues of development economics.

The fact that in the early writings in economics there was this noticeable

congruence of development economics and economics in general is a matter of

some interest, especially in the context of investigating the nature of the concept

of development . Interest in development problems has, traditionally, provided

one of the deepest motivations for the pursuit of economics in general, and this

broad basis o f development economics has to be borne in mind when investigat-

: Political A rithmetick in which these passages occur, was written by Petty around 1676 but it was

published posthumously in 1691. The text could be found in Hull (1899, vol. I). The passages referred

to can be found on pages 241-242, 311.

2 It may be remembered that it was Petty, the anatomist and musicologist, t urned economist, who

had insis ted at the Royal Society that in discussions in the society, no word nlight be used but what

marks either number , weight, or measure [Hull (1899, vol. I, p. lxiv)]. Those who complain about the

rec ent craze for mathematical economics might have to put up with the fact that the recent times

began a long time ago.


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Ch 1: The Concept of Development

ing the details of the concept of development. Having started off, tightly, with an

ell, development economics can scarcely settle for an inch.

It is not hard to see why the concept of development is so essential to

economics in general. Economic problems do, of course, involve logistic issues,

and a lot of it is undoubtedly engineering of one kind or another. On the other

hand, the success of all this has to be judged ultimately in terms of what it does

to the lives of human beings. The enhancement of living conditions must clearly

be an essential- if not th essential-object of the entire economic exercise and

that enhancement is an integral part of the concept of development. Even though

the logistic and engineering problems involved in enhancing living conditions in

the poor, developing countries might well be very different from those in the rich,

developed ones, there is much in common in the respective exercises on the two

sides of the divide [on this see Bauer (1971)].

Sometimes development economists have been rather protective of their own

domain, insisting on separating development economics from the rest of eco-

nomics. While the underlying motivation behind this effort is easy to understand,

it is important not to make too much of the divide, nor to confuse separateness

with independence. Tools of standard economics may have much fruitful use in

development economics as well, even when the exact problems addressed happen

to be quite specialized. It is, however, arguable that for one reason or another, a

good deal of standard economics has tended to move away from broad issues of

poverty, misery and well-being, and from the fulfilment of basic needs and

enhancing the quality of life. Development economists have felt it necessary to

emphasize and justify their involvement with these- rather old- fashi oned -

problems, even though the relevance of these problems is by no means confined

to development economics. There are also institutional differences that separate

out the logistic issues in developing countries from those of developed ones, in

the pursuit of economic development and the enhancement of living conditions.

Certainly, the systematic differences in institutional features is a matter of

great moment in arriving at policies and deriving practical lessons regarding what

is to be done. But the first issue - the emphasis on development object ives- is not

a matter only for development economics as such, but of importance for

economics in general [see Hirschman (1970)]. In this respect, too, insisting on a

sharp division between development economics and other types of economics

would be rather counter-productive. Development economics, it can be argued,

has to be concerned not only with protecting its own territory, but also with

keeping alive the foundational motivation of the subject of economics in general.

The literature on the concept of developme nt -whether explicitly put forward

or discussed by implic ation- has to be examined in this broad perspective related

to economics in general, rather than only in terms of development economics

narrowly defined.


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12 A Sen

2. Product ion .growth and development

The close l ink between economic development and economic growth is s imulta-

neously a matter of importance as well as a source of considerable confusion.

There can scarcely be any doubt that, given other things, an expansion of

opulence must make a contr ibut ion to the l iv ing condit ions of the people in

question. It was, therefore, entirely natural that the early writings in development

economics , when i t emerged as a subject on i ts own af ter the Second Wo rld W ar,

concentrated to a great extent on ways of achieving economic growth, and in

part icular increasing the gross nat ional product (GNP) and to ta l employment

[see Rosenstein-Rodan (1943), Mandelbaum (1945), Dobb (1951), Datta (1952),

Singer (19 52), Nurk se (1953), D asg upt a (1954), Lewis (1955), Bara n (1957),

Hirschman (1958)] . The process of economic development cannot abstract f rom

expanding the supply of food, clothing, housing, medical services, educational

facilities, etc. and from transforming the productive structure of the economy,

and these important and crucia l changes are undoubtedly m atters of economic

growth.

The importance of growth must depend on the nature of the variable the

expan sion of which is considered and seen as grow th . The crucial issue,

therefore, is not the time-dimensional focus of growth, but the salience and reach

of GNP and re la ted variables on which usual measures of growth concentra te .

The relation betw een G N P and living cond itions is far from simple. 3 To illustrate

the problem, figures for GNP per head and life expectancy at birth in 1984 are

given in Table 1.1 for five different countries, namely, China, Sri Lanka, Brazil,

Mexico, and South Africa . South Africa , with about seven t imes the GNP per

Table 1.1

GN P and l i fe expec tancy

Life expectancy at

GN P per head, a t b i r th ,

1984 1984

U.S. Dollars) years)

Chin a 310 69

Sri Lank a 360 70

Brazil 1,720 64

Mexico 2,040 66

South Africa 2,340 54

Source:

Wo rld Ban k 1986).

