---
title: "Sen's three values of democracy, read for managers"
description: "Sen separates the intrinsic, instrumental and constructive value of democracy. His reply on growth and transparency, plus a question table for a firm."
url: "https://staging.khoi.co.uk/en/blog/ba-gia-tri-dan-chu-theo-sen"
lang: en-GB
author: "Lê Quốc Khôi"
date: 2026-11-03
updated: 2026-11-03
topics: ["Ethics & corporate governance"]
tags: ["Amartya Sen", "Democracy", "Development as freedom", "Transparency", "Global business"]
---

# Democracy and business: Sen's three values of democracy

## Key takeaways

- According to Amartya Sen (1999), democracy enriches citizens' lives in three ways: intrinsic value (political freedom is part of human freedom), instrumental value (people get a hearing for their claims) and constructive value (public discussion helps define what counts as "needs") (Sen, 1999, p. 10).
- The claim that authoritarian systems grow faster rests, Sen says, on sporadic evidence; systematic studies give no support to a general conflict between political rights and economic performance (Sen, 1999, pp. 6-7).
- On the Asian financial crisis, Sen links the lack of transparency in business, and of public participation in reviewing financial arrangements, to how the crisis developed (Sen, 1999, p. 9).
- The question table for "Company W", a hypothetical firm, is my analogy. Sen does not discuss firms, and this post passes no judgement on any country's regime.

In the summer of 1997 a leading Japanese newspaper asked Amartya Sen what he thought was the most important thing to happen in the twentieth century. He answered: the rise of democracy as the preeminently acceptable form of governance (Sen, 1999, p. 3). For a manager the useful question is practical. Sen offers no investment model; he offers a way of splitting the value of democracy into three, and each part suggests a question about where bad news can arrive and who has to answer it.

## What does Sen mean by democracy, and why call it a universal value?

Sen does not equate democracy with majority rule. In his account it requires voting and respect for election results, but also the protection of liberties and freedoms, respect for legal entitlements, and free discussion with uncensored distribution of news. Elections can be deeply defective if the different sides lack an adequate opportunity to present their cases or the electorate is not free to obtain news (Sen, 1999, pp. 9-10).

He also calls the idea of democracy as a universal commitment quite new. Nineteenth-century theorists asked whether one country or another was "fit for democracy". Sen says the question itself was wrong: a country does not have to be deemed fit for democracy; it has to become fit through democracy (Sen, 1999, p. 4). Democracy, he adds, has become a "default" belief, taken to be right unless someone negates it (Sen, 1999, p. 5).

## What are the three values: intrinsic, instrumental and constructive?

Sen distinguishes three ways democracy enriches citizens' lives. First, political freedom is part of human freedom in general, so exercising civil and political rights is an important part of a good life for individuals as social beings; being prevented from taking part in the political life of the community is a major deprivation. Second, democracy has instrumental value because it enhances the hearing people get when they express and support their claims to political attention, including claims about economic needs. Third, constructive value: practising democracy gives citizens an opportunity to learn from one another and helps society form its values and priorities (Sen, 1999, p. 10).

> **Figure:** [Three values of democracy](https://staging.khoi.co.uk/en/framework/democracy-three-values) Democracy as a universal value: three values and two rebuttals (from the library's table; its origin is Sen, 1999).

Sen flags the third for further exploration. He argues that understanding what "economic needs" are, their content and their force, may itself require discussion and exchange; the rights that guarantee open discussion, debate, criticism and dissent are central to forming informed and considered choices (Sen, 1999, p. 10). In general, he says, we cannot take preferences as given independently of public discussion (Sen, 1999, p. 10).

## How does Sen answer the claim that authoritarian rule grows faster?

Sen calls it the "Lee hypothesis", after Lee Kuan Yew, who advocated it. He says it rests on sporadic empiricism, drawing on very selective and limited information instead of general statistical testing across the wide-ranging data available. He sets Botswana, the country with the best record of economic growth in Africa and an oasis of democracy on that continent, against the selective examples, to show that one chosen case is no definitive proof either way (Sen, 1999, p. 6).

His conclusion is that there is no convincing general evidence that authoritarian governance and the suppression of political and civil rights benefit economic development. Systematic studies, he cites Robert Barro and Adam Przeworski, give no real support to a general conflict between political rights and economic performance; some find a weakly negative relation, others a strongly positive one (Sen, 1999, pp. 6-7). My reading, for a manager, is that fast growth in a country says nothing yet about its political cause. Sen insists on examining causal processes, not only statistical links (Sen, 1999, p. 7).

## Does democracy have a protective function?

Sen says it does, and that is the instrumental value. Political and civil rights give people the opportunity to draw attention forcefully to general needs and demand public action, and a government's response to acute suffering often depends on the pressure put on it (Sen, 1999, p. 7). He states a rule: no substantial famine has ever occurred in an independent, democratic country with a relatively free press. India had famines under British rule right up to independence, the last in 1943, and they disappeared with multiparty democracy and a free press (Sen, 1999, pp. 7-8).

