The Roots of Human Development: Haq, Sen, and the Capability Approach

For most of the twentieth century, the success of a nation was judged by a single number: how much its economy produced. A country with rising factory output and a growing Gross Domestic Product was considered “developed,” regardless of whether its citizens lived long, healthy, or educated lives. This narrow view dominated economic planning for decades. Then, in 1990, a quiet revolution in thinking placed people, rather than production, at the centre of development. This shift was largely the work of two economists, Mahbub ul Haq and Amartya Sen, whose ideas continue to shape how we measure progress today.

Why economic growth alone fell short 🔗

Before the concept of human development took root, planners relied almost entirely on GDP and per capita income to gauge how well a country was doing. GDP measures the total value of goods and services produced within a country over a period of time. It is useful for understanding the size and activity of an economy, but it has a serious blind spot: it says nothing about how that wealth is distributed or whether ordinary people actually benefit from it.

A country could record impressive growth figures while large sections of its population remained illiterate, malnourished, or without access to basic healthcare. Income could rise on paper even as the quality of everyday life stagnated. The economists behind human development argued that existing measures of progress failed to account for the true purpose of development, which is to improve people’s lives rather than simply expand the economy.

The problem with treating income as the goal 🔗

The deeper issue was philosophical. Treating income as the ultimate goal confuses the means of development with its ends. Money is valuable because of what it allows people to do and become, not for its own sake. A person earning a decent wage but living in a region with no schools or hospitals cannot convert that income into a genuinely better life. Focusing only on national averages also hides inequality, since a few wealthy individuals can pull up the average while the majority sees little change.

Mahbub ul Haq and the birth of human development 🔗

Mahbub ul Haq was a Pakistani economist who spent decades wrestling with these questions. He worked at the World Bank during the 1970s and later served as his country’s finance minister. From these positions he watched how development policy was made, and he grew convinced that the obsession with income growth was leading planners astray. He is widely regarded as the pioneer who shifted the focus of development discourse from national income growth to people and their well-being.

Haq’s central argument was simple but powerful: development should be about enlarging people’s choices so they can lead long, healthy lives with dignity. He believed economic policies ought to prioritise human well-being directly, tackling poverty, poor education, and ill health rather than waiting for growth to eventually “trickle down” to the poor.

From idea to institution 🔗

In 1989, Haq was appointed special advisor to the administrator of the United Nations Development Programme (UNDP). There he set up the Human Development Report Office and assembled a team of leading economists to turn his philosophy into a practical tool. The result was the first Human Development Report, published in 1990, which opened with the now-famous idea that people are the real wealth of nations. This single sentence captured the entire shift in thinking that Haq had been working towards for years.

What made Haq effective was that he was both a thinker and a doer. Having held real political office, he understood that theoretical debates alone would not change anyone’s life. He insisted on policies that made a measurable difference, and he wanted a statistical measure that could rival GDP in influence and clarity.

Amartya Sen and the capability approach 🔗

If Haq was the institution-builder, Amartya Sen provided much of the intellectual foundation. Sen, an Indian economist and philosopher who won the Nobel Prize in Economics in 1998, had spent years developing what is known as the capability approach. The human development philosophy is anchored in Sen’s work on human capabilities, and the two men were close friends and collaborators from their student days in Cambridge.

Sen’s core insight was that we should evaluate a person’s life not by the resources they possess or the income they earn, but by what they are actually able to do and to be. He argued that much more information about the quality of human lives should be taken into account when judging how well a society is doing.

Functionings and capabilities 🔗

Two terms sit at the heart of Sen’s framework. Functionings are the various “beings” and “doings” that people value, such as being well-nourished, being healthy, attending school, or taking part in community life. Capabilities are the real freedoms a person has to achieve those functionings. According to the framework, capabilities are the real freedoms to achieve valued functionings.

The distinction matters enormously. Consider two people who are both going without food. One is fasting by choice during a religious observance; the other is starving because they cannot afford a meal. Their functioning, in terms of nutrition, looks identical. But their situations are completely different because one has the capability to eat and chooses not to, while the other has no such freedom. Sen argued that the freedom to choose, not just the final outcome, is what truly matters when we assess well-being.

Development as freedom 🔗

Sen brought these ideas together most fully in his influential book Development as Freedom, published in 1999. In it, he redefined development as the process of expanding the real freedoms that people enjoy. True development, he argued, removes the major barriers to freedom, such as poverty, poor health, lack of education, and the denial of political and civil rights. Freedom, in this view, is both the primary means and the ultimate goal of development.

This was a striking reversal of conventional economics. Instead of seeing freedom as something a country can afford only after it becomes rich, Sen showed that freedoms such as access to education, healthcare, and political participation are themselves engines of development. An educated, healthy, and politically active population is far better placed to drive sustained progress.

The Human Development Index: turning philosophy into numbers 🔗

A philosophy needs a measurable tool if it is to compete with something as concrete as GDP. This is where the Human Development Index (HDI) comes in. Created for the 1990 Human Development Report, the HDI was designed as a single number that captures more of human life than income ever could. Interestingly, Sen was initially sceptical of reducing the richness of his ideas to one index, but Haq persuaded him that a simple, GDP-rivalling measure was needed to grab the attention of policymakers.

The HDI rests on three foundation stones, each representing a basic dimension of a decent life. The first is a long and healthy life, measured by life expectancy at birth. The second is knowledge, measured through education indicators. The third is a decent standard of living, measured by income. The index combines these into a score between 0 and 1, allowing countries to be compared and classified by their level of human development.

What the three dimensions actually measure 🔗

Each dimension is captured through specific indicators. Life expectancy at birth serves as a proxy for health, on the reasonable assumption that people cannot improve their lives unless they survive and stay reasonably healthy. Education is measured using mean years of schooling for adults and expected years of schooling for children. The standard of living is captured through Gross National Income per capita, adjusted for purchasing power so that comparisons across countries remain fair.

Crucially, income enters the HDI in a deliberately limited way. The calculation uses the logarithm of income, which reflects the idea of diminishing returns: an extra rupee means far more to a poor person than to a rich one. This design choice keeps income in its proper place as a means to human development rather than the goal itself.

How the calculation evolved 🔗

The way the HDI combines its three dimensions has changed over time. For its first two decades the index used a simple arithmetic average. In 2010, marking the report’s twentieth anniversary, the UNDP switched to a geometric mean that assigns equal weight to all three dimensions. This change means a country can no longer compensate for terrible performance in one area, such as health, simply by being strong in another, such as income. Balanced progress across all three dimensions is now required, which reflects the underlying philosophy far more faithfully.

Why these ideas still matter 🔗

The human development approach changed the global conversation. The annual Human Development Reports are widely covered in the media, and countries pay close attention to where they rank. For a country like India, the framework offers a sharp reminder that strong economic growth does not automatically translate into better lives for everyone. Progress in healthcare, schooling, sanitation, and gender equality must be pursued directly.

The work of Sen, often in collaboration with the economist Jean Drèze, has been particularly influential in analysing Indian development. They highlighted how the southern state of Kerala achieved remarkably high life expectancy and literacy despite relatively modest income levels, demonstrating that public investment in health and education can deliver human development even without spectacular economic growth. This stands in contrast to states that grew rapidly in income terms but lagged in social indicators.

The legacy of Haq and Sen is that we now have a richer vocabulary for what progress means. Newer measures have built on their foundation, including the Inequality-adjusted HDI, which discounts a country’s score according to how unequally health, education, and income are distributed, and the Gender Development Index, which compares achievements between men and women. Each of these extensions carries forward the original insight that development is ultimately about people, not just production.

What do you think? If you had to design a single index to capture how well a society is doing, which dimension of human life would you add that the HDI currently leaves out? And does measuring development through a simple ranking risk reducing the very human richness that Sen and Haq wanted to protect?

References

1. https://measureofamerica.org/human-development/
2. https://blog.oup.com/2017/09/mahbub-ul-haq-philosophy-economics/
3. https://hdr.undp.org/about/human-development
4. https://ophi.org.uk/research/amartya-sen-and-ophi
5. https://iep.utm.edu/sen-cap/
6. https://kingsthinktankspectrum.wordpress.com/2025/02/03/freedom-at-the-heart-of-progress-a-review-of-amartya-sens-development-as-freedom/
7. https://ourworldindata.org/human-development-index
8. https://www.ebsco.com/research-starters/education/human-development-index-hdi
9. https://hdr.undp.org/system/files/documents/hditraining.pdf