3For discussions on this , see Adelm an and Morris 1973), Sen 1973), Adelm an 1975), Gr ant

1978), Mo rris 1979), Kakw ani 1981), Streeten 1981), Streeten et al. 1981), Stewart 1985), Ana nd

and Harris 1986).


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Ch. 1. The Concept of Development 13

he a d of Chi na a nd Sr i La nka , ha s a subs t a n t i a l l y l owe r e xpe c t a t i on o f l i f e t ha n

the la t t e r count r ies . Simi la r ly , Braz i l and Mexico a l so wi th many t imes the

i nc om e of C hi na a nd Sr i La nka ha ve a c h i e ved c ons i de ra b l y le ss i n l onge v i ty t ha n

these two much poorer count r ies . To point to thi s cont ras t i s not , of course , the

sa me t h i ng a s d ra wi ng a n i mm e di a t e po l ic y c onc lus i on a s t o e xa c tl y wha t shou l d

be done , bu t t he na t u re o f t he c on t ra s t ha s t o be borne i n mi nd i n r e fus i ng t o

i de n t i fy e c onomi c de ve l opme nt wi t h me re e c onomi c g rowt h . Eve n t hough a n

e x p a n s i o n o f G N P ,

given other things,

should enhance the l iving condi t ions of

people , and wi l l typica l ly expa nd the l i fe expec tancy f igures of tha t coun t ry, there

are many other var iables tha t a l so inf luence the l iving condi t ions , and the concept

of de v e l opm e nt c a nnot i gnore t he ro l e o f t he se o t he r va ri a bl e s.

Li fe expec tancy i s , of course , a very l imi ted measure of what has been ca l led

th e qua l i ty of l i fe . Indeed, in t e rms o f what i t d i rec t ly measures , l i fe ex-

pe c t a n c y is more a n i nde x o f the qua n t i t y o f li f e r a t he r t ha n o f i ts qual i ty . But

the forces tha t l ead to morta l i ty , such as morbidi ty , i l l hea l th , hunger , e tc . a l so

tend to make the l iving condi t ions of the people more pa inful , precar ious , and

unful f i l l ing, so th a t l i fe expec tancy may, to som e extent , se rve as a pro xy for

o t he r va r i a b l es o f i mpor t a nc e a s wel l. Fur t he rm ore , i f we sh if t our a t t e n t i on f rom

l i fe e xpe c t a nc y t o t hese o t he r i mpor t a n t va r ia b le s , t he r e la t ionsh i p wi t h G NP pe r

he a d doe s no t be c om e a ny more i mme di a t e . Inde e d , some of t he var i ab l e s r e la t e d

to l iving condi t ions , e .g . the preva lence of c r ime and violence , may somet imes

have even a perverse re la t ionship wi th average mater ia l prosper i ty .

This i s a problem tha t appl ies not only to the poor , deve loping count r ies , but

a l so to the r icher ones . In fac t , var ious s tudies of percept ion of wel fa re done in

weste rn Europe have sugges ted a ra ther l imi ted role of rea l income in se l f -assess-

ment of persona l wel fa re [see van Praag (1978) , Al la rdt (1981) , van Herwaarden

and Kapteyn (1981) , Er ikson, Hansen, Ringen and Uusi ta lo (1986)] . Re l iance of

se l f - a s se s sme nt ba se d on que s t i onna i re i n forma t i on doe s , o f c ourse , ha ve some

problemat ic fea tures a l so, but never the less there i s enough evidence here to

que s t i on t he r a t he r s t r a i gh t fo rwa rd c onne c t i on be t we e n ma t e r i a l p rospe r i t y a nd

wel fa re tha t i s somet imes taken for granted in s tandard economic ana lys i s .

In d ra wi ng a d i s t i nc t i on be t we e n de ve l opme nt a nd g rowt h , a numbe r o f

di f fe rent sources of cont ras t have to be c lear ly di s t inguished f rom each other .

F i r s t o f a l l, i nsofa r a s e c onomi c g rowt h is c onc e rne d on l y wi t h G NP pe r he a d , i t

l eaves out the ques t ion of the

distribution

of t ha t GN P a mong t he popul a t i on . I t

i s, o f c ourse , poss i b le fo r a c oun t ry t o ha ve a n e xpa ns i on o f GN P pe r he a d , whi l e

i t s d i s t r i bu t i on be c ome s more une qua l , poss i b l y e ve n t he poore s t g roups go i ng

down a bso l u t e l y i n t e rms o f t he i r own re a l i nc ome s . Not i ng t h i s t ype o f

poss ibi l i ty does not ques t ion the re levance of income considera t ions as such, but

a rgue s a ga i ns t t a k ing on l y a n a ggre ga t e d v ie w of i nc ome s . Undoub t e d l y , some of

the cases in which achievements in l iving condi t ions fa l l fa r behind what might be

expec ted on the bas i s of average per capi ta GNP (e .g. in South Afr ica , and to a


