THE MEANING OF DEVELOPMENT: FOR YOUR PROJECT WORK CONTACT US

On the Meaning of Development: An Exploration of the Capability Approach
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N. Shanmugaratnam
Forum for Development Studies | No. 2-2001
On the Meaning of Development:
An Exploration of the Capability
Approach
1. Introduction
Why do we, time and again, return to the question: ‘what is development?’
I think we need to respond to the ‘why’ before we try once
again to address the ‘what’. Put simply, it is the failure of what is
generally regarded as ‘the development process’ to change the
conditions of large numbers of people for the better that compels
us to ponder the meaning of development. Indeed, we are grappling
with a question that relates to value, and hidden in the apparently
straightforward question of ‘what is development?’ is the question
of what development ought to be. Many things going on in the
world in general and the condition of being of millions of people in
the so-called developing countries in particular make us wonder ‘is
this development?’ The term ‘development’ implies improvement
or positive qualitative change. In discussions on social change, it is
often used to mean greater human freedoms and well-being. But in
reality, the development process is uneven and conflict-ridden, with
mixed consequences, and hence is not a harbinger of universal
progress. On the one hand, there is accumulation of wealth and
enhancement of freedoms and well-being, while on the other there
is impoverishment, marginalisation, reinforcement of oppressive
power structures, violations of human rights, the spread of destructive
internal wars – which claim thousands of civilian lives, force
millions out of their homes and produce an abominable gun culture
which brutalises society – and environmental degradation which in
many instances has contributed to dispossession and forced
migration.
Indeed, the persistence of human deprivation is a major cause
of disillusionment with development. This disillusionment is a result
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of failed expectations. In other words, development was assumed
to be a process that was directed or positively influenced by certain
intentions but the outcomes of that process seemed to negate the
assumption to a great degree in many situations.
As Cowen and Shenton (1996: viii) say:
It is the question ‘What is development?’ that makes the existence of
intentions to develop obvious. This is so if only because responses
to the question of development usually present an image of something
created anew, or improved, or renewed, or of the unfolding of potential
which has the capacity to exist but which presently does not do so.
But, does the development process have intentions? If it does, what
are they and who are directing the process towards a realisation of
these intentions? Cowen and Shenton are at pains to distinguish
between intentional and immanent development. The latter refers
to development as an objective process driven by an inner logic or
dynamic. The former implies subjective action through policy to
achieve a desired result. Cowen and Shenton point out that development
studies ought to deal with both without conflating them and
confusing one with the other. They argue that intentional development
‘consists of the means to compensate for the destructive propensities
of immanent change’ (ibid.: 438). They remind us that in
Europe the harsh social consequences of immanent development
compelled individuals and organisations to demand public intervention
to provide social security for the marginalised, and that the
scope of intentional development came to be defined more broadly
as a result. The origins of current views and values of development
in terms of poverty alleviation, social provisioning and enhancement
of human well-being could be traced to this phase of Europe’s modernisation
where the negative social effects of the growth of capital
were being felt by large sections of the people. While ‘development
of capitalism’ implied the workings of an immanent process,
another meaning of development emerged through the demands of
the proletarianised and the pauperised for better conditions in nineteenth-
century Britain and France.1 In post-war Western Europe,
1 Cowen and Shenton (1996) provide an excellent survey of the ideas and
movements of this period. See, also, Polanyi (1957) for a historical and political
economic interpretation of industrialisation in Britain. Indeed, Polanyi’s work
can be read as a treatise on the complex interconnections between immanent
and intentional development in nineteenth- and twentieth-century Western
Europe. He pointed out that laissez-faire, subsidies, protective tariffs and social
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social provisioning to promote human well-being came to be more
explicitly articulated in public policy.
Thus Dudley Seers (1979) was also echoing the subjective concerns
of another era in another part of the world when, appalled by
the deprivation he saw in the third world, he questioned the meaning
of development in his essay ‘The New Meaning of Development’.
The question to ask about development, he wrote, is: what has been
happening to poverty, to unemployment, and to inequality? If all three
of these had become less severe during a given period, then beyond
doubt it had been a period of development, whereas if one or more
of these central problems had been growing worse it would be
strange to call the result ‘development’ even if per-capita income
had doubled. Viewed historically, Seers’s ‘new meaning of development’
amounted to a restatement of an older concern and concept.
Seers’s sentiments came to be shared by various groups, especially
by the critics of post-war mainstream development theory and by
the advocates of development policies and planning premised on
distributive values. The debates on development that went on in the
post-colonial era led to a widespread consensus that development
could be and should be planned and directed to achieve objectives
such as growth and distribution. Development planning and dirigist
policies enjoyed high status for over two decades after the Second
World War in many countries of the ‘third world’. This trend was
challenged in the 1970s by the new wave of economic liberalism
unleashed on these countries by the Bretton Woods institutions.
These countries were advised by the IMF and World Bank that they
had failed to achieve development because of excessive state
planning were enforced by the state at different times in nineteenth-century
Britain (Shanmugaratnam, 1995). He discerned and exposed the processes that
led to market regulation and policies of social security. This comes out most
effectively in his discussion of the ‘double movement’ that governed the dynamics
of modern society. This double movement was personified in the workings
of two organising principles. One was economic liberalism seeking to establish
a self-regulating market and the other was a countermovement aiming at social
protection by checking the adverse human and environmental consequences of
free-market forces. This countermovement was driven by collective actions on
the part of workers demanding their rights, communities concerned about the
environment and women fighting against sexual discrimination. The Western
welfare state was an outcome of this process. However, state interventions were
called for not only to protect society from the destructive consequences of the
immanent forces of the free market but also to safeguard the interests of the
capitalists themselves at various times. ‘Paradoxically enough,’ noted Polanyi
(1957: 132), ‘not human beings and natural resources only but also the organization
of capitalistic production itself had to be sheltered from the devastating
effects of a self-regulating market.’
