Empowering Lives, not Just Wallets: Embracing Capability Approach in Poverty Analysis


Development can be viewed as a process of expanding the actual freedoms that individuals experience. Achieving development entails addressing significant sources of limited freedom, such as poverty, tyranny, inadequate economic opportunities, social deprivation, neglect of public resources, and oppressive states. In the pursuit of constructing a framework that aligns with this objective, valuable insights can be drawn from the theories put forth by Amartya Sen, specifically his poverty as capability deprivation approach. Sen’s ideas regarding capability deprivation offer valuable guidance in developing a framework that can enable to actively participate in meaningful and effective discussions pertaining to the conceptualization, measurement, and alleviation of poverty.

While development, poverty, and inequality are distinct concepts, they are interconnected and central to Amartya Sen’s Capability Approach and the UNDP human development approach, as they all influence people’s well-being. Traditionally, development has been closely associated with economic growth, but Sen’s Capability Approach introduced a new perspective that challenges this notion and brings about a paradigm shift in our understanding of development. From this standpoint, poverty should be understood as the lack of fundamental capabilities rather than solely as a low level of income, which is typically used as the standard measure for identifying poverty. The capability-based view of poverty does not negate the valid perspective that low income is a significant cause of poverty, as a lack of income can indeed be a primary factor leading to the deprivation of one’s capabilities.

Sen’s Capability Approach also had a significant impact on the concept of poverty. According to Sen, poverty is a complex and multidimensional phenomenon that must consider the diverse characteristics and circumstances of individuals. The impoverished population not only lacks income but also lacks access to education, healthcare, justice, credit, productive resources, and opportunities. As a result, poverty should be understood as a deprivation of capabilities, which in turn limits the freedom to achieve one’s goals, rather than simply a low level of income. Sen argues that the evaluation of poverty should be based on the extent to which individuals have the freedom to pursue the objectives they value. In this framework, poverty is viewed as a “capability failure,” where individuals lack the capabilities necessary to enjoy essential aspects of human life, referred to as “beings and doings.”

The Monetary Approach to Poverty

 The Monetary Approach views poverty as a deficiency in consumption or income, determined by a predefined poverty line. The monetary approach appears to be rigorous, straightforward, and quantifiable, as it focuses on tangible factors like income and expenditure, which are seemingly more objective and universally applicable than subjective measures like health and education, which can vary from person to person. However, the limitations of the monetary approach become evident when considering the complex and multifaceted nature of poverty. It tends to overlook or disregard other influential factors that shape and perpetuate poverty, such as lived experiences and non-monetary aspects related to social and political conditions. Several non-monetary indicators, such as education (enrollment and literacy rates), health and nutrition (malnutrition, mortality, morbidity, life expectancy, and infection rates), and environmental factors (access to safe water sources, sanitation, and household infrastructure), also play a significant role in understanding poverty situations.

The Social Exclusion Approach to Poverty

Social Exclusion refers to the marginalized status and exclusion from key social structures, entitlements, and opportunities within a community, often resulting from poverty or being perceived as insignificant. A social exclusion perspective on poverty illuminates the various forms of marginalization and deprivation and enables an analysis of the underlying dynamics and processes that generate and perpetuate deprivation. It highlights the denial of citizenship rights and is closely linked to the presence of discriminatory forces like racism, as well as market failures and inadequate protection of rights. By adopting a social exclusion lens, it becomes possible to examine the structural characteristics of a society, including the conditions faced by marginalized groups such as the disabled, landless individuals, indigenous populations, and ethnic minorities. Consequently, the distribution of opportunities and outcomes becomes vital, as it recognizes that impoverished and deprived individuals may not have the means to improve their circumstances on their own.

Sen’s Capability Approach

The Capability Approach is characterized by its emphasis on the ethical importance of individuals’ ability to lead lives that they have reason to value. This sets it apart from other established ethical frameworks like utilitarianism or resource-ism, which primarily focus on subjective well-being or the availability of resources for a good life, respectively. The Capability Approach defines a person’s capacity to live a fulfilling life based on the range of valuable opportunities and experiences, such as good health or meaningful relationships, that they can truly access and engage in.

The new development paradigm represents a shift from the previous approach, characterized by two key changes. Firstly, development now places emphasis on the individual as the central unit of analysis, rather than solely focusing on the economy. Secondly, the assessment of progress is based on capabilities and freedoms rather than income alone. As a result, the fundamental question to consider when comparing societies becomes “What are the abilities and opportunities that each person possesses?” This approach, pioneered by Sen, goes beyond evaluating the overall well-being of a society and instead examines the specific opportunities accessible to each individual.

The Capability Approach emphasizes the importance of what individuals can do and be, rather than what they possess or how they feel. According to Sen, when analyzing well-being, it is necessary to shift our focus from traditional indicators like income to the actual opportunities available to a person, which are reflected in their functionings and capabilities. Functionings encompass the various activities and states that a person achieves, such as active participation in society and good health. On the other hand, capabilities refer to a person’s real or substantial freedom to achieve those functionings, such as the ability to engage in societal life. The Capability Approach highlights the significance of individuals’ capabilities, regardless of whether they choose to exercise them or not.

Capability Approach and Inequality

Within the capability approach framework, the symbiotic relationship between poverty and inequality is corroborated as well. According to Sen’s framework, the goal should not be to equalize outcomes because different individuals may experience outcomes differently in terms of their well-being. The relationship between outcomes and well-being is influenced by circumstances beyond individual control, such as age, gender, family background, and disability. It is also influenced by social conditions like healthcare systems, educational systems, crime rates, and community relationships. Therefore, the focus should be on equalizing the opportunities available to individuals to exercise their freedoms, rather than striving for equal outcomes. In this perspective, inequalities in opportunities are seen as limitations on people’s choices and freedoms, which have a negative impact on their human development and well-being.


Amartya Sen’s lens of measuring poverty via the Capability Approach offers a framework for analyzing poverty that prioritizes the inherent value of individuals’ capabilities, rather than viewing income as the sole measure of importance. It emphasizes the need for a multidimensional assessment in understanding poverty and takes into account various constraints that can restrict people’s lives. The concept of development has evolved into human development, leading to a shift in the measurement of development, poverty, and inequality from a single dimension to multiple dimensions. This shift has also brought about significant changes in policy making, with a greater focus on improving multiple dimensions to promote human development, rather than solely focusing on increasing economic income. By emphasizing the intrinsic significance of people’s capabilities rather than just their material resources, this approach directs attention to those who experience impoverished lives, and not just depleted wallets.

Rameen Siddiqui
Rameen Siddiqui
I am a young leader and activist and my main focus areas are Sustainable Development, Political Economy and Advocacy. Also a Youth Member of United Nations Association of Pakistan (UNAP), Currently pursuing BS Economics and Finance from Greenwich University.


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