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14 A. Sen

lesser exten t in Braz i l and Mexico, as re f lec ted in Table 1 .1) re la te c lose ly to th e

d is t r ibu t iona l que s t ion . Inde e d , the c on t ra s t c a n be b rough t ou t e ve n more

sha rp ly by look ing a l so a t the d i s t r ibu t ion o f l if e e xpe c ta nc y (a nd o f mor ta l i ty

a nd mo rb id i t y r a te s ) ove r the popu la t ion (e. g. be twe e n the r a c ia l a nd c las s g roups

in South Afr ica , and c lass and regiona l ca tegor ies in Braz i l and Mexico) .

A se c ond sou rc e o f d i ff e renc e be twe e n g rowth a nd de ve lopm e nt r e late s to the

q u e s t i o n o f externality a nd non marketability. T h e G N P c a p t u r e s o n l y t h o s e

me a ns o f we l l -be ing tha t ha ppe n to be t r a nsa c te d in the ma rke t , a nd th i s l e a ve s

ou t be ne f i t s a nd c os t s tha t do no t ha ve a p r ic e - ta g a t t a c he d to the m. Eve n whe n

non-ma rke te d goods a re inc lude d (e . g . pe a sa n t ou tpu ts c onsume d a t home ) , the

e va lua t ion i s usua lly r e s t r ic te d to those goods whic h ha ve a ma rk e t a nd fo r whic h

ma rk e t p r ic e s c a n be e a si ly t ra c e d . 4 The impor ta n c e o f wha t i s l e ft ou t ha s

be c om e inc re a s ing ly r e cogn iz ed , a s a wa re ne s s o f the c on t r ibu t ion o f the e nv i ron-

me nt a nd na tu ra l r e sourc e s to our we l l -be ing ha s g rown [ se e Da sgup ta a nd He a l

(1979) , Da sgup ta (1982) ]. The a rgume nt c a n be a pp l ie d to the soc ia l e nv i ronme nt

as well as to the phy s ica l one [see Hirs chm an (1958, 1970)] .

Th i rd , e ve n whe n ma rke t s do e x i s t , the va lua t ion o f c ommodi t ie s in the GNP

wil l re f lec t the biases tha t the ma rke t s ma y ha ve . The re a re impor ta n t p rob le ms

in dea l ing w ith d if fe rent re la t ive pr ices in dif fe rent par ts of the world. As has

bee n s how n b y U sher (1968, 1976) and others , t .his can m ake qui te a subs tant ia l

quant i ta t ive dif fe rence . Even for a given economy, the re la t ive importance tha t is

a t t a c he d to one c ommodi ty c ompa re d wi th a no the r ma y be d i s to r te d v i s -a -v i s

wha t migh t be a c h ie ve d unde r pe r fe c t ly c ompe t i t ive c ond i t ions i f the ma rke t

ope ra t ion s ha p pe n to be ins t i tu tiona l ly impe r fe c t , o r if e qu i l ib r ium ou tc ome s

do n ot p reva i l . Ther e is an extens ive welfa re -econo mic l i te ra ture on this , and the

c onne c t ion o f tha t r a nge o f i s sue s wi th the c onc e p t o f de ve lopme n~ i s obv ious

e nough .

Fourth, the rea l income enjoyed by a person in a given year re f lec ts a t bes t the

e x te n t o f we l l -be ing e n joye d by tha t pe r son a t tha t pe r iod o f t ime . Howe ve r , in

assess ing wha t kind of a l ife the person h as succeeded in l iving, we have to tak e a

m o r e

integral

view of tha t person 's l i fe . The issues to be cons idered inc lude

in te rde pe nde nc e s ove r t ime [e . g . in te r -pe r iod c omple me nta r i t i e s e mpha s iz e d by

Hicks (1965) among others] , as well as the more e lementary ques t ion of the

length

of tha t l i fe . I t is easy to cons truc t two scenar ios in which the t ime ser ies of per

capita

GNP a s we l l a s

aggregate

GN P (a nd , o f course, the popu la t ion s iz e)

ha ppe n to be e xa c t ly the s a me in the two c a se s (pe r iod by pe r iod) , bu t in one

soc ie ty people l ive twice as long as those in the other . There a re dif f icul t

e va lua t ive p rob le m s in judg ing wha t the t r a de -o f f ' shou ld be be twe e n la rge r

numbe r , on the one ha nd , a nd longe r l i f e , on the o the r , bu t no ma t te r in whic h

4Even wh en such market prices exist, reflecting the balance of actual demand and supply, the

proper valuation of the non-traded units of tradeable variables may be far from easy. On the problem

of including the value of leisure and leisure time expended at home, in the light of wage rates, see

Nordhaus and Tob in (1972).