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intervention and that the way out lay in freeing the economy from
state control and letting free markets play their ‘natural’ role of
generating development. The point the International Financial
Institutions (IFIs) were making was that development defied
planning, and the role of government was to create an environment
that enabled it to happen through the immanent power of the selfregulating
market. More than two decades have passed since the
re-entry of liberal economic policies and we are still grappling with
the basic questions raised by Seers. As we approached the end of
the last century, the UNDP bemoaned the inequalities of the global
order and the dangers of environmental degradation. The Human
Development Report of 1998, while highlighting the achievements
of the past, drew attention to the gaping inequalities in consumption
and the social exclusion of millions of people.
In our times, one author who has consistently and cogently
addressed development in relation to human well-being is Amartya
Sen, whose contribution to the conceptual framework of UNDP’s
annual Report on Human Development is well known. If concerned
scholars like Seers brought human well-being back into debates on
development theory and policy, Sen has reinforced its centrality by
conceptualising it in terms of capability and by suggesting that
development could be seen as a process of capability expansion.
UNDP has played a major role in mainstreaming human development
as a concept and popularising the capability approach. It deserves
credit for providing us with updated indicators such as the Human
Development Index (HDI), Human Poverty Index (HPI) and
Gender-related Development Index (GDI), and other valuable
information including qualitative accounts of human deprivation and
development. The aggregate indicators are helpful in forming an
overview of trends in human development. However, they say
practically nothing about intra-national differences in quality of health
care and education and the substantive political freedoms and
personal security enjoyed by diverse groups and individuals. The
capability approach is helpful in going beyond these aggregates into
the actual states of being of individuals and groups, and grasping
the limits to quantifying the quality of life. This article critically
explores Sen’s concept of development as a process of capability
expansion and its differences with the currently dominant neoliberal
approach. An attempt is made to indicate that a capability approach
can be incorporated into a broader framework to interpret and evaluate
social change and human well-being without fully subscribing
to Sen’s Smithian position.
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2. Development as Capability Expansion, as Emancipation
Sen has advocated in his various writings that development is best
seen as an expansion of people’s capabilities, as a process of
emancipation from necessities that constrain fuller realisation
of human freedoms (Sen, 1984; 1988; 1992; 1993; 1999). This
means that capabilities, not utilities as claimed by welfarists or
primary goods as claimed by Rawls, are the basis for evaluation of
human well-being. Put simply, a person’s capability refers to the
freedom to achieve various lifestyles. Sen (1993: 31) defines capability
in terms of an individual’s functionings:
Functionings represent parts of the state of a person – in particular
the various things he or she manages to do or be in leading a life. The
capability of a person reflects the alternative combinations of functionings
the person can achieve and from which he or she can choose
one collection. The approach is based on a view of living as a combination
of various ‘doings and beings’, with quality of life to be
assessed in terms of the capability to achieve valuable functionings.
Functionings can vary from such elementary matters as being well
nourished, disease-free, safely sheltered and free from illiteracy to
more complex doings or beings such as having self-respect,
preserving human dignity, being free from stress, taking part in
community life and political and social movements and so on.2 A
person’s functionings depend on his or her personal characteristics
(age and physical fitness, for example) and social and economic
circumstances, which in turn are dependent on the nature of the
larger political economic system as well as the power relations and
rules and cultural codes of specific institutions such as family, caste,
community and workplace. ‘The capability to achieve valuable
functionings’ links the instrumental and constitutive roles of freedom
in development. The constitutive role relates to the primary end,
i.e. the substantive freedoms experienced (which may range from
basic capabilities such as being able to avoid deprivations such as
starvation and premature mortality to freedoms that are associated
with being literate, political participation and uncensored speech).
It signifies the intrinsic importance of human freedom as the preeminent
objective of development. The instrumental role relates to
the means of development, i.e. the entitlements that enable the
2 I am paraphrasing what Sen says in various writings (Sen, 1988; 1992; 1993).
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achievement of valuable functionings. Expansion of freedom is both
the primary end and principal means of development, and the informational
base for evaluation of well-being consists of capabilities.
Sen (1999) identifies five instrumental freedoms: political freedoms,
economic facilities, social opportunities, transparency guarantees
and protective security. These complement one another and
contribute to the positive freedom of the individual to make choices
and live more freely. All these instrumental freedoms have to be
taken into consideration when the problem of inequality is addressed.
For instance, equality in political freedoms, with serious inequalities
in economic facilities and social opportunities and without protective
security, would lead to inequalities in well-being and to deprivations
for many. Further, the distributional problem has to be addressed
with reference to the distribution of these means as well as that of
capabilities across all social divisions. Individuals belonging to groups
that are subject to institutionalised discrimination on grounds of class,
race, ethnicity, caste or gender would always be disadvantaged in
the choices they have and the functionings they actually enjoy.
Differences in personal characteristics make human beings so
diverse that equality in particular means, such as income or poverty
alleviation entitlement, between two persons may translate into
inequality in basic capability if one of them suffers from a disability
or has a personal condition that requires more of the same means
to achieve a level of well-being comparable to that of the other.
Hence the need to insist on the importance of capability as the end,
as the freedom actually enjoyed.3 Moreover, the distributional
challenge is not always about equality per se but about real options
to choose and live the functionings one has reason to value.4
3 This theme is addressed in great detail in Sen (1992) where utilitarian and
libertarian conceptions of equality are critically examined. While giving credit
to Rawls for his contribution, Sen argues that by concentrating on the means to
freedom (primary goods) rather than on the extent of freedom achieved, Rawls’s
theory of a just basic structure of the society has stopped short of paying
adequate attention to freedom as such. ‘A person less able or gifted in using
primary goods to secure freedoms (e.g. because of physical, mental disability, or
varying proneness to illness, or biological or conventional constraints related
to gender) is disadvantaged compared with another more favourably placed in
that respect even if both have the same bundle of primary goods. A theory of
justice…must take adequate notice of that difference’ (Sen, 1992: 148).
4 In the real world, equality in one respect may often mean inequality in some
others. ‘Since all equalities,’ notes Cohen (1993: 2159), ‘generate companion
inequalities, we have to decide which ones to combat and which to tolerate.
