Amartya Sen
Citation: For his contributions to welfare economics.
The key idea
Capability approach: development is the expansion of human capabilities, not just income. Famines arise from entitlement failures (loss of command over food), not from food shortage. Social choice theory: Arrow's Impossibility is more nuanced than first appears.
The explanation
Sen's Poverty and Famines (1981) showed that the 1943 Bengal famine occurred during a year of normal rice production — the failure was distributional. His capability approach (Development as Freedom, 1999) redefined development around the freedoms people have to live the life they value. With Mahbub ul-Haq he co-designed the Human Development Index.
Why Africa should care
Sen's capability approach is the framework explicitly used by the UNDP's Human Development Index. African development discourse — Kenya's BETA Plan, AU Agenda 2063, the AfDB's High 5s — increasingly speaks the capability language rather than the pure-income language. His famine-as-entitlement-failure analysis remains directly relevant to food crises in the Horn of Africa, Sahel, and Madagascar.
How to use it
When evaluating a policy, ask: which capabilities does it expand or contract? Cash transfers, mobile money, education, healthcare can all be evaluated through the capability lens, often producing different rankings than pure income-based analysis.
Canonical works
- Amartya Sen (1981) "Poverty and Famines: An Essay on Entitlement and Deprivation" Oxford University Press
- Amartya Sen (1999) "Development as Freedom" Knopf
- Amartya Sen (1985) "Commodities and Capabilities" North-Holland
More from Information, finance, and development · 1990-1999
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Markowitz: portfolios are mean-variance objects, and diversification is the free lunch. Sharpe: the CAPM — expected return equals risk-free plus beta times market risk premium. Miller (with Modigliani): capital structure irrelevance in frictionless markets.
- 1991Ronald Coase
Transaction costs are everything. The Coase Theorem: with well-defined property rights and zero transaction costs, externalities are resolved by private bargaining regardless of initial allocation. The Nature of the Firm: firms exist because internal coordination has lower transaction costs than market exchange.
- 1992Gary Becker
Apply economics to everything: human capital (education and health as investment), family decisions (marriage, fertility, divorce), crime (cost-benefit calculation), discrimination (taste-based vs statistical).
- 1993Robert Fogel and Douglass North
Quantitative economic history. North: institutions — formal rules, informal norms, enforcement — determine long-run economic performance. Fogel: railroad cliometrics; the US economy without railroads would have been only 3% smaller in 1890.
- 1994John Harsanyi, John Nash, and Reinhard Selten
Nash equilibrium: in strategic interactions, each player chooses a best response to the others. Harsanyi extended this to incomplete information. Selten refined to subgame-perfect equilibrium.