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Ch 1: The Concept of Development 15

direct ion one argues , there is an issue here of great impor tance to the assessment

of deve lopment tha t i s comple te ly obscured by the GNP informat ion . Even i f

G N P did everythin g i t i s expected to do (and there are very s t rong reasons for

doubt ing th i s pos s ib i l i ty ) , even then the in format ion prov ided by GNP mus t

remain funda men ta l ly inadequate fo r the concep t o f deve lopment .

Final ly, i t must be noted that GNP is , in fact , a measure of the amount of the

m e a n s of wel l -being that people have, and i t does not tel l us what the people

involve d are succeeding in get ting out of these means , given their ends . To take a

cru de e xamp le, two persons with dif ferent metabol ic rates and con suming the

same amount of food wil l qui te poss ibly achieve rather di f ferent levels of

nour ishment . Insofar as being wel l nour ished is an impor tant end, their actual

achievements wi l l be di f ferent , despi te the congruence of their command over the

m e a n s of achieving nour ishmen t . As i t happens , pov er ty l ines have typical ly

been def in ed in developing countr ies in the l ight of the requ irem ents of some

bas ic commodit ies , in par t icular food, and the inter -personal as wel l as the

intra-personal var iabi l i ty in the relat ionship between food and nour ishment have

been, in this context , a major problem to deal wi th. 5

Ul t imate ly , the as ses sment o f deve lopment ach ieved cannot be a mat t e r on ly o f

quant i f i ca t ion of the

m e ans

of that achievement . The concept of development has

to take note of the actu al ac hievements themselves . The assessment of develop-

ment has to go wel l beyond GNP informat ion ,

e v e n w h e n

the other difficulties

referred to ear l ier (such as dis t r ibut ional var iat ion, presence of external i t ies and

non-marketabi l i t ies , imperfect pr ice mechanisms, etc . ) were somehow overcome.

3. Characteristics functionings and living

Insofar as development is concerned with the achievement of a bet ter l i fe , the

focus of development analys is has to include the nature of the l i fe that people

succeed in l iving. This incorporates , of course, the l e n g t h of the life i tself , and

thus l i fe expec tancy da ta have an immedia te re l evance to the l iv ing s t andard and

through that to the concept of development , But the nature of the l i fe that people

succeed in l iving in each per iod is also a ma t ter of impor tan ce. People value their

abi l i ty to do cer tain things and to achieve cer tain types of beings (such as being

wel l nour ished, being f ree f rom avoidable morbidi ty, being able to move about as

des i red , and so on). These do ings and be ings ma y be gener ica l ly ca l led

func t ion ings o f a per son .

The wel l -being of a person can be seen as an evaluat ion of the funct ionings

ach ieved by tha t per son . This approach has been impl ic i t ly used by Adam Smi th

(1776) a nd Kar l Ma rx (1844) in par t icular , and more recent ly in the l i terature on

SFor arguments on differentsides of th is debate , see Bardhan (1974), Sukhatme(1977), Srinivasan

(1982), Lip ton (1983), Gop alan (1983), Dasgupta and Ray (1986), Kakwani (1986), Osmani (1987).


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16 A Sen

the qual ity of life [see, for example, Morris (1979), Streeten (1981)]. 6 It can be

more explicitly developed, conceptually defended, and empirically applied [on

this see Sen (1980, 1985a)]. The functioning achievements are, of course, causally

related to commodity possession and use, and thus the constituent elements of

the GNP do enter the determination of functioning achievements. Indeed, these

elements are the means of which the functionings are the ends- a point of view

clearly presented by Aristotle in Nicomachean Ethics and Politics.

In recent departures in consumer theory, developed by Gorman (1956, 1976)

and Lancaster (1966, 1971), commodities are viewed in terms of their characteris-

tics. This is clearly a move in the right direction as far as well-being is concerned,

since the functionings achieved by a person relate to the characteristics of the

commodities used. On the other hand, no index of characteristics as such could

possibly serve as an indicator of the achievements of a person, since the

conversion of characteristics into functionings can and does vary from person to

person. Characteristics of commodities are impersonal in a way that functionings

cannot be, since the latter are features of persons whereas the former are features

of commodit ies. The relationships between commodities, characteristics, and

functionings, and the sources of variations in their interconnections, have been

discussed elsewhere [see Sen (1980, 1985a, 1985b)].

The achievement of functionings depends not only on the commodities owned

by the person in question, but also on the availability of public goods, and the

possibility of using private goods freely provided by the state. Such achievements

as being healthy, being well-nourished, being literate, etc. would depend naturally

also on the public provisions of health services, medical facilities, educational

arrangements, and so on. In recognizing this, there is no need yet to enter into

the debate, which is important but need not be pursued here, as to whether

provision by the state is a cost-effective way of enhancing the relevant function-

ings involved. That debate about development strategy will involve logistic and

engineer ing issues, which require careful assessment. What is being pointed out

here is the importance of judging development in terms of funct ionings achieved

and of seeing in that light the availability and use of the means to those

functionings (in the form of possession of conunodities, availability of public

goods, and so on).