’Persistence of inequalities that lead to deprivation and capability failure and to
denial of opportunities for capability expansion is clearly a sign of an unfair
social order. The liberal notion of equality of political liberties cannot help overOn
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The relationship between freedom and well-being is not free of
conflict. Sen (1987; 1992) introduces the important distinction
between well-being freedom and agency freedom to show how the
latter may adversely affect the former. As an agent a person may
have reasons to pursue a goal that serves a larger cause and in that
pursuit may sacrifice her own well-being. The larger cause may be
national liberation, elimination of discrimination on grounds of ethnicity,
caste or gender, or humanitarian service to the poor and needy,
for example. The two freedoms, though clearly distinguishable, are
interrelated. Individual well-being is generally the primary focus of
analysis of social inequality and assessment of policy but the agency
aspect remains relevant to a more complete understanding of human
values and motivations.
The paradigmatic significance of the capability approach lies
greatly in the linkages it establishes between freedoms as both means
and ends of development and the emphasis it puts on ethical values
and social justice in building an acceptable society. From a capability
perspective the answer to a question such as ‘are democratic
freedoms conducive to development?’ would be a definitive yes.
Expansion of the economy is not accorded a privileged position at
the expense of political rights or the entitlements of the poor. The
existence of political freedoms can contribute positively to economic
growth and the latter does not make sense without the widest
possible participation of the people, i.e. without a fair distribution of
economic facilities so as to enable people to acquire command over
goods. A more equal distribution of social opportunities (health care,
education and skill development, for example) without gender, ethnic,
caste and urban–rural biases would enable larger sections of society
to achieve upward mobility. Transparency guarantees through trust
and openness (social capital) in social relations would promote a
better social order and facilitate economic and non-economic
transactions. Protective security for the poor in the form of social
safety nets could help avoid vulnerability and deprivation. The
instrumental freedoms are mutually supportive and together they
serve the achievement and enhancement of valuable functionings.
They are part of the means to promote an intentional development
that results in more people achieving valuable functionings.
Sen sees development as freedom from necessity. Indeed, he
uses Marx’s words to underline his point: ‘replacing the domination
come such inequalities without effective reforms or transformation of the
structures that perpetuate them. Such changes are more often than not caused
by sustained political struggles.
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of circumstances and chance over individuals by the domination of
individuals over chance’ (Sen 1984: 497) and invokes on more than
one occasion Marx’s famous image of development as human freedom
which ‘makes it possible for me to do one thing today and
another tomorrow, to hunt in the morning, fish in the afternoon, rear
cattle in the evening, criticise after dinner, just as I have in mind,
without ever becoming hunter, shepherd or critic’ (ibid.: 497; Sen,
1992: 41).5 According to the capability approach, an expansion of
the economy without an expansion of human capabilities is not
development, and we may argue that there is negative development
when policies contribute to capability failures for some sections of
society. The approach shifts the focus of analysis from means to
the relations between means and ends, and to an assessment of the
ends in terms of human well-being. More significantly, since the
concept of capability encompasses human freedoms, the political
and cultural dimensions are internal to the assessment. Consequently,
capability failure includes deprivations that are economic, political,
cultural and psychological. All this has major implications for
evaluation of well-being as its informational base is more inclusive
than that of utilitarianism or libertarianism. Indicators such as life
expectancy at birth and rates of literacy and infant mortality, which
are among the key elements of the informational basis of quantifying
human development, capture some important basic capabilities.
However, the informational base of the capability approach is wider,
given the range of freedoms considered. Further, since not all
functionings can easily or fully be expressed in numbers (as for
example being free from different types of harassment and discrimination),
more comprehensive evaluative judgements may involve
combinations of quantitative and qualitative variables. Another
important shortcoming of the existing indicators of human development
and deprivation is that they do not adequately reflect people’s
own perceptions of well-being. If my concern is about functionings
that a person has reasons to value, then I must know her own
valuation of the living she has. This further reinforces the need to
broaden the informational base.
The approach also implies the existence of strong intentions in
the development process. In other words, it suggests that the process
5 Of course, this imagery was reserved by Marx to depict the emancipated individual
in his classless society of abundance in which the distinction between mental
and manual labour had vanished. The point Sen seems to want to make by
quoting Marx’s words is that human freedom expands with the continuous
expansion of human capability and the individual achieves all-round development.
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needs to be democratically governed to promote expansion and avoid
failure of capabilities. In this regard, political freedoms make sense
as people’s entitlements only where the people are actually able (in
the sense that they are free and well enough informed) to participate
in political decision-making at different levels and to give expression
to their economic and other needs. Such participation is a necessary
condition for policy-makers to comprehend and conceptualise
people’s needs in a heterogeneous society and not to take preferences
as ‘given’.
Sen has been criticised for concentrating mainly on positive
freedom and failing to pay adequate attention to negative freedom
and for not being specific enough beyond basic capabilities about
the other functionings that constitute the ‘good life’ he speaks of
(Qizilbash, 1996; Nussbaum, 1995).6 It has been suggested that
Sen’s concern to accommodate pluralism in people’s views of valuable
functionings or good life has led him to ‘a version of the capability
approach which leaves the nature of the good life largely
undetermined’ (Qizilbash, 1996:144). Sen dealt with negative freedom
in his earlier writings (1970; 1984; 1992) and returned to the
whole question of freedoms in Development as Freedom (1999),
where he reiterates and argues most explicitly about freedoms as
both means and ends (as discussed above) while also relating them
to controversies over cultural values. However, the capability
approach is about positive freedom, about the power to choose valuable
functionings. Negative freedom is about not being interfered
with when a person chooses to do something. This is important,
indeed, but by itself it may not enable a person to avoid capability
failure or to choose and achieve a valuable functioning. Further, as
observed by Nussbaum, ‘some policies of non-interference may
actually extinguish human freedom to choose what is valuable’ (cited
in Crocker, 1995: 183).
