Abstract
Cities are critical to a sustainable transition, and the wellbeing economy provides them with a framework for achieving this. This Policy Guidelines article provides an introduction to the concept for those working at the city level. It outlines the need for a wellbeing economy approach, and the origins of the concept. It then identifies six ‘ways of working’ which run through the approach—vision, measurement, collaboration, citizen participation, prevention, and creative experimentation—and provides examples of how they have been, or could be, applied at city level.
The Wellbeing Economy places human wellbeing as the ultimate goal of economic activity, while stressing the importance of respecting environmental limits.
The approach is gaining popularity amongst civil society actors and academics, and it is beginning to be implemented in local and national government.
Six ways of working are central to a wellbeing economy approach: vision, measurement, collaboration, citizen participation, prevention, and creative experimentation.
Wellbeing economy frameworks often identify three domains as priorities for their vision and for measurement: wellbeing, sustainability, and fairness.
Policymakers can choose to adopt an existing framework or develop a bespoke one—either way, contextuality is key.
A wellbeing economy approach enables a discussion about how to pool and prioritize resources and energy in a place, on a shared positive vision—rather than a siloed or problem-led approach.
Active and meaningful participation is critical for the creation of a genuine shared vision that reflects residents’ interests and their priorities for wellbeing.
Preventative approaches to social problems such as crime or mental health are consistent with the wellbeing economy’s rejection of short-termism and have been demonstrated to be significantly more cost-effective in the long run.
Policy guidelines provide a concise, actionable summary of peer-reviewed research or robust grey literature that the authors have previously published. The authors of this policy guideline were invited by the editorial team to build on Fioramonti et al. (2022) and provide an urban perspective.
Cities are critical to a sustainable transition (Webb et al., 2023) and the wellbeing economy provides a framework for them to do this. This Policy Guidelines article provides an introduction to the concept for those working at the city level. It identifies six ways of working, which are central to the wellbeing economy approach, and provides examples of how they have been, or could be, applied.
Leading proponents of the wellbeing economy define it as an “economy that is designed with the purpose of serving the wellbeing of people and the planet first and foremost” (Wellbeing Economy Alliance, 2021, p. 6). The term emerged at the beginning of the millennium, for example in the New Economics Foundation’s “well-being manifesto” (Shah & Marks, 2004), which called for governments “to promote the good life: a flourishing society where citizens are happy, healthy, capable, and engaged” (p. 2), while respecting environmental limits. This juxtaposition of human outcomes with environmental concerns was of course nothing new; it reflected definitions of sustainable development, such as the Brundtland definition (World Commission on Environment and Development, 1987), and the basic tenets of ecological economics (Costanza et al., 1997). The operationalization of human outcomes in terms of wellbeing reflected the influence of then recent developments in the measurement of subjective wellbeing (e.g., Diener & Seligman, 2006; Layard, 2005), the concept of human scale development (Max-Neef, 2005) and needs theories (e.g. Gough, 2015). Since then, the term “wellbeing economy,” perhaps due to its positive framing (Fioramonti et al., 2022), has been successful in drawing attention to the failures of our current economic model and in driving a debate on how it needs to evolve or transform.
A wellbeing economy approach stands in contrast with most other economic approaches by placing human wellbeing as the ultimate goal of economic activity. It highlights evidence that, beyond a certain level of prosperity, continuing economic growth adds little to human wellbeing (Fioramonti et al., 2022). It calls for different understandings and approaches to the economy that promote flourishing lives for all, with a particular concern for tackling inequality (Wilkinson & Pickett, 2018). The wellbeing economy stresses the importance of environmental limits, following the ecological economics approach of seeing human activity as embedded within ecological systems (Daly, 1973). The combination of wellbeing goals and attention to environmental limits, leads to a nuanced analysis of the economy which allows one to contrast between sectors and activities which contribute to wellbeing with limited environmental resources (e.g. care work) and those which add little to aggregate wellbeing while consuming unsustainable amounts of resources (e.g. luxury goods).
One of the distinguishing elements of the wellbeing economy approach is its focus on the positive outcomes of transitioning away from the mainstream growth-oriented economic approach. When compared to similar post-growth approaches, the narrative of the wellbeing economy is more oriented towards highlighting and assessing the co-benefits of more sustainable production and consumption systems (Akenji et al., 2021; Costanza et al., 2020; Fioramonti et al., 2022). This positive narrative presents numerous opportunities for collective action and an effective implementation of wellbeing economy policies, including at the city level.