4 Fre edo m and capability

One of the functionings that may be thought to be particularly important in

assessing the nature of development is the freedom to choose. Sometimes this

6See also Sen 1973, 198Jb), Ade lman 1975), Scanlon 1975), Gw atkin , Wilcox and Wra y 1980),

Flo ud an d Wachter 1982), Fogel, Engerm an and Trussell 1982), Gop alan 1983), Panikar and

Som an 1984), UN IC EF 1986), Chen 1986), Williams 1987).


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7

concept is used in a ra ther narrow and l imited way, so tha t the actual f r e e dom to

choose is not assessed, but ins tead the focus is on whether there a re

restraints

impo se d by o the r s tha t h inde r the a c tua l f r e e dom. Tha t ne ga t i ve pe r spec t ive,

much pursued in the l iber ta r ian l i te ra ture , does have , of course , phi losophica l

s tanding of i ts own [see Hayek (1960) , Ber l in (1969) , Nozick (1974)] . However ,

wh at is im po rta nt to recognize in the present co ntex t is the fac t tha t the

ne g a t iv e e mpha s i s on the abse nc e o f r e s t r ain t is pa r t o f a mora l a pproa c h tha t

doe s no t jud ge the goodness of a soc ie ty in te rms of the ac tua l qua l i t ies of l i fe

achieved by the me mbe rs o f the soc ie ty , a nd c onc e n t ra te s ins te a d on the

c or re c tne s s o f the

processes

th rough whic h the se a nd o the r a c h ie ve me nts c ome

a bout . I t i s pos sib le to de ba te w he the r the pa r t i c u la r ins i s te nc e on processes tha t

do not involve such res tra int is , in fac t , as convinc ing as i t c lear ly is to some

e xpon e n ts o f th i s po in t o f v iew. But in the p re sen t c on te x t , we ne e d no t e n te r in to

tha t la rge and imp orta nt deba te . I t is suff icient here to note tha t as fa r as the

l iv ing s ta nda rds o f the pe op le a re c onc e rned , the re is no e sc a pe f rom foc us ing on

achievements and processes come into a l l th is mainly as means to and antece-

de n ts o f those a c h ie ve me nts , r a the r tha n be ing

independently

valuable in this

c on te x t .

H o w e v e r , t h e

positive

f reedom to be able to choose is , in fac t , an important

func t ion ing on i t s own r igh t s . Two pe r sons who ha ve ide n t ic a l a c h ie ve me nts o f

other

func t ionin gs m ay no t s t i ll be seen as enjoying the same leve l of well-be ing i f

one o f the two ha s no op t ion to c hoose a ny o the r bund le o f func t ion ings , whe re a s

the second pers on has s ignif icant opt ions . Be ing able to f ree ly choose to lead a

par t icula r l i fe may be a point of a r icher descr ipt ion of the l i fe we lead, inc luding

the choices we a re able to make [on this perspec t ive , see Sen (1985a)] .

A person 's capabi l i ty can be seen as the se t of a l te rna t ive func t ioning n- tuples

a ny one o f whic h the pe r son c a n c hoose . One wa y o f in t roduc ing the impor ta nc e

of f reedom in the de te rmina t ion of well-be ing is to see well-be ing as a func t ion

no t on ly o f the a c tua l func t ion ing a c h ie ve me nt , bu t a l so o f the c a pa b i l i ty s e t

f rom whic h tha t n - tup le o f func t ion ings i s c hose n . In th i s wa y o f fo rma l ly

c ha ra c te r iz ing the p rob le m, the l is t o f funct ion ings ne e d no t inc lude c hoos ing

as such, b ut the va lue of choosing will be re f lec ted in the eva lua t io n by ma king

tha t e va lua t ion de pe nd bo th on the c hose n n - tup le o f func t ion ings , and on the

na ture and the range of the capabi l i ty se t i tse lf .

There a re dif f icul t ana lyt ica l problems involved in the eva lua t ion of a se t , in

the l ight of the f reedom i t offe rs [on this see Koopmans (1964) , Kreps (1979) , Sen

(1985b)] . But insofar as the assessment of the qua l i ty of l i fe and of deve lopment

achievements involves these cons idera t ions , i t is important not to lose s ight of

th i s pe r spe c t ive , e ve n though i t ma y no t be imme dia te ly pos s ib le to ma ke

extens ive use of this approach in ac tua l empir ica l exerc ises .