I think Sen has chosen to stick to his commitment to pluralism
while elaborating his liberal perspective of freedom as an alternative
to utilitarian and libertarian approaches. One may be justified in
criticising Sen for not going beyond this and projecting a vision of
an alternative social order to capitalism, given his explicit allegiance
to Marx’s idea of human development. However, Sen has chosen
6 Positive freedom may be defined as the capability to achieve various alternative
combinations of functionings. A person is negatively free when she or he is not
being interfered with by others – whether persons, governments or institutions
(Crocker, 1995).
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to show how freedoms can be increased in a capitalist system and
how markets and public action could promote them. He cites Smith
and Marx in support of his vision, while drawing more specifically
on the writings of the former to show that a liberal economic
approach is compatible with public action to provide protective
security to the poor and free or cheaper education to all. Over time,
Sen’s development thinking has gained a strong Smithian character
as admitted by Sen himself in Development as Freedom, in which
his liberal perspective finds its most holistic expression. Marx
regarded the capitalist mode of production (CMP) to be a universally
progressive Promethean force that served to unleash the human
productive potential by freeing individuals from pre-capitalist forms
of bondage, drawing them into capitalist relations of production and
linking them to an international economic order. However, such a
teleological vision of the CMP did not prevent him from showing
moral indignation at the miseries suffered by workers and broader
masses of people as capital expanded, or from forming workers’
political organisations for collective action. Moreover, in Marx’s view,
this development of human productive capacity (human capital, in
current parlance) takes place within a realm of necessity where the
propertyless worker is dependent on selling his labour power to
owners of capital, a relationship that is accompanied by alienation
and fragmentation of the human personality.7 Given Marx’s theoretical
scheme, any intentional development that takes place in the
political economic order of the CMP is subordinated to immanent
development, i.e. to the inherent (internal) dynamic that drives the
expansion of capital through class conflict and competitive profitseeking.
He believed that the development of capitalism would create
the preconditions for the all-round development of the individual but
the realisation of the latter presupposed the end of class conflict
and alienation.
The writings of Sen clearly show that he believes that more
freedom from necessity could be achieved within the existing order
through appropriate policies and reforms that enable the expansion
7 Regarding necessity, Marx recognised the absolute dependence of humans on
nature and believed that ‘the true realm of freedom…can blossom forth only
with this realm of necessity as its basis’. His idea of freedom in relation to
nature is that of ‘associated producers, rationally regulating their interchange
with Nature and bringing it under their common control, instead of being ruled
by the blind forces of nature; and achieving this with the least expenditure of
energy and under conditions most favourable to and worthy of their human
nature. But it nonetheless still remains a realm of necessity’ (Marx, Vol. III,
1959: 820).
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of human capabilities. I think it would be fair to assert that Sen’s
view of capitalism is based neither on an abstract notion of immanent
laws that drive the mode of production nor on the widely-held belief
among ‘normal’ economists that overall economic and social progress
is an ‘unintended’ outcome of the pursuit of self-interest by
rational individuals, i.e. immanent development again. ‘Indeed, to
see capitalism as nothing other than a system based on conglomeration
of greedy behaviour,’ writes Sen, ‘is to underestimate vastly
the ethics of capitalism, which has richly contributed to its redoubtable
achievements’ (1999: 262). He deals with the ethical, institutional
and behavioural aspects of capitalism with reference to his central
idea of ‘reasoned social progress’. He launches an attack on the
interpretations of ‘unintended consequences’ by Menger and Hayek
and makes the point that unintended consequences need not be
unpredictable. His critique of Menger and Hayek was also intended
as another way of understanding Smith’s view of self-interested
behaviour. Sen goes on to defend ‘reasoned attempts to bring about
social changes’ and ‘intentional advancement’ (ibid.: 254–255). The
instrumental role of freedoms in ‘using reason to identify and
promote better and more acceptable societies’ becomes more explicit
in his discussion on social choice and individual behaviour. A key
point that emerges from this discussion is that preference formation
can be socialised to a great extent with broader informational bases,
appropriate ethical values and social norms and public discussion.
In other words, in a freer, better-informed and ethically grounded
society, public policy can be shaped in ways that enable capability
expansion for all. Here we have a vision of development that calls
for a rethinking of the roles of and the relations between the state,
markets and civil society. The position chosen by Sen on this complex
question is one of pragmatism based on historical experience and a
broader perspective of public action to include not only what the
state does for the public but also what the public does for itself
through actions such as demanding remedial measures and accountability
from government.8 With such a broader perspective, Sen
brings collective action by civil society bodies into the realm of public
action. Further, he argues that the lessons of empirical experiences
call for a focus on the complementarity rather than the ideological
confrontation between the state and the market. Thus public action
can also be seen as playing a role of cementing this complementarity.
8 See Sen (1998), ‘The Arturo Tanco Memorial Lecture’, and Dreze and Sen
(1989).
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This pragmatism may be contrasted with the reductionist market
fundamentalism of the neoliberal Washington Consensus that
emerged in the early 1980s. Moreover, the process through which
the Washington Consensus was created had little in common with
Sen’s call for wider participation in policy-making. The ‘Consensus’
was not an outcome of public discussions on the economic, political
and moral issues and priorities of development. According to John
Williamson, who coined the term, the Washington Consensus represented
‘the common core of wisdom embraced by all serious economists’
(Williamson, 1993: 1334). However, in practice, elements of
Sen’s pragmatism may be used by technocrats to give a more
acceptable form to a neoliberal policy. The search for a ‘post-
Washington Consensus’ paradigm (after cracks became apparent
in the ‘wisdom embraced by all serious economists’) has led to a
new interest in ‘equitable, sustainable and democratic development’,
and this tendency may find common ground with the capability concept’s
emphasis on freedom of choice (Gore, 2000). Sen’s Smithian
restatement of individual well-being and freedom can be adapted
by neoliberals to interpret public action to enhance human well-being
in terms of a limited role for the state and a larger role for civil society
in decentralised and ‘participatory’ development without significantly
altering the relations of inequality in the distribution of productive
assets. While Sen may regard land reform as an essential element
of the non-market facilities that enable wider and more gainful participation
of farmers in the market economy, the neoliberals would
prefer land reform to be market-led. Further, many NGOs (including
social movements) in developing countries have been co-opted as
civil society partners of the state and the business sector in local
development with financial aid from the World Bank and other multilateral
and bilateral agencies. Such co-optation, while subserving
the fabrication of a ‘neoliberal populism’,9 has always entailed compromises
and even total abandonment of the values of autonomy
and alternative development that originally inspired some of these
organisations. It would seem that the purpose of such ‘mainstreaming’
of local ‘community-based’ development is to reconstitute the
local in ideological and political–economic terms to enable its
integration into the global order.