The concept of the wellbeing economy is championed by an ever-growing coalition of actors, from specialized think tanks and consultancies such as ZOE in Germany (ZOE, n.d.) and the Centre for Thriving Places in the UK (Zeidler et al., 2021), to international networks such as the Club of Rome, the Doughnut Economics Action Lab, and Wellbeing Economy Alliance, and recently more established organizations such as WWF and the European Policy Centre, that are part of the Wellbeing Economy Coalition.1 The OECD and the Council of the European Union also talk about an economy of wellbeing, albeit with slightly different emphasis.2
Perhaps the most high-profile uptake of the wellbeing economy concept is the Wellbeing Economy Governments partnership, which currently comprises six national governments: Scotland, New Zealand, Iceland, Wales, Finland, and Canada. New Zealand’s Wellbeing Budget assesses new policies based on their impact on wellbeing and sustainability.3 Meanwhile, shortly after taking power in Scotland, First Minister Humza Yousaf announced, “Our key priorities will include eradicating child poverty and delivering a wellbeing economy” (Yousaf, 2023).
Applying wellbeing economy principles at the city level has great potential. More than half of the world’s population live in urban areas, and this proportion is expected to rise to two thirds by 2050.4 While some frame this trend as problematic (e.g., Venditti, 2022), it can be seen as an opportunity. High population density, including housing with less living space per capita and reduced transport needs, are associated with lower CO₂ emissions (Muñoz et al., 2020; Ottelin et al., 2019), at least in higher income countries. On the other hand, residents of large cities also tend to report lower subjective wellbeing (Okulicz-Kozaryn & Valente, 2021; Sørensen, 2021).
Politically, working at the city level (as opposed to the national level) affords many opportunities. Cities are often pioneers in novel policymaking. Shorter corridors of power and concentrated political preferences provide greater opportunities for the collaborative holistic work characteristic of the wellbeing economy (Bulkeley & Castán Broto, 2013; Diller, 2013). As a result, several towns and cities such as Amsterdam, London, and Vancouver, and small regions such as Sikkim in India, have begun to apply wellbeing economics ideas.5
There are naturally also limitations to working at the city level. City administrations have limited policy setting and taxation powers, and have to respond to and fit within the wider national and international economic context. Changes in policy at national level mean that cities often need to be creative and flexible to maintain the coherent and long-term implementation of their strategies.
Rather than specifying concrete policies, the wellbeing economy approach is often presented as a process, involving stages such as developing a vision, creating a strategy and evaluation (Wellbeing Economy Alliance, 2021). Rather than reproduce this process here, we identify a set of six ‘ways of working’ which underpin the wellbeing economy approach, often running through the entire process. These include being vision-led, measuring what matters, collaboration, citizen participation, prevention and asset-based approaches, and creative experimentation.
A wellbeing economy approach starts with a vision. The vision is not always framed in terms of wellbeing per se; and other approaches such as Doughnut Economics (Raworth, 2017) and buen vivir (Walsh, 2010) have many similarities. Whatever the framing, the vision makes it clear that policy should be outcome-oriented and provides a description of “what good looks like” which a multitude of local actors can sign up to. The vision places the wellbeing of people and the planet at the heart of policy, and charges most traditional policy areas (e.g., economic development, health, waste management, social integration, education, etc.) with the task of serving those goals.
An appealing vision can also mobilize support from citizens and businesses, shifting the wider public debate on how to understand progress within a locality. As in the case of Utah (Wellbeing Economy Alliance, 2021), a positive inclusive vision can help win over support from segments of the community that may otherwise be suspicious of progressive policies.
Several cities and towns have developed explicit visions which are consistent with the wellbeing economy, including Amsterdam’s Doughnut, Santa Monica’s Wellbeing Project, and the North of the Tyne Region’s Wellbeing Framework.6 These visions often emerge from a co-productive process involving local government, external wellbeing economy pioneers and other partners. For example, in the North of Tyne, 2,000 residents were consulted to develop a vision that is built around the SEED model (social, economic, environmental and democratic wellbeing).
Policymakers should:
Start any wellbeing policy process with a meaningful, participatory visioning exercise that involves citizens, paying particular attention to the needs of marginalized communities; and
Ensure the wellbeing vision is presented as a long-term project that spans political administrations (Wellbeing Economy Alliance, 2021).
The initial impetus for the wellbeing economy came from researchers and statisticians who rejected the use of GDP and other measures of total economic activity as proxies for progress. Rethinking how to measure progress follows on well from defining a vision and helps concretize otherwise vague aims. Measurement serves multiple purposes. It helps identify areas of challenge, but also areas of strength. It signals intent (Barrington-Leigh, 2021) and concretizes the city’s vision. It can be used to evaluate policies and interventions (e.g., Bagnall et al., 2023), and serves as an accountability tool with which citizens can assess the city’s progress towards its stated goals.
