Essays

Economic Theory of Amartya Sen

Category : Essays

The Nobel Prize winning economist Professor Amartya Sen has focused international attention on the significance of fundamental human freedoms and human rights for development theory and practice. In the past, dominant approaches have often characterized development in terms of GDP per capita; food security in terms of food availability; and poverty in terms of income deprivation. Emphasis was placed on economic efficiency and no explicit role was given to fundamental freedom, individual agency and human rights.

In contrast, Amartya Sen's research has highlighted the central idea   that, in the final analysis, market outcomes and government actions should be judged in terms of valuable human ends. His work has contributed to important paradigm shifts in economics and development. His approach is different from those that focus exclusively on income, growth and utility, with an increased emphasis on individual entitlements, capabilities, freedoms and rights. It has increased awareness of the importance of respect for human rights for socio-economic outcomes.  He has challenged the proposition that growth should take priority over Civil and political rights, while highlighting the role of human rights in promoting economic security, and the limitations of development without human rights guarantees.

In the past, human rights issues have typically been analyzed from the perspectives of separate academic disciplines. Philosophers have focused on foundational issues in ethics, and lawyers on questions of international legal obligation. Both disciplinary perspectives have tended 10 inflect the institutional, economic and structural processes that impact on individual freedoms and human rights. Meanwhile, in traditional economics, welfarist frameworks have dominated the landscape, and economists have often failed to incorporate the ideas of freedom and   rights into their theoretical and empirical work. Sen's research agenda challenged this past thinking and provides a basis for moving forward.

Sen has elaborated a far-reaching critique of utility as an   informational base for ethical and social judgment, as well as for the    ability economics to address real world phenomena such as poverty and Famine, and for its explanatory and predictive power. This has challenged the equation of "rational behaviour" with "sell interested Utility maximization”, as a predictor of individual behaviour. The use  Of ‘choice information an indicator of individual preference and value has highlighted the limitations of utility information as a basis for  evaluating and  comparing human interests, and of utility-based  interpretations of economic efficiency as reflected in standard approaches  to the fundamental  Theorems of Welfare Economics.

Sen has elaborated a series of formal proposals for moving the econoink-s agenda forward—beyond welfarism—and for expanding the types of variables and influences that are accommodated in theoretical and empirical economics. His contributions include far-reaching proposals for incorporating individual entitlements, functioning’s, opportunities, capabilities, freedoms and rights into the conceptual foundations and technical apparatus of economics and social choice. His proposals reflect a number of central recurring themes including the importance of pluralist informational frameworks, the need to go beyond the assessment of utility and income, and the importance of approaches giving a central role to freedoms and rights. In Sen's view, welfarist informational bases are too narrow to reflect the intrinsic value of freedom and rights, which should be brought directly into social- economic evaluation.

Sen's economic theory focuses on human capabilities and opportunities, with an explicit role for freedom, agency and rights, the food entitlements of individuals and groups, deprivation in human capabilities such as knowledge, longevity and living standards such as access to water and services. His theory lays more emphasis on self- reporting, self-esteem, participation and empowerment, and the expansion of valuable capabilities and the realization of freedoms and human rights.

The "entitlement approach" -provides a framework for analyzing the relationship between rights, interpersonal obligations and individual entitlement to things. A person's entitlement set is a way of characterizing his or her overall command over things, taking note of all relevant rights and obligations. A person's entitlements are the totality 3f things he can have by virtue of his rights. Sen has hypothesized that most cases of starvation and famines across the world arise not from people being deprived of things to which they are entitled, but from people not being entitled, in the prevailing legal system of institutional rights, to adequate means for survival. His empirical work suggests that in many famines in which millions of people have died, there was no overall decline in food availability, and starvation occurred as a consequence of shifts in entitlements resulting from exercising rights that  his legitimate in legal terms.

His theory establishes that a range of variables other than agricultural Productivity and aggregate food supply can undermine a person’s Entitlement to food, and that there is a possibility of an asymmetry in The incidence of starvation deaths among different population groups, With entitlement failures arising not only because of overall food Shortages, but because people are unable to trade their labour power or Skills. These findings challenge approaches to general equilibrium Analysis that rule out the possibility of starvation death due to inability

To acquire sufficient food through production or exchange. This has resulted in a shift in the focus of international attention away from Statistics   describing per capita calories and food supplies, and towards Statistics describing the differential ability of individuals, groups and Classes to command food in practice.