However, it appeared that the World Bank was paying special
attention to the views of Sen in the 1990s. This became more evident
when he was invited to give lectures on development as a Presi-
9 The term ‘neoliberal populism’ is from Gore (2000).
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dential Fellow of the Bank in the fall of 1996. Development as Freedom
is based on these lectures. It also appeared that the work on
the World Development Report 2000–2001 (WDR 2000–2001) on
‘Attacking Poverty’ drew inspiration from Sen’s concept of development.
The preparation of the Report involved many commissioned
studies and a large number of consultations with civil society groups
and individuals in different parts of the world. It looked as though
an exercise was underway to formulate a broad strategy with due
consideration for the views of the poor and organisations that
worked with or among them. However, the controversies within the
World Bank over WDR 2000–2001 and the compromises made in
the final Report revealed the ideological hegemony of neoliberalism
and the power wielded by the US Treasury over the affairs of the
Bank (Wade, 2001). The sudden departure in November 1999 of
Stiglitz, who was openly critical of the IMF’s handling of the 1997–
98 East Asian crisis, from the Bank where he was Chief Economist
and Vice-President, and the resignation of Kanbur in May 2000 as
Director of the WDR 2000–2001 team exposed the internal contradictions
in the Bank and the role of the US Treasury.10 Wade (ibid.:
131) points out that the draft Report for which Kanbur was responsible
‘contained much that was anathema to Treasury thinking’ and
that the section on ‘empowering the impoverished’ was highly controversial
and drew strong criticism from some leading economists
within and outside the Bank. Apparently, Kanbur and his team had
stressed empowerment, security and opportunity in that order as
the key ingredients of the strategy to attack poverty and also argued
that effective safety nets should be in place before free-market
reforms were implemented, so that the losers created by the reforms
had something to fall back on. This ordering (or precondition) was
not to the liking of the critics who believed that social safety nets
should be established simultaneously with market reforms (Wade,
2001). In a recent intervention, Kanbur himself has set out the
disagreements and explained them as products of different perspectives
and frameworks with reference to aggregation, time-horizon
and market structure (Kanbur, 2001). He divides those who had disagreements
on these three aspects into two groups: ‘Finance Ministry’
(Group A), which included economic analysts and managers
in finance ministries and IFIs, and mainstream academic economists;
and ‘Civil Society’ (Group B), which included analysts from and
members of advocacy groups and NGOs, and some from UN agen-
10 See Wade (2001) for details of the intriguing politics behind these resignations.
276 N. Shanmugaratnam
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cies and aid ministries in the North and social-sector ministries in
the South. It emerges from Kanbur’s discussion that the dominant
view on poverty reduction within the World Bank was that of Group
A, which had a strong allegiance to the conventional economic
approach to growth and distribution, and that there was a need for
institutions such as the Bank to become more receptive to alternative
views on economic policy and to shift the intellectual frontier
beyond conventional analysis. According to Wade, these economists
(Kanbur’s Group A) were of the view that ‘the Bank should not be
in the business of empowerment’ and the WDR 2000–2001 should
not ‘pander to noisy and nosy NGOs’ (ibid.: 132). While belittling
the possible role of civil society, this group is also paradigmatically
committed to a minimal role for the state in human development. I
think this amounts to a double attack on the broad and pragmatic
idea of public action that Sen has been putting forward.
‘When the institution whose self-stated mission it is to eradicate
poverty,’ concludes Kanbur, ‘can only hold its Annual Meetings
under siege from those who believe its mission is to further the cause
of the rich and the powerful, there is clearly a gap to be bridged’
(Kanbur, 2001: 1093). How bridgeable is the gap? This is a question
worth debating. Be that as it may, it would seem that Sen’s intellectual
intervention through lectures and consultations did open up some
space in the World Bank for reflection on development policy beyond
the Washington Consensus but did not succeed in opening up the
minds of key officials to his holistic and liberal idea of development
as freedom. More importantly, no serious analyst can ignore the
hegemony to which the Bank is subject. Wade, a former employee
of the Bank, puts it well: ‘The Bank has been an especially useful
instrument for projecting American influence in developing countries,
and one over which the US maintains discreet but firm institutional
control’ (Wade, 2001: 127). Thus the controversy over ‘Attacking
Poverty’ was more than an episode about disagreements between
groups holding different views. It was yet another instance of the
US’s power over important multilateral agencies such as the World
Bank. It adds to the existing evidence that contradicts the World
Bank’s claim to autonomy.11
11 See Wade (1996) for another study that documents ‘the determining importance
of American values and interests in the functioning of the Bank’ and ‘how the
Bank forms part of the external infrastructural power of the US state, even
though it by no means bows to every demand of the US governments (pp. 35–
36).
On the Meaning of Development: An Exploration of the Capability Approach
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277
The case of the World Bank has been highlighted because of
Sen’s association with it at policy-level discussions. Irrespective of
Sen’s own views of this IFI, we have learnt that it is not in a position
to be a bearer and practitioner of his message of ‘intentional
advancement’ of human capabilities. Indeed, in the current global
context all IFIs are practitioners of top-down policies that enable
maximum possible freedom for capital at the expense of labour and
the environment. For nearly two decades, they have been busy
imposing reforms on national states in the South to create an environment
that is friendly to the free market. A widespread tendency today
is the informalisation (which in effect is atomisation) and feminisation
of labour, which has given a free hand to capital to violate
minimum-wage regulations and practise discrimination against
women workers. A question that may be posed from a capability
perspective is how friendly these market reforms are to the human
freedoms that Sen advocates.
