This paper compares human capital theory with the capability approach and lays out the problems with the theory. As a knowledge paradigm for education and development, it finds the theory wanting. However, it has remained the foundation for sectoral work in education and health by international financial institutions. The paper spells out the problems, historically, with World Bank lending in the education sector, some of which follow from human capital theory, while others follow from a broader neoliberal agenda. It concludes by delineating the foundational elements of an alternative knowledge paradigm for ?education for all?, based on the capability approach and its extension.