The starting point for measurement varies depending on the context. In many European countries, there is already a wealth of consistent data for cities and towns across the nation, sometimes including representative surveys that can be used for assessing people’s perceptions and subjective wellbeing down to the city level. Although there are always still substantial data gaps, in these cases the main challenge is to make sense of the available data and bring it together into a coherent framework that can inform a wellbeing economy vision. In other contexts, consistent national datasets are lacking, and therefore cities have had to collect their own data.
Cities have a couple of important choices to make when deciding on a measurement framework. Large datasets and dashboards (such as the UN SDGs indicators) provide policymakers and stakeholders with rich information with which to inform decisions. However, it is hard to use them to provide an overall sense of direction useful for informing citizens and indeed politicians. Because of that, many measurement frameworks are designed so as to allow the calculation of an overall index (e.g., the Genuine Progress Indicator for Baltimore, Talberth & Weisdorf, 2017). But these apparently simple indices often disguise a lot of complexity (Bleys & Whitby, 2015; Saltelli, 2007).
Reviews of alternative indicator frameworks conclude that ultimately there are three key domains for measurement: wellbeing, sustainability, and inequality or fairness (Hoekstra, n.d.; Zeidler, 2023). Given that they are non-substitutable (i.e., increasing wellbeing does not make up for increasing environmental impact) and do not automatically go hand in hand, it makes sense for measurement frameworks to treat these domains as distinct.
Another key decision is whether to use an existing framework or develop a bespoke one. Various organizations have proposed frameworks that are broadly consistent with the wellbeing economy approach, and are applicable at the sub-national level, such as the Doughnut or SEED Models. In some cases, for example the Thriving Places Index, data to implement the framework has already been gathered for several years (Zeidler et al., 2021). While there are variations between the precise indicators included, there is broad overlap in the domains that are generally reflected in these models (Zeidler, 2023).
Adopting an existing framework can be an efficient solution for cities, allowing them to build on global expertise. It also makes it easier for cities to learn from one another and to benchmark against one another. On the other hand, bespoke approaches may better reflect local specificities (seen in London’s developing approach7). Furthermore, as the following two ways of working will argue, collaboratively produced frameworks bring with them greater legitimacy and local support.
Policymakers should:
Consider existing frameworks but adapt and develop them to reflect local specificities and priorities; and
Address the trade-off between the complexity of large indicator sets, and the apparent simplicity of single indicators.
A central thread to the wellbeing economy approach, running through all stages, from visioning to measurement to policy development, is collaboration. Government departments, local and national, often work on very separate agendas, to different and at times conflicting goals, and using different language to set out their priorities and track progress. The wellbeing economy provides a common narrative and set of goals that can be shared across actors within and beyond government, including the voluntary and private sectors, allowing them to understand each other’s areas of policy and interest, and identify conflicts and synergies.
A wellbeing economy approach enables a discussion about how to pool and prioritize resources and energy in a place, on a shared positive vision—rather than seeking agreement across partners about whose need is greatest, or which problems in a place are the worst.
Especially when it stretches beyond government, a collaborative approach enables better identification and prioritization of local needs and resources. Community groups in particular bring unique knowledge, skills, and resources that can be harnessed towards building a wellbeing economy. Furthermore, collaboration has its own direct benefits, fostering trust, mutual respect, and further partnerships between different stakeholders. Amsterdam’s Doughnut Coalition comprises 40 organizations including community groups, commons-based organizations, SMEs, businesses, academia, and local government.8
The cross-silo nature of the wellbeing economy means that champions have often been place-based networks and partnerships. Initial steps to embedding the approach in government often include the establishment of cross-cutting offices or positions, such as the Commissioner for Future Generations in Wales (Davies, 2017).
It is critical when designing collaboration mechanisms to be mindful of the path-dependent power structures which allocate de facto greater influence and leverage to actors who have historically held resources, funding, potential to attract investment, and disposable capital. Related to this, it is critical to reflect not only on the opportunities for alignment and shared vision, but also an honest appraisal of where there may be trade-offs and conflicts of interest between stakeholders. A policy that might improve the wellbeing of one demographic group, may have negative effects on another group. The development of shared commitments and visions at place-based level is important in establishing a trust basis on which such trade-offs can be honestly appraised and accepted.
Policymakers should:
Engage a broad range of government departments and institutions in the creation of a wellbeing vision and ongoing policy design process;
Facilitate multi-stakeholder and community discussions to identify the respective roles of government, households, private sector and civil society in driving change; and
Centre relationships and trust from the outset of the process, which embodies wellbeing economy values and also helps to legitimize the work.