3. Market and Human Freedom
On the role of markets in promoting freedom, Sen’s concern seems
to be to reclaim the forgotten heritage of the market mechanism as
a means of freeing people from the pre-capitalist bondage that condemned
them to a subhuman life of unfreedom as, for example, in
the case of bonded labour in India. ‘One of the biggest changes in
the process of development,’ Sen writes, ‘involves the replacement
of bonded labor and forced work, which characterize parts of many
traditional agricultures, with a system of free labor contract and
unrestrained physical movement’ (Sen, 1999: 28). Neoclassical
economists are so preoccupied with the utility and efficiency argument
in favour of free markets that they fail to remember that the
classical liberal principles espoused by Smith and Ricardo were not
economic principles in the first place but ‘an application to economics
of principles that were thought to apply to a much wider field’ (Hicks,
1981, cited in Sen, 1999: 28). Sen also draws support from Marx’s
favourable views on the anti-feudal role of capitalism and its liberative
potential. However, the market is a part of the means of development
and whether it should be free, regulated or avoided has to be seen
with reference to how best it can serve along with other means the
goal of promoting human capabilities. Freedom of exchange is a
basic freedom indeed, but so is the freedom from the harsh
consequences of market uncertainties.
Freedom from coercion in the workplace is achievable in a
278 N. Shanmugaratnam
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market economy but it is not necessarily an automatic outcome of
production becoming market-oriented or bondage being legally abolished.
In many parts of the developing world, proletarianisation in
the Marxist sense of achieving freedom from extra-economic coercion
is long drawn-out and often blocked. Historically, capitalism
had a long association with repressive forms of labour relations and
the experiences of the industrialised countries have clearly shown
that organised collective action by workers played a major role in
achieving more democratic employment conditions, social security
and political freedoms. That is, the struggles of the workers were
not only for freedom from coercive controls but also for social
security and other rights. Market does not seem to have any innate
power to transform entrenched repressive structures of economic
relations. On the other hand, it may well serve to adapt older structures
to new needs of capital accumulation without altering the
repressive elements in them. In fact, the repressive elements provide
the means to over-exploit labour. Studies on bonded labour (debt
slavery) in different parts of India have shown how this oppressive
form of production relations is being used to raise profit and accumulate
capital (Kapadia, 1995; Lerche, 1995; Patnaik and Dingwaney,
eds, 1985).
Bonded labour was legally abolished in India in 1973 but it continues
to be used in various market-oriented productive activities
from farming to brick production and gem-cutting. In a study of bonded
labour in the gem-cutting industry in Tamil Nadu, Kapadia argued
that this form of labour was not ‘pre-capitalist’ but a part of a
dynamic capitalist small-scale industry that was rapidly expanding
into global markets. The workers in this industry were debt slaves.
The workshop owners gave loans to them in order to control and to
cheapen labour. Debt bondage is a system in which the workers
worked to pay back their loans to the workshop owner rather than
to earn a wage (Kapadia, 1995). Market integration and the law
against bonded labour notwithstanding, the production relations
remained unfree. Of course, the legal abolition of bondage was a
positive step but more action seems to be needed to eliminate debt
slavery as a practice. There are no convincing signs that the ongoing
neoliberal market reforms would liberate those who are trapped in
debt bondage or in other forms of unfree labour relations. In fact,
the gem-cutting workshop owners did have the option of using free
wage labour but they chose the cheaper, more profitable alternative
of bonded labour. This and other situations of capital–labour relations
(see below) suggest that macro-level market reforms do not necesOn
the Meaning of Development: An Exploration of the Capability Approach
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279
sarily promote freer labour relations at the production level. Something
more is needed and that something has to be more than mere
legal reform.
Numerous other contemporary examples of repressive production
relations can be cited from the ‘liberalising economies’ of the
developing world. The sweatshops in ‘free-trade zones (FTZs) (and
export-processing zones)’ producing textiles and other items for
export in various parts of the South are living examples of capital–
labour relations in which millions of people, mostly women, are
employed under repressive conditions.12 The workers are denied
the right to be unionised and are subjected to methods of supervision
and control that are illegal in the industrial countries and outside the
FTZs in many developing countries. The denial of trade union rights
reduces the workers’ legal bargaining power to zero. The employers
invoke the ‘free market’ argument to justify the wages they offer.
Defenders of current neoliberal economic policies may argue that
these women were not coerced to accept the terms of employment
and that outside this choice they would be unemployed and poorer.
Such reasoning, which can endlessly be extended to justify any form
of unfree labour including slavery, is not compatible with the capability
approach. For the critical point here is that these workers
did not, in practice, have the freedom to choose a freer wage labour
contract.
I remember hearing a leading defender of the neoliberal economic
paradigm say on TV that the women employed in FTZs became
empowered because they had their own income. It does not take
much imagination to see that this view is a vulgarisation of the very
idea of empowerment. True, the women have a source of income,
but the more glaring truth is that they have been inserted into a
repressive form of labour relations that denies them any right to
demand a fairer contract. It can be argued that outside their wage
relationship they are free persons. Aren’t they more fortunate than
their unemployed sisters and brothers? From a capability perspective,
this type of argument amounts to justifying forms of unfree employment
relations. It actually is a defence of the ‘growth and accumulation
first’ thesis which denies any space for expanding human
freedoms through democratisation of capital–labour relations. Moreover,
countries where such repressive labour relations exist have a
poor record of human rights in general. Now the question arises
again whether the market is the realm where initiatives for such
12 Around 27 million people are employed in these zones (Klein, 2000).
280 N. Shanmugaratnam
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democratisation are taken in a developing capitalist society. Experience
shows that, without collective political action by affected
workers and their support groups, repressive labour relations may
go on indefinitely. More often than not protests in FTZs are suppressed
by the state on behalf of the employers.
