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REVIEW PAPER
Locating Financial Capability Within Capability Approach – Theoretical Survey
1
Chair of Financial Markets and Public Finance, University of Rzeszów, Poland
Submission date: 2021-12-22
Final revision date: 2022-02-05
Acceptance date: 2022-03-23
Publication date: 2022-03-31
GNPJE 2022;309(1):96-106
KEYWORDS
JEL CLASSIFICATION CODES
ABSTRACT
The integration of financial capability with the capability approach remains an
open and challenging issue. This paper offers a theoretical exploration of the
financial capability framed within Sen’s capability approach in an interdisciplinary
way. It focuses on the fundamental conceptual aspects of the capability
approach, and on how we may use that framework for the development of financial
capability theory. Moreover, the presented theoretical study addresses the
issue of the critical role of constrained choice using Simon’s bounded rationality
and ecological rationality approach. We used one type of research and it is conceptual
analysis. It helped us to better understand and explain the concept of
financial capability and address three important issues related to that concept.
In this paper, we offer a more transparent and consistent approach that takes
into account theoretical evidence on financial capability. We complemented
the financial capability literature by highlighting the critical role of the classic
works of A. Sen and more recently the influential work of I. Robeyns. Thus,
our headline finding is that using A. Sen’s approach as a general framework for
the financial capability may offer a more transparent and consistent approach
to define financial capability.
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