In his famous Presidential Address of the Development Studies Association given in Dublin in 1982 Sen popularised the idea that economic development is not simply an enhancement of per capital income but should be concerned with "entitlements" of people which generate capabilities to "escape avoidable morbidity, be well nourished, be able to read and write and communicate, take part in literary and scientific pursuance and so forth". Such an enlargement of the concept of development earned for Sen the encomium of his fellow economists who consider him as the "conscience keeper" of their profession. The traditional development economics fell into disrepute during the seventies and the eighties as a large band of influential economists asserted that traditional neoclassical economic theory is quite well equipped to treat the problems of the Third World and the discipline of Development Economics cannot justify its separate existence. It was Sen who resuciated the gasping discipline of economic development by redefining its role and assigning a new meaning to it.

In an article published in 1993 in Scientific American titled "Economics of Life and Death", Sen revealed that African Americans, though living in a rich country, are highly disadvantaged people who are relatively deprived and are absolutely deprived. The mortality rate among Afro-Americans is higher than that of Indians and much higher than the mortality rate of Sri Lankans. From such findings Sen has developed a broader meaning of development – development as freedom. Development is a means of achieving and securing freedom, which the mankind has been valuing from time immemorial.

The theme of Sen’s lecture originated from his latest book, " Development as Freedom", which is awaiting publication simultaneously in England in the USA and in India. In his latest work Sen catalogues vanities of unfreedom – famines denying the basic freedom to service, undernourishment, inequality between men and women and failure to secure gainful employment. In richer countries there are very many disadvantaged people. About 43 million American have to live without guaranteed health security. A very high incidence of unemployment among the people of France, Germany and Italy is also a kind of unfreedom that denies unemployed people their right to live their lives meaningfully.

In his latest book Sen has stressed the liberating role of the market. The market not only helps produce growth but also secure freedom for the economic agents. For example if there is no freedom to participate in the labour market the workers are denied of their basic rights to choose their employees and choose the right type of job. The system of wage labour constitutes a major freedom from the system of tied labour in the in the pre-capitalist era. Similarly market confers every individual the right to participate and act according to free will. Sen, therefore, considers the freedom to enter into the market a major freedom.

The role of markets depends not only what they can do but what they are allowed to do. Markets become efficient when competition is allowed a free play and monopoly does not take the centre of stage and vitiate the economic atmosphere through its ineptitude.

Denial of political liberty and general civil rights constitutes a major departure from the achievement of freedom. Sen does not believe in the Lee thesis – popularised by Singapore’s iron man, See Kwan Yew – which suggests that an authoritarian policy promotes rapid growth. In case of major economic disasters like famine lack of information in an undemocratic society can immune the rulers from any major criticism and cause the famine to perpetuate. Even China, now recognises that the mortality rate in the great famine was underplayed by the earlier government. When there are political freedom people can take active part in the decision making process of the government and minimise the misery associated with famine and natural disasters.

Sen, in his latest work, has emphasised the constitutive and instrumental importance of freedom. The constitutive elements of freedom are rights, opportunities and entitlements. The instrumental aspects of freedom are: (i) economic entitlements, (ii) political rights including civil rights, (iii) social opportunities, the arrangements for education, health are etc, (iv) social interaction which provides transparency guarantee – the freedom to deal with one other with openness, and (v) protective security, which provides disadvantaged people with an adequate safety not. In a democratic set up these instrumental aspects flourish and these, in turn, earn for the people freedom disadvantageous political and economic environment, which essentially is the goal of development.