Experiences of the European social democratic systems show
that expansion of human capabilities was invariably accompanied
by restrictions on the market realm by direct state intervention
(Polanyi, 1957; Hirsch, 1977; Wolfe, 1989). Capability expansion in
these societies was largely a direct and indirect outcome of political
campaigns and struggles, which led to state interventions to regulate
the market economy, institutionalise democratic rights and to ensure
social security by extending public entitlements. In other words, the
mobilisation and action of people as a collective agency contributed
in a major way to enhancement of human well-being. In the decades
after the Second World War, individual freedoms flourished more
in non-economic fields such as politics, art, literature and other intellectual
activities and in sexual standards than in the economy in
Western Europe. Sen has not paid much attention to the historical
and contemporary importance of political struggles for social security
and other rights, although he advocates public action to provide
protective security and social opportunities and is uncompromising
on democratic freedoms. His discussions on the importance of
political freedoms leave the role of struggles implicit. But his concept
of capability should compel one to recognise more explicitly the role
of political actions aimed at expanding rights and security.
Indeed, most of the instrumental freedoms advocated by Sen do
not exist in many countries and they have to be fought for by the
people. Sen does not delve into how these instrumental freedoms
can be achieved where they do not exist. His lectures and advice
to policy-makers were no doubt motivated by noble intentions.
However, the freedoms he advocates as means and the human
emancipation he envisions as end have to be rooted in the social
and political processes in which people play their role as agents of
change to institutionalise the means to expand their capabilities.
Sen’s silence on this important dimension has been characterised
as ‘intriguing’ by Patnaik who, while paying a glowing tribute to Sen
for his original contributions to economics as a social science, notes
that in his writings the ‘chain of causation underlying the phenomena
he is talking about stops often at the immediately preceding link’
(Patnaik, 1998: 2859). The reason for this, Patnaik thinks, is epistemological
since Sen works in the realm of moral philosophy, to which
On the Meaning of Development: An Exploration of the Capability Approach
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281
social processes are external. Patnaik also speculates that Sen’s
silence may be a tactical move ‘designed to garner support for the
programme he is advocating’ (ibid.: 2859). Be that as it may, I think
that the capability approach can be linked to social and political processes
with the aid of a political economic framework and independent
of Sen’s own views about the virtues of free markets. I
shall return to this shortly.
4. Environment
Until recently, another significant omission from the writings on
development by Sen and his co-workers has been the environment.13
However, other researchers have modified and extended Sen’s concept
of entitlement to include command over environmental goods
and services (Leach et al., 1999; Ruitenbeek, 1996). In Development
as Freedom, Sen also refers to environmental issues and the
usefulness of environmental values. More recently, Anand and Sen
(2000) have made an attempt to apply the capability approach to
sustainability. They critically adopt Solow’s capital-theoretic
approach, which regards sustainability as a moral obligation of the
present generation to future generations and argues that preserving
the current economic opportunities for the future is the appropriate
way to meet that obligation. According to this approach, the present
generation ought to maintain a constant aggregate stock of capital
(physical, human and natural) to be bequeathed to future generations.
Since substitutability is assumed, the constancy of the aggregate
stock of capital can be maintained as long as any loss of
exhaustible natural resources is compensated by expanding the
stock of reproducible forms of capital such as human-made capital
(physical assets), human capital or renewable natural capital. This
substitution principle applies to renewable resources as well, i.e. a
particular type of renewable resource may be depleted to the point
of extinction as long as the aggregate stock of capital is maintained
constant.
Solow’s concept of sustainability has been labelled ‘very weak
sustainability’ by critics who have drawn attention to complemen-
13 Sen came under severe criticism from Anil Agarwal, who attacked him for being
‘insensitive’ to the ecological dimension of poverty and well-being. Choosing
to launch his attack in the wake of Sen being awarded the Nobel Prize in 1998,
Agarwal wrote that Sen became famous by exploring ‘economic poverty’ but,
like other ‘poverty economists’, failed to understand ‘ecological poverty’
(Agarwal, 1998). Sen devotes a page to ‘Environment, Regulations and Values’
and touches upon the subject in several places in Development as Freedom.
282 N. Shanmugaratnam
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tarity of resources and the non-substitutability of essential ecological
processes and of the environmental services provided by nature
(Turner, 1993). The environment, therefore, is not simply another
form of capital that lends itself to perfect substitution by humanmade
capital or human capital. ‘Solow sustainability’ ignores
thermodynamics and ecological theory.14 Anand and Sen (2000)
seem to have chosen to ignore the political and ecological views of
the critics and the improvements and alternatives put forward by
other advocates of sustainability. However, they go further than
Solow and focus on the importance of linking intergenerational justice
to the intragenerational and sustainability to human development.
This is to be expected given the value premise of the capability
approach. They argue that human development should be seen as
a major contribution to the achievement of sustainability. The human
development approach is offered as a superior alternative to the
World Bank’s approach of environmental protection through poverty
alleviation. Human development ‘directly enhances the capability
of people to lead worthwhile lives, so there are immediate gains in
what is ultimately important, while safeguarding similar opportunities
in the future’ (ibid.: 2038). They go on to assert that ‘any instrumental
justification for human development is not gripped by some impersonal
objective such as conserving the environment but relates concretely
to people’s ability to generate for themselves the real opportunities
of good living’ (ibid.: 2038–39).
Deep ecologists would dismiss the views of Anand and Sen as
too shallow even by anthropocentric standards. Other environmentalists
are likely to criticise them for ignoring ecological considerations
and for their inability to go beyond a narrow economistic view of
the environment. Anand and Sen are uncritical of the environmental
damages caused by industrialisation, rich countries, rich consumers,
and policies and practices that encourage resource extraction
without concern for the environmental consequences. I think the
capability approach should be and can be extended further to include
environmental values. Human development should include not only
the enhancement of environmental entitlements but also the internalisation
of environmental values for people ‘to generate for themselves
the real opportunities of good living’. Since interchange with nature
is a necessity from which humans cannot ever be free, capability
expansion towards greater human freedom can take place ‘only with
14 Space does not permit a detailed discussion of sustainability here. For a concise
and critical review, see Turner (1993), Chapter 1.
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283
this realm of necessity as its basis’, to borrow a phrase from Marx.15
The significance of environmental quality as a public good and a
universal condition for human well-being derives from this absolute
dependence of life on nature.