Sen’s empirical research has highlighted the possibility of divergences between the expansion of economic growth and income on the one hand, and the expansion of valuable human capabilities on the other. His findings establish that economic growth and income can be poor predictors of the capability to live to a mature age, without succumbing  to premature mortality, in different countries (e.g. India, China, Sri  lanka, Costa Rica, Jamaica), and for different population groups (e.g.  Women versus men; black men versus other groups in the US; the population in the Indian state of Kerala in relation to other states). For these reasons. Sen has proposed that equality and inequality may be best assessed in terms of capabilities rather than in terms of GDP, consumption or utility.

In the past, poverty and hunger were often excluded from dominant discourses on fundamental freedoms and human rights. Sen has challenged this approach and advocated new approaches to thinking about fundamental freedoms and human rights. Rejecting the "outcome- independent’’ position (which suggests that socio-economic outcomes are generally irrelevant to ethical evaluation). Sen has called for the development of "consequence-sensitive" approaches to the characterization of freedoms and rights. In Sen's view, the idea that consequences such as life, death, starvation and nourishment are intrinsically matters of moral indifference is implausible and fails to reflect "complex interdependences" that arise in relation to the exercise and valuation of   freedoms and rights in a society.

Sen opines that lack of substantive freedoms sometimes relates directly to economic poverty, which robs people of the freedom to satisfy hunger, to achieve sufficient nutrition, or to obtain remedies for treatabi illnesses, or the opportunity to be adequately clothed or sheltered, o to enjoy clean water or sanitary facilities. In other cases, the unfreedom links closely to the lack of public facilities and social care, such as th absence of organized arrangements for health care or educational facilities, or of effective institutions for the maintenance of local peac and order. In still other cases, the violation of freedom results precisel from a denial of political and civil liberties by authoritarian regimes an from imposed restrictions on the freedom to participate in the social political and economic life of the community. Poverty as well as tyranny poor economic opportunities as well as systematic social deprivation and neglect of public facilities as well as intolerance or over activity o repressive states can all represent major sources of unfreedom.

Sen has also developed a framework for defending the idea o universalism against relativist and culture-based critiques. He has challenged the proposition that the historical origins of the idea of hurnai rights are uniquely rooted in Western traditions of natural law and nature rights, arguing that the broad traditions from which the idea of humal rights has emerged—traditions of universalism, tolerance, freedom  respect for human dignity, concern for the poor, needy and exploited  and of interpersonal obligation and government responsibility—have no emerged exclusively in or from any single cultural tradition, and have deep historical roots in non-Western societies. He has highlighted the ideas of Confucius, Ashoka, Kautilya and Akbar in this context.

Sen has rejected the view that a core of so-called 'Asian values' have played a crucial role in economic successes in East Asia and that these values are in some way opposed to civil and political rights. In addition, he has questioned the empirical basis of the claim that authoritarianism plays a positive role in securing high rates of economic growth. Furthermore, Sen has argued that the selective and anecdotal evidence of the positive impact of authoritarianism on economic growth from East Asia is contradicted by the African evidence. Even when Singapore and South Korea were growing faster than other Asian countries, Botswana—a major defender of democracy—was the fastest growing economy in Africa. He concludes that the limits of growth without guarantees of a full range of civil and political rights were underlined by calls for greater democracy following the crash of the Asian financial markets in 1997.

Finally, Sen has focused international attention on the role of human rights in promoting human development and economic security. He has argued that civil and political rights can reduce the risk of major social and economic disasters by empowering individuals to complain, insuring that these   views are disseminated, keeping government informed and precipitating a policy response. Whether and how a government responds  to needs and  sufferings may well depend on how much pressure is put  on it, and  the exercise of political rights such as voting, criticizing,  protesting,  and so on can make a real difference. Sen's analysis of the ;  phenomenon of excess mortality and artificially lower survival rates of  women in  many parts of the world (the 'Missing Women') demonstrates  that although excess mortality in women of a childbearing age may be  partly that result of maternal mortality, no such explanation is possible  for female disadvantage in survival in infancy and childhood.

Sen has articulated the view that no major famine has occurred in any country with a democratic form of government and a relatively free   Press. He has suggested that this statement applies not only to the affluent Countries of Europe and America, but also to the poor but broadly democratic countries such as India and Botswana. The incidence of  famines  in India until independence in 1947 (for example, the Bengal  famine in 1943 killed between two and three million people) contrasts  with the - post-independence experience following establishment of a  multiparty  democratic system, which provides inter-temporal evidence  of the  positive impact of democracy in reducing the risk of famine.  Furthermore, this evidence contrasts sharply with the experience of famine in China. When the "Great Leap Forward" proved mistaken, policies were not corrected for three years (1958 to 1961)—while 23 to 30 million people died. In Sen's view, no democratic country with opposition parties and a free press would have allowed this to happen.


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