A d i f f e re n t wa y o f look ing a t th i s p rob le m invo lve s inc orpora t ing the f r e e dom

to c hoose in the na tu re o f the func t ion ings the mse lve s by de f in ing the m in a


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18 A Sen

ref ined way [see Sen (1985a)]. Choosing to do x when one could have chosen

any member of a set S, can be defined as a refined functioning x / S The point

can be brought out by considering the functioning of fast ing . When a person

fasts he is clearly starving, but the nature of that functioning includes the choice

not to so starve. A person who has no option but to starve (because, say, of his

extreme poverty) cannot be said to be fasting. In assessing the achievements of

the persons and of the society, the distinction between fasting and willy-nilly

starving may well be very important. The route of refined functionings , taking

note of substantive exercise of choice, provides one particular way of incorporat-

ing the aspect of freedom in the assessment of functionings.

5 Weig hts and rankings

It should be clear that the perspective of functionings and capabilities specifies a

space

in which evaluation is to take place, rather than proposing one particular

formula for evaluation. The exercise has to begin with an identification of

valuable functionings. In the context of economic development, there might well

be considerable agreement as to what functionings are valuable, even though

there might be disagreement on the

relative

values to be attached to the different

functionings. When an agreed list has been arrived at, the approach of domi-

nance provides a minimal partial order on that space (in terms of greater

achievement in eoery respect).

To go further than this will require more articulate evaluation functions. But

these evaluat ions need not be based on a unique set of indifference curves . The

relative values may be specified as belonging to particular ranges, and corre-

sponding to such specification of ranges, the overall ranking may be a partial

order more extensive than the minimal dominance order but probably well short

of a complete ordering. As the ranges of relative values are narrowed, the partial

ordering will be extended. The mathematical technology involved in such evalua-

tion (based on intersection partial orderings ) has been extensively used in

other contexts [see, for example, Sen (1970), Blackorby (1975), Fine (1975), Basu

(1979)]. The important thing to note here is that the problem of evaluation need

not be seen in an all-or-nothing way. It is possible to extend the partial order by

narrowing the ranges of weights, and how far one can go on the basis of

agreement on evaluation will depend contingently on the nature of the exercise in

question.

Even the specification of the space of functionings and capabilities does,

however, have considerable cutting power. Achievements of real income and

opulence may differ quite substantially from that of functionings and capabilities.

To give just one example, in a comparison of the states in India, Kerala always

figures as one of the poorest, in terms of GNP per head. On the other hand, in


11/18

Ch 1: The Concept of Development 19

terms of many of the more important functionings, including living long, being

educated, etc. Keral a does better than any other Indian state. Given this contrast,

it is interesting to ask whether Kerala should be seen as having

m ore

achievement

or

rather

less

than the other Indian states. This relates to a question of

considerable importance to the formulation of the concept of development. The

argument for placing Kerala at the high end, rather than the low end, turns on

the evaluation of functionings and capabilities as the right approach to develop-

ment.

A crude assessment of functionings and capabilities in terms only of a few

indicators like longevity, literacy, etc. will, of course, be inadequate and have to

be revised and extended, but the exercise can be systematically done if and only

if the concept of development is seen in terms of ends rather than means. As it

happens, use of information regarding

morbidi ty

detracts somewhat from Kerala's

high record, since the extent of illness seems to be rather large in Kerala, in

comparison with some other Indian states, even after taking note of the greater

awar eness of health conditions in a population that is more educated and

better served by public health services [on this see Pankar and Soman (1984),

Kumar (1987)]. The adoption of the perspective of functionings and capabilities

will call for a great deal of empirical as well as theoretical work being done

within that general format.

As was argued earlier, that format is, of course, an old one in economics, even

though the focus on opulence on the one hand and utility on the other has tended

to deflect attention from that fundamental concern. Aside from discussions by

Aristotle, Smith, and Marx, to which reference was made earlier, it should be

mentioned that ad hoc uses of this perspective can be found extensively in the

economic literature. In many planning exercises, the specification of objectives

has included a clear recognition of the importance of certain functionings, e.g. in

the specification of a minimum level of living [see Pant (1962)]. The literature

on development indicators has also brought in some of these functionings, along

with many other types of variables [see, for example, Adelman and Morris (1973),

Adelman (1975), Kakwani (1981), Streeten (1981)].

The literature on bas ic needs also relates to this question, since the specifica-

tion of basic needs of commodities has to be related to the recognition of their

role in the achievement of functionings. Even though the space in which the basic

needs have typically been specified has been that of commodities rather than of

functionings and capabilities, the motivation clearly does relate to attaching

importance to the lat ter [see, for example, Streeten (1981), and Streeten et al.

(1981)].

The literature on basic needs has been growing rapidly in the recent years, but

clear discussions of this question can be found even in Pigou's classic book

Ec onom i c s o f W e l f are (1952). Of course, Pigou related his focus on the command

over a minimal basket of commodities to the utilitarian perspective, whereas in


12/18

20

A Sen

the modem literature quite often the foundational features have not been

specified. It is arguable that these foundational questions are ultimately quite

impor tant for the concept of development, and it is precisely in that context that

the capability approach provides a different strategy of assessment, more clearly

geared to the evaluation of living as such rather than merely of the happiness

generated by that living (as in the utilitarian approach). This is not the occasion

to pursue the philosophical differences further [I have tried to do this elsewhere;

Sen (1985a)], bu t there is no escape from recognizing the importance of this

foundational question underlying the concept of development.

6. Val ues instruments and objects

One of the difficulties in adequately characterizing the concept of development

arises from the essential role of evaluation in that concept. What is or is not

regarded as a case of development depends inescapably on the notion of what

things are valuable to promote, v The dependence of the concept of development

on evaluation becomes a problem to the extent that (1) the valuation functions

accepted by different people differ from each other, and (2) the process of change

involved in development alters the valuations of the people involved. These two

problems may be called respectively value-heterogeneity and value-endogene-

ity .

The problem of value-heterogeneity was already addressed earlier in the

context of valuations of functionings and capabilities. It was pointed out that

even when there are disagreements on the relative values to be attached to

different functionings and capabilities, it is still possible to get uncontroversial

partial orderings, based minimally on dominance , but more extensively on

intersect ions of the class of acceptable valuation functions. It is, of course, a

matter of substantive normative analysis to argue in favor of some valuation

functions against others, and insofar as the ranges of disagreement could be

reduced through this means, the scope and reach of intersect ion partial order-

ings can be correspondingly enhanced.

Much of traditional development economics has proceeded on the basis of

implicitly assuming a fairly large intersection of valuations related to objects of

development. Even though the original discussions of economic development had

tended to concentrate on the GNP and real income as such, the evaluation

underlying that approach was implicitly based on assuming a widespread agree-

ment on the

e n d s

to which real income and opulence are

m e a n s

The shift in the

focus of attention to basic needs, quality of life, and functionings and capabilities

in general, would not change the assumed agreement on the underlying basis of

On this general question, see Marglin and Marglin (1986).


13/18

Ch. : The Concept of Development 21

dev elop me nt analys is . The prob lem of value-heterogenei ty is und oub tedly ser i-

ous , but i t i s by no means absurd to think that the actual extent of agreement is

indeed qui te large. Most of the debates on development pol icy have tended to

concent ra te on the r e l a t ionsh ip be tween po l i cy ins t ruments and agreed ends

(accepted in the analys is of pol icy) .

I t i s , however , poss ible that a more expl ici t character izat ion of wel l -being and

of peo ple s f reedo m to achieve what they would value achieving will increase the

demand for da ta and in format ion in the concep tua l i za t ion of deve lopment . For

example , the s cope for us ing more dem ographic and hea l th -r e la ted in forma t ion is

cer tainly great in assess ing the real achievements of development , and recent

works deal ing with the pas t as wel l as the present have out l ined the necess i ty of

seeking this typ e of informat ion, neglected in t radi t ional dev elopm ent analys is . 8

I t i s poss ible that once these informat ional needs are recognized, there might

again emerge a fai r degree of consensus on what is to be valued and how. On the

other hand, i t i s also poss ible that there might be much disagreement regarding

the respect ive impor tance of di f ferent aspects of wel l -being. Some of these

dif ferences might involve scient i f ic argumentat ion as to the precise role of

dif ferent var iables in human funct ioning, For example, whether an expans ion

of bo dy s ize related to the process of economic develop ment is an ac hievemen t of

importance can be disputed in terms of the al leged presence or absence of

relat ions between body s i~e and performance. The convers ion of nutr ients into

bod y charac te r i st i cs and the role of body character is t ics in achieving valuable

func t ioning s b oth cal l for close scrut iny. 9

Other disputes may turn not on factual relat ions , but on what is to be regarded

as an impor tant par t of a valuable l i fe and how valuable i t i s . I t would be idle to

pre tend that disputes on the relat ive impor ta nce of di f ferent types of funct ionings

can be fully resolved on the basis of scientific argument alone. I t is , therefore,

par t icular ly impor tant to bui ld into the concept of development the poss ibi l i ty of

pers is tent incompleteness in ranking. Seeing the agreed ranking as the intersec-

t ion of the p ar t ly divergent valuat ion funct ions must , of necess i ty , entail this.

The value-end ogenei ty problem raises issues of a somewha t di f ferent kind f rom

those raised by value-heterogenei ty. With value-heterogenei ty the intersect ion

par t ial order ing may have to be s i lent on some compar isons , but insofar as

jud ge me nts are possible, they can be ma de on the bas is of a given valuat ion

funct ion (whether or not complete) . Value-endogenei ty, on the other hand, raises

what is , in some ways , a deeper problem, to wi t , the dependence of the valuat ion

fun ct ion on the thing that i s being valued. The process of developm ent may br ing

about changes in what is regarded as valuable and what weights are at tached to

SSee, in particular, Sen (1973, 1985b), Floud and Wachter (1982), Fogel, Engerman and Trussell

(1982), Gop alan (1983), Pan ikar and Soman (1984), UNICEF (1986), Williams (1987).

For

differentviews on this subject, see, for example, Sukhatme 1977), Srinivasan(1982), Gopalan

(1983), Fog el (1986), Dasgupta and Ray (1986), Kakwani(1986), Osm ani (1987).


14/18

22 A Sen

these objects. There are complex philosophical issues involved in judgi ng chan ged

conditions, when those changes bring about alterations in the values attached to

these conditions. 1

How ever, in this problem too there is a possibility of using an interse ction

technique. A change may be judged to be an im provement i f i t is superior both in

terms of the antecedent values

nd

subsequent values, i .e. prospectively better

than the available alternatives and also retrospectively better than the rejected

alternatives. In this case, there may be at least a pragmatic argument in favor of

regarding this to be a genuine improvement, even though a purist might doubt

whether such judgements can at all be taken as definitive when they are

gener lly

volatile (even though not, as it happens, in a way that affects the judg em ent of

this p rticul r

change). Even this pragmatic justification will not obtain if the

judgements based on antecedent values differ on the particular issue under

discussion from those based on subsequent ones. It is possible for a change to be

regarded as worse in terms of the earlier values, but better in terms of valuations

made af ter the event .

In the more philosophical literature, the case for seeing valuations as having a

certain mea sure o f objectivity has increasingly gained ground co mpare d with the

situation that obta ined some decades ago. n Th e objectiv ist position is, in [act,

in line with very old traditions in ethics and political economy (going back at

least to Aristotle), even though it was extremely unfashionable at the time

development economics emerged as a subject, when the dominant schools of

meth odology were posi t iv ism of var ious types. The object iv is t posi t ion

would tend to support the possibility of resolving the conflicts involved in

intertemporal changes in values by rational assessment.

These foundational issues will not be purused further here. It is sufficient for

the present purpose to note that no matter what v iew is taken of the nature of

valuation, the practical problem s of making judge men t in the situation of

value-heterogeneity and value-endogeneity must be enormous. Even if these

differences could in principle be resolved through rational assessment, the possi-

bility of actually resolving these differences in practice may be severely limited.

Given that fact, the necessity of settling for partial orders in response to

value-endogeneity as well as value-heterogeneity is, to some extent, inescapable.

Explicitly facing these problems of valuation has some advantages which

should be emphasized. First, separating out relatively uncontroversial judgements

from the controversial ones related to value-heterogeneity and value-endogeneity,

helps to clarify what can be asserted with some confidence, and what can be said

only with much greater hesitation. A lot of the debates on policy making in the

tF or an interest ing discussion of this quest ion, see Elster 1979, 1983). Some similar issues are

raised in consumer theory when tastes are taken, as endogenous [see, for example, von Weizsacker

1971), Pollak 1978)]. See also Hir schm an 1970).

llSe e in part icula r, McD owell 1981), Nage l 1980, 1986), Hur ley 1985), Wiggins 1985).


15/18


23

context of economic development relates to valuation problems that are not

unduly problematic. Whether state intervention or reliance on the market may be

better means of enhancing living conditions is, of course, both important and

controversial, but the controversy has typically centered, rightly, on the relation-

ship between means and achievements, rather than on differences in valuation.

By explicitly facing the sources of the difficulties in valuation, it is possible to

give those debates a deeper foundation , without compromising the broad motiva-

tion underlying development economics.

Second, in some parts of the development literature, values have been treated

as if they are simply i n s t r um e n t a l to economic development, rather than the

ultimate basis of judging the nature of development itself. For example, encour-

aging the valuation of profits and that of enterprise has often been seen as good

m e a n s

of development. Certainly, in terms of the dependence of economic growth

on particular motivations these propositions can be helpfully presented and

assessed. On the other hand, it is also important to recognize that values are not

j u s t instruments, but also views about what should or should not be promoted.

This dual role of values-both important and neither sacrificable-was recog-

nized clearly enough by pioneers of modem economics, including Adam Smith

(1776, 1790) and Karl Marx (1844, 1875). The foundational role of values can be

neglected in favor of an instrumental view only by trivializing the basis of the

concept of development.

7 Conclus ion

The concept of development is by no means unproblematic. The different

problems underlying the concept have become clearer over the years on the basis

of conceptual discussions as well as from insights emerging from empirical work.

Insofar as these problems have become clearer, something of substance has in

fact been achieved, and the demise of the brashness which characterized the

initiation of development economics need not be seen entirely as a loss. A clearer

recognition of the difficulties and problems is certainly a step in the direction of

enhancing our ability to tackle them.

Work on valuational problems will undoubtedly continue. Meanwhile, the

agreed valuations in the form of emphasizing the importance of certain basic

achievements in life make it possible for us to pursue practical debates on policy

and action on the basis of an acceptable valuational foundation. Since many of

these debates relate to matters of life and death, well-being and illness, happiness

and misery, freedom and vulnerability, the underlying objectives are perspicuous

enough and command broad agreement. Work on development economics need

not await a complete solu tion of the concept of development.


16/18

24

A. Sen

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