Social choice theory or social choice is a theoretical framework for analysis of combining individual preferences, interests, or welfares to reach a collective decision or social welfare in some sense. [ 1 ] A non-theoretical example of a collective decision is enacting a law or set of laws under a constitution . Social choice theory dates from Condorcet 's formulation of the voting paradox . Kenneth Arrow 's Social Choice and Individual Values (1951) and Arrow's impossibility theorem in it are generally acknowledged as the basis of the modern social choice theory. [ 1 ] Social choice blends elements of welfare economics and voting theory . It is methodologically individualistic , in that it aggregates preferences and behaviors of individual members of society.
Amartya Kumar Sen , CH (born 3 November 1933) is an Indian philosopher and economist who was awarded the 1998 Nobel Memorial Prize in Economic Sciences for his contributions to welfare economics and social choice theory , and for his interest in the problems of society's poorest members. Sen is best known for his work on the causes of famine , which led to the development of practical solutions for preventing or limiting the effects of real or perceived shortages of food. [ 3 ] He helped to create the United Nations Human Development Index . [ 3 ] In 2012, he became the first non-U.S. citizen recipient of the National Humanities Medal . [ 4 ] He is currently the Thomas W. Lamont University Professor and Professor of Economics and Philosophy at Harvard University .
The Singer–Prebisch thesis (also Prebisch–Singer thesis , PST , or Prebisch–Singer hypothesis ) postulates that terms of trade , between primary products and manufactured goods, deteriorate in time. In 1950, the economists Raúl Prebisch and Hans Singer independently developed the thesis that countries that export commodities ( developing countries ) in time would import fewer manufactured goods relative to a given level of exports. However, during the 2000s commodities boom , the terms of trade of most developing countries improved while east Asia (with much of its export to be manufactured goods) has deteriorated terms of trade. [ 1 ]