The part closest to business is his discussion of the East and Southeast Asian financial crisis. Sen writes that in some of these economies, including South Korea, Thailand and Indonesia, the development of the crisis was closely linked to a lack of transparency in business, in particular a lack of public participation in reviewing financial arrangements, and that the absence of an effective democratic forum was central to that failing (Sen, 1999, p. 9). He also argues that many economic technocrats recommend economic incentives, which markets provide, while ignoring political incentives, which democratic systems could guarantee, and that this means opting for a deeply unbalanced set of ground rules (Sen, 1999, p. 9).

In a later paper Sen recalls sorting freedoms, in his book, into five kinds: economic empowerment, political freedoms, social opportunities, protective security and transparency guarantees, and says there is nothing particularly sacrosanct about the classification (Sen, 2006, p. 161). He also writes that freedom is both the primary objective and the principal means of development (Sen, 2006, p. 160). The library's [development as freedom](https://staging.khoi.co.uk/en/framework/development-as-freedom) table comes from that paper.

## What does Stiglitz add?

Joseph Stiglitz (2015) warns from another direction: he argues that economic inequality inevitably translates into political inequality, so voice in a democracy is not evenly shared either (Stiglitz, 2015). I use this as a limit on the instrumental value: having a channel to speak does not mean everyone is heard equally. The post uses the conference version of his paper, without the page numbers of the book chapter, so it gives no page locator for it.

## What could Company W ask, using the three values?

The example below is entirely hypothetical; "Company W" and its figures are mine and belong to no real business. Company W is a 120-person food-processing plant with two production lines. In six months staff logged 14 reports of packaging defects, and only two reached the owner; the rest stopped at the line supervisor. The table turns Sen's three values into management questions. The two right-hand columns are my analogy, not Sen's argument.

| Sen's value | What Sen says | The question at Company W | Sign it is missing |
|:--|:--|:--|:--|
| Intrinsic | Being prevented from taking part in common life is a major deprivation (Sen, 1999, p. 10) | Can staff speak on what affects them, even when speaking may not improve the result? | Shift and quota decisions are announced, not asked about |
| Instrumental | A government's response often depends on the pressure put on it (Sen, 1999, p. 7) | Does bad news reach the decision-maker, and is anyone obliged to answer? | 12 of the 14 reports stopped at the supervisor; nobody replied to the reporters |
| Constructive | Public discussion helps define "needs" (Sen, 1999, p. 10) | Are the plant's priorities, such as what counts as a "serious packaging defect", discussed with the people on the line? | The severity threshold is set by one department and unknown to the line |

Possible actions: an email address for the owner for reports that skip a level, a monthly meeting with representatives of both lines, and a fixed reply deadline. All three are my suggestions.

This suits you if you have several layers of management and bad news takes a while to arrive. It does not suit you if the firm is a few people in one room, or if asking staff will not be followed by a commitment to respond: in my view a channel that listens and does not answer can be worse than none. A company is not a state; employees can leave, owners have rights of their own, and Sen writes about governments, not firms.

## Going deeper: what does each source cover, and what is unchecked?

Page numbers for Sen (1999) follow the "End Page" markers in the Journal of Democracy copy. From Sen (2006) the post uses only two clear points, on pages 160 and 161, and quotes nothing. Stiglitz (2015) is the conference version of the Pontifical Academy of Sciences (2014), so the library chapter's page numbers are not available; one point is paraphrased.

Four limits. First, Sen argues about the value of democracy; he does not build a model of investment risk or corporate governance, and this post passes no judgement on any country's political system. Second, the famine and crisis examples are Sen's, and the post does not recheck the underlying data. Third, the library records the "development as freedom" table as drawn from Sen (2006), but the post uses only part of that paper. Fourth, Company W, the question table and the actions are my analogy and assumptions, untested on a real business.

## Frequently asked questions

### Does Sen say democracy makes an economy grow faster?

No. He writes that cross-country studies give no support to the idea that political rights conflict with economic performance, and that the hypothesis of no clear relation in either direction remains extremely plausible (Sen, 1999, pp. 6-7). For him democracy matters in itself, so the case for it does not depend on a growth result.

### What is the constructive value of democracy?

According to Sen, practising democracy gives citizens an opportunity to learn from one another and helps a society form its values and priorities. Even the idea of "needs", including economic needs, requires public discussion and an exchange of information and views (Sen, 1999, p. 10). It is the third value, alongside the intrinsic and the instrumental.

### Can I use the three values as a country-risk score?

I have no source showing that this works. Sen argues about the value of democracy; he does not build an investment-risk model. The question table in this article is my way of turning his argument into management questions, and it has not been tested on any data.

### Is a company a small democracy?

No. Employees can leave, owners have rights of their own, and Sen writes about governments, not firms. I borrow only three functions, hearing bad news, responding to it and forming priorities together, to ask management questions. That analogy is mine.

## References

- Sen, A. (1999) ‘Democracy as a universal value’, *Journal of Democracy*, 10(3), pp. 3–17. https://doi.org/10.1353/jod.1999.0055
- Sen, A. (2006) ‘Development as freedom: an India perspective’, *Indian Journal of Industrial Relations*, 42(2), pp. 157–169. Available at: https://www.jstor.org/stable/27768063.
- Stiglitz, J.E. (2015) ‘The price of inequality: how today's divided society endangers our future’, in *Sustainable humanity, sustainable nature: our responsibility, Extra Series 41*. Vatican City: Pontifical Academy of Sciences, pp. 379–399. https://doi.org/10.7916/d8-qjpx-4x05

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