From Capital to Capabilities: Human Development Theory and New Directions in Economic Development

Abstract

This paper investigates the potential of human development theory to provide alternatives to long-standing practical and conceptual problems in traditional economic development. We show that the capabilities approach developed by Sen and Nussbaum provides new solutions to four long-standing problems that define economic development activities focused on industrial recruitment and highly skilled professionals: (1) competition for scarce material resources, (2) connection to other planning specializations, (3) cities’ limited control over economies, and (4) coordinating the unmanageable networks that oversee plans. We demonstrate that these benefits are actual, rather than aspirational, by documenting the growth and diffusion of three types of urban economic policies that enact human development ideas: employment standards, reduced-cost education, and universal public programs