#5 is for Freedom

Armartya Sen asserts that freedom is not only a product of development but also its principal means.  Instead of focusing on economic development as the first step toward greater freedom, she views development as the expansion of individual freedoms.  Sen argues that political, social, and economic freedoms strengthen each other and all contribute toward a more secure, lower transactions cost, economic environment with great incentives to participate.  In this way, economic development must seek to reduce restraints on individuals to allow them to find the most efficient means to their highest valued ends.

Sen warns of the “danger” of viewing poverty strictly in terms of income.  While income may be the most tangible economic measure of poverty that does not also mean it is the most important.  Income deprivation may indeed be the primary cause and consequence of poverty in many cases but many other factors are intertwined in the realities of being poor.  By overlooking other aspects of poverty, development initiatives risk defining their programs in terms of their performance measurement: income.  Sen argues that all five types of freedom: economic facilities, social opportunities, transparency guarantees, protective security, and political freedoms increase an individuals capability.  Each alone is not enough but by strengthening each in turn their complementarities cause greater increases in all.  Thus, economic development becomes increasingly more effective as it positively affects more of these essential freedoms.  Increasing income may help impoverished people but in order for the quality of life for the poor population to truly grow, their fundamental freedoms must be strengthened.

La Ceiba must focus on economic facilities but we must maintain awareness of  constraints on other types of freedom as well.  I think we have the ability to increase the  social opportunities of our clients as well as their economic ones.  The three other freedoms seem to rest in the realm of government but we may be able to indirectly affect those as well.  Greater social and economic opportunities should also increase political freedoms and give Hondurans greater say in their government to demand transparency and protection.  We can also promote these measures by providing an example of transparency in our organization and equal opportunities for all (well…women at this point).  So, though our focus should remain on economic opportunities, we should not forget how La Ceiba’s effectiveness will increase if we can reduce constraints on other forms of freedom as well.

3 Responses to “#5 is for Freedom

  • salvarez2012
    14 years ago

    Your interpretations of Sen very closely reflect my thoughts on the issue of measuring poverty alleviation in ways other than just increased income. You make a really good point about the danger involved with development initiatives “defining their programs in terms of their performance measurement: income”, I completely agree. I think what makes La Ceiba unique is that we’re exploring and respecting the possibility that income may not be everything.I think recognizing this idea legitimizes our claim as a client-centered microfinance, moreover it helps us see our clients for more than just what their income is worth. I believe that understanding the unfreedoms associated with the poverty our clients’ face is important in prescribing solutions to problems that address more than just the issue of increasing income. I also agree that LC may not be able to make the government more transparent, secure, or politically free directly; but by granting opportunities for economic and social growth we facilitate our clients’ freedom to demand greater transparency and protection from the government on their own. Finally, the last point that I hadn’t necessarily considered is the ability of LC to set an example of transparency and equal opportunity in our own organization. The way we conduct ourselves and do our work responsibly is an important reflection on how well we understand the importance of transparency in realizing an organization’s full potential.

  • I agree with Sarah about transparency in La Ceiba: it’s a really interesting point, and one we can definitely do right now, with the small size we have. Much as Sen argues, if we put off transparency as a luxury reserved for larger, richer organizations, then that defeats the purpose, and transparency can, as you point out, help us achieve our goals of poverty alleviation. So: how do we go about making La Ceiba transparent, not just for ourselves or for donors, but for our clients?

  • @ laurad,
    “how do we go about making La Ceiba transparent, not just for ourselves or for donors, but for our clients?”

    I agree completely and I think we are taking steps in the right direction. The chart that was presented last class, where it had all the possible interest rates and payments pre-calculated, seems like a really good way to improve customer trust and satisfaction.

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