Amartya Sen and the Critique of the Normative–Ethical Foundations of Welfare Economics and Development (A Critical Approach to the Welfare Policies of the Fifth and Sixth Governments of the Islamic Republic of Iran)

Abstract

Welfare economists maintain that markets are not always capable of allocating resources efficiently. They refer to such situations as “market failures” and argue that, under these conditions, political institutions should intervene as complements to or substitutes for the market. The principles of welfare economics were first formulated by Alfred Pigou. Welfare economists contend that governments are responsible for correcting these failures, as uncoordinated individual decision-making does not lead to socially optimal outcomes. The most efficient form of intervention is the least costly solution, determined through cost–benefit analysis. In this context, Amartya Sen, as an economist and political philosopher, critically examined the normative foundations of welfare economics and development, seeking to address the inevitable and dysfunctional contradictions within these theories by incorporating the human, social, and cultural dimensions of society. The main objective of the present study is to critically evaluate the general approaches and socio-economically oriented policies of the fifth and sixth administrations of Hashemi Rafsanjani through the lens of welfare economics, theories of justice, and Sen’s capability approach. The present study adopts a descriptive–analytical method, and its central research question is as follows: based on Sen’s capability theory, what are the most significant characteristics of the welfare policies of the fifth and sixth governments? The research hypothesis suggests that the Hashemi Rafsanjani administration, by adopting policies of economic adjustment, privatization, and the implementation of large-scale infrastructure projects, effectively neglected the socio-political foundations of society and prioritized the economy within its governance framework. However, this approach not only generated a form of political crisis but also intensified economic inequality within Iranian society. It can be argued that the general policies of the Hashemi government, in addressing economic issues through a relatively radical adoption of welfare economics and development paradigms, sidelined alternative models of economic development. Rather than focusing on the expansion of individuals’ capabilities to reduce poverty and inequality and to open the political space for rational national dialogue, the Hashemi administration moved toward constructing a society that was politically closed and economically highly dependent on the state.