In 1990, the United Nations Development Programme adopted an ambitious initiative aimed at improving the standard of living of people around the world. Member states agreed to align their economic policies with the initiative's objectives. This framework of goals became known as the Human Development Index. The index was developed by two internationally renowned experts: Mahbub ul Haq of Pakistan and Richard Jolly of Scotland. Its indicators were formulated on the basis of the theory developed by the Indian philosopher Amartya Sen.
The launch of this initiative is widely regarded as a fundamental shift in the concept of development and progress because it transformed the way development projects are conceived. Instead of focusing on economic indicators to measure outcomes, the emphasis shifted toward enabling individuals to become fully self-reliant, expanding the range of choices available to them, and enhancing their ability to use those choices to realize their own aspirations.
For some people, perhaps many, this may sound like little more than abstract theory. They may say to themselves: ultimately, what we want is a good income that provides decent housing, quality health care, and a comfortable retirement. If that is the case, why dwell on choices, standards, and independence? Some may even say categorically: if I had to choose between money on the one hand and personal independence and broader choices as a citizen on the other, I would certainly choose the former.
These are, in any case, different ways of looking at life. Some people judge the value and quality of life by the amount they own. Others measure them by the opportunities and choices available to them, in other words, by the degree of freedom they enjoy. If you find the first view more appealing, there is no need to wear yourself out trying to persuade others. And if they are convinced by the second, you are under no obligation to justify your disagreement.
Classical development theory assumed that greater economic dynamism would satisfy people's essential needs and thereby bring them the happiness they sought. Amartya Sen, however, argued that money alone does not produce happiness, unless one adopts the outlook of misers, who derive their greatest satisfaction simply from looking at the wealth accumulated in their vaults. Fortunately, misers are a minority.
A closer look at people's lives shows that wealth alone does not create happiness, although it certainly helps. It is often noted, for example, that servants in the palaces of the Russian tsars were among the wealthiest people in the empire and even owned entire villages. Yet they were deprived of the most basic freedoms: taking their children on a short outing, selling part of their property, or arranging the marriages of their sons and daughters all required the tsar's permission. In that sense, they were slaves, or something close to slaves, despite their wealth.
The same point is illustrated by the story of three people. The first is starving because he has neither food nor the money to buy it. The second fasts throughout the day for religious reasons despite having ample food and money. The third possesses many times the wealth of the second but is forbidden to eat because of his health. Clearly, the first and the third have no freedom of choice, unlike the second. Which of the three, then, is the happiest: the wealthy but ill man, the destitute poor man, or the one who fasts of his own free will?
How, then, do we achieve the difficult balance between a reasonable standard of living and a broad range of choices?
According to Amartya Sen, development projects should pursue two objectives. The first is to ensure a reasonable standard of livelihood that enables people generally to attain the average standard of living in their own country. This includes providing employment, or opportunities for enterprise, together with health care, education, and communications. The second is to develop the country's legal and institutional environment so that it protects and facilitates individual initiative. The clearest expressions of this are equality before the law and the ability to seek redress before an independent judiciary.
