infonet-economy

This article presents a theoretical framework that combines virtues and strengths of the Capability Approach (CA) and Equality of Opportunity (EOp) approach for analyzing public policies that aim to improve individual wellbeing and social justice. We show that neither approach is sufficient on its own for this goal. It is particularly useful to combine the two approaches because the CA offers a positive way of thinking about what wellbeing is, while the EOp Approach provides more formal insights on how to configure public policies to achieve social justice and increase individual wellbeing from a normative perspective. We make the case that EOp in its original (ex-post) conception is too heavily centered on lifestyle outcomes and oblivious to individual heterogeneity. However, we argue that it contains elements that are compatible with the CA rationale from an ex-ante point of view. Individual efforts play a crucial conceptual role in our proposed combination because they influence and are influenced by individual capabilities. Our optimal policy for improving wellbeing with EOp is one that aims to equalize expected capabilities across different groups, characterized by circumstances, through a maximin algorithm. We provide a technical analysis of our optimal policy taking into account the influence of circumstances and policies on efforts and capabilities.