The capabilities approach

Capabilities and functionings are new and attractive concepts for assessing the well-being and advantage of individuals. Functionings refer to a person’s achievements, i.e. what she manages to do or to be. Capabilities refer to her real opportunities and incorporate the idea of freedom. We discuss how recent theoretical and empirical work has improved our insights in some of the key questions of the approach. How to measure opportunities and how to balance freedom and responsibility? How to formulate a list of capabilities which can be used to analyse changes over time and differences between different societies without being open to manipulation? How to construct an overall index of well-being and what should be the relative role of a priori ethical evaluations and of the opinions of the individuals themselves? What is the relationship between measures of well-being and advantage at the individual and at the aggregate level? To make further progress it is crucial, first, to estimate structural models with individual data, analysing the link between individual achievements, the socioeconomic and environmental background of the persons concerned and the specific features of the individual processes of choice and decision-making; and, second, to integrate the insights from these models in a coherent ethical framework specifying the role of individual preferences and the limits of personal responsibility.