5. Notes Toward a Political Economic Framework
The foregoing critical exploration of the capability approach shows
that it can be adopted and adapted as a conceptual tool to interpret
social change and to critique development policies. It is also evident
that the approach should deal more explicitly with relations of power,
conflicts and struggles at different levels from the local to the global.
The concept of capability can be used to map, interpret and evaluate
social change if it can be incorporated into a broad political economic
framework that captures the dynamic institutional environments
that determine or condition the endowment and entitlement16 statuses
of individuals and thereby the functionings they actually
achieve. It is beyond the scope of the present article to develop
such a comprehensive framework. An attempt is made, however,
to identify some of the main elements of it. The reader is referred
to Figure 1 in the Appendix for a diagrammatic presentation of a
framework.
! Global–national interaction and the internal peculiarities of the
national political economy: The national is reciprocally linked to
the global and reproduced through this interaction. However,
the national embodies historically evolved power structures and
political economic and cultural characteristics that distinguish
its location in the global. The openness or otherwise of the political
system and of development policies and practices is a primary
15 Marx, Capital, Vol. III (1959: 820). Also see footnote 6 above, and Capital,
Vol. I (the chapter on labour process).
16 Entitlements in a broader sense than originally defined by Sen (1981) in rather
narrow legalistic terms of command over commodities. In formal terms, the
entitlement set of a person consists of all the possible combinations of goods
(commodities and non-commodities) that a person can acquire in legitimate
ways by using the resources of the endowment set (which consists of tangible
assets, labour power including knowledge and skills, and accessible social capital)
and, wherever applicable, the public assistance received, and the civil rights
guaranteed by the state. Sen’s concept of entitlement has been criticised for its
narrow legalistic premise by Gore, who argues for a broader view of the rules of
entitlement by incorporating non-governmental sites of rule-making and ruleenforcing.
This broadening of the scope of the concept internalises the interplay
between state-enforced legal rules and socially enforced moral rules and shows
how it constrains and enables command over commodities (Gore, 1993).
284 N. Shanmugaratnam
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focus in order to identify and assess the instrumental freedoms
that exist. In this regard, the openness and performance of the
economy has to be seen in conjunction with the positive and
negative social and environmental consequences of the freedom
granted to capital by economic reforms. This is also connected
to regulations concerning minimum wages, occupational safety,
non-discrimination, and environmental quality. Another critical
question is that of the causes and consequences of internal wars,
where they exist. Here, there is a need in many situations to
understand how distributional conflicts often acquire ethnic, religious
and regional characteristics, and real and imagined discrimination
based on these divisions, and finally turn into armed
conflicts, which through their cumulative destructive effects
cause deprivations and capability failures for many
(Shanmugaratnam, 2001).
! Institutional environments at meso and local levels: These levels
need to be carefully mapped with reference to power structures,
ethnicity, instrumental freedoms, state-markets–civil society
relations, and bio-physical resources, in order to capture the
social and environmental heterogeneities, distributional conflicts
and political struggles on different sites within the national political
economy. Such mapping would also capture the specifics of
civil society as an arena of conflicting interests. A detailed mapping
of the local context with reference to the availability, quality
and distribution of productive assets, educational and health
facilities, employment opportunities, gender relations, social capital,
peace and personal security is necessary to obtain a broad
informational base to interpret and evaluate social change and
social well-being.
! Broadened informational base to evaluate individual well-being:
As already noted, the development indicators we have at present
do not capture several aspects of quality of life. More information
is needed on the quality of the health care, education and environment
and on the freedoms actually enjoyed by individuals to
express their views, move around without fear of harassment
and to choose and practice the lifestyles they have reasons to
value. The information should also include a person’s self-evaluation
of well-being. Such broadening of the informational base
demands more resources including professional skills. These
constraints are serious indeed, especially in the South. However
that is the direction in which an enquiry into human well-being
should move in the future.
On the Meaning of Development: An Exploration of the Capability Approach
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285
6. Concluding Remarks
Human well-being remains a recurrent theme in debates on the
meaning of development and the purpose of development policy.
Sen has reinforced the importance of human well-being by conceptualising
it in terms of capability and by suggesting that development
may best be seen as a process of expansion of capabilities.
This article has explored critically Sen’s capability approach, paying
special attention to the paradigmatic significance that lies in the
links it establishes between freedoms as the means and end of
development. This idea of development implies that the process
needs to be appropriately governed to promote expansion and avoid
failure of capability. The article has highlighted the limitations of
the currently dominant neoliberal paradigm in enabling capability
expansion. At the policy level, a strong ideological commitment to
the market mechanism may lead to weakening or denial of democratic
rights to workers: for instance, the right to form trade unions
or to take collective action to defend their interests and to achieve
valuable functionings. It may also restrict the role of public action
in promoting capability expansion. Further, there is no reason to
assume that the neoliberal approach by itself could create adequate
spaces in civil society for the poor and disadvantaged groups to
achieve the freedoms they desire. It may reinforce existing inequalities
and contribute to new inequalities in access to resources and
power. It tends to promote disparities in the quality of entitlements
such as health care and education. In arguing for a capability
approach, Sen has generally targeted national and international
policy-makers and donors and paid less attention to the importance
of people’s political struggles for social security and freedom. The
concept of capability has value as a tool in mapping and interpreting
social change if it can be incorporated into a broader political economic
framework and if the informational base can be expanded to
include more aspects of people’s livings and perceptions of their
own well-being. Towards this, the present study has identified some
key elements.
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Appendix
Global Political Economy
Macro Political Economy
Political system: state, power structures & political
freedoms; economy & distribution of resources;
economic & social policies (instrumental freedoms)
Meso and local contexts: power structures (class, gender, ethnicity,
caste – property rights) state-market-community
!
!
!
Endowments
! Material means of
production
! Labour power: knowledge
& employable skills
! Accessible social
capital:formal & informal
associations; networks
Political, legal &
security environment
Infrastructure
Markets
Information
Intrahousehold
rules /norms
Environmental values
for our project works contact
elite menon:
Facebook: Eimiuhi Ehijie Elect
twitter: @eimiuhiehijie
email: eimiuhiehijie@gmail.com
or Call +2349021728865