Besides collaboration between policy actors and voluntary organizations, the wellbeing economy approach also emphasizes the need for citizen participation. This goes beyond the kinds of community engagement discussed earlier, in that it attempts to engage citizens who are not necessarily involved in community groups, often with a view to reaching a more representative cross-section of society. Active and meaningful participation is critical for the creation of a legitimate shared vision that reflects residents’ interests and their priorities for wellbeing (Jany-Catrice & Marlier, 2013). Like inter-partner collaboration, the benefits of citizen participation are related to both the outcomes and the process. In terms of outcomes, it leads to better decisions, informed by citizen experience (Webb et al., 2023) and guided by shared goals. In terms of process, it creates a sense of ownership and shared accountability for change, while building trust (both trust towards policy actors, and trust between community groups).
Participation can range from small-scale discussion groups with citizens to large-scale citizen assemblies.
Participation is particularly important when beginning the journey towards a wellbeing economy, shaping the vision and the measurement framework. The London Prosperity Index was developed through an in-depth deliberative process with communities in east London to define the things that matter most to their prosperity and quality of life (Woodcraft & Anderson, 2019). At the regional level, Wallonie in Belgium organized large-scale deliberative meetings to shape its wellbeing index.9 In Jacksonville, Florida, community-led data collection by the Jacksonville Community Council (JCCI) allowed residents to identify particular areas of concern and address them (Swain & Hollar, 2003). According to the JCCI, this data collection led to policy changes and measurable benefits in the community, for example a reduction in infant mortality (Hák et al., 2012).
Citizen participation is also valuable in the development and prioritization of policies. Participatory budgeting, whereby citizens play a role in the allocation of a portion of the local budget, emerged in Brazil in the 1990s and has now been adopted in cities across the globe (Wampler et al., 2021). Participatory budgeting complements the wellbeing economy approach, giving citizens agency in setting priorities for the wellbeing economy and creating solutions to achieve them. Other examples of citizen involvement in decision-making include Barcelona’s Decidim online platform, and La Paz’s Neighbourhood Committees.10
Participation experts warn that citizen engagement can be dominated by privileged groups (Stapper & Duyvendak, 2020). Marginalized and seldom-heard groups sometimes do not participate in such processes, either because they are not aware of them, because they feel excluded from them, or because they lack the resources to participate in them. Cities therefore need to take active steps to ensure that these barriers are overcome. For example, in the case of the London Prosperity Index, citizen scientists were recruited from the local communities involved to conduct interviews (Woodcraft & Anderson, 2019).
Policymakers should:
Recognize that there is no one-size-fits all solution; economic policies should be embedded in local values, culture, context and objectives, which can only be properly understood through participatory processes.
Commit to policy making through open, co-creative and transparent processes where diverse communities are able to meaningfully engage and contribute throughout (Wellbeing Economy Alliance, 2021).
The wellbeing economy rejects short-termism in terms of its approach to the environment, but also in terms of the use of public resources. It favours a “salutogenic” approach to society, whereby policymakers identify and support factors that are good for wellbeing, rather than just focusing on those that are bad for it. Preventative approaches to social problems such as crime or mental health have been demonstrated to be significantly more cost-effective in the long run (Aked et al., 2009; Williams et al., 2014): critical in an age of limited resources. For example, parenting interventions such as the Incredible Years programme can lead to long-term benefits such as reducing anti-social behaviour (Sampaio et al., 2022).
The wellbeing economy seeks to improve wellbeing across the board, rather than focus only on those in acute need. This shifts the conversation away from a focus on solutions to downstream problems (How do we fix this specific problem for this specific group, and is this specific problem more important than another specific problem or another specific group?) and into a more holistic upstream, system-focused mindset (How do we make sure everyone has equal access to a high level of wellbeing?). It also calls for an understanding and appreciation of communities’ assets, rather than focusing entirely on their deficits.
One approach to this is Timebanking, which is a system of organized volunteering whereby residents receive time credits for volunteering which they can then spend to receive benefits in return (Boyle, 2014). For example, a person may volunteer by helping children with after-school classes, and then use the credits to receive help with DIY repairs. Timebanking often leads to better shared use of local assets and greater solidarity within a community.
Policymakers should:
Recognize the strengths of communities, focusing on achieving the positive aspirations of society rather than purely mitigating negative outcomes; and
Invest in the long-term, thereby preventing future costly problems, which may often necessitate a demonstration of long-term cost-saving benefits (Aked et al., 2009).
The challenges cities face in the twenty-first century (climate mitigation and adaptation, increasing global interconnectedness, rising inequality) are new, as is the wellbeing economy approach which has been put forward to address these challenges. That means that creativity and experimentation are necessary. Mistakes are inevitable. The key to this principle is to ensure that actors can learn from these mistakes and adapt approaches accordingly. This requires piloting, sandboxing (BMWK, 2022), robust feedback loops (with honest and rigorous evaluation), and regular deliberation and discussion.
Policymakers should:
Encourage the use of personal stories, music, images and narratives in wellbeing visioning work;
Establish processes that encourage continuous learning and experimentation to find innovