The Economics of Belonging: Institutions, Participation, and a Structural Reinterpretation of the Capability Approach

Carlos Federico Obregon Diaz

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops the Economics of Belonging as a structural extension of the capability approach. It proposes that capabilities are not primary units of analysis but outcomes of institutional belonging, defined as effective participation within institutional structures. The analysis integrates institutional economics, social choice theory, mechanism design, and game theory to demonstrate that aggregation from individual states is structurally infeasible under incomplete information and multiple equilibria. A dynamic framework is developed in which belonging drives effective demand and sustained economic growth through middle-class expansion. The paper contributes to development theory by providing a unified institutional and relational framework linking participation, demand, and long-term growth.

Keywords: Economics of Belonging; Institutions; Effective Demand; Economic Development; Social Choice; Game Theory; Middle Class (search for similar items in EconPapers)
JEL-codes: B41 D02 O11 O43 (search for similar items in EconPapers)
Date: 2026-04-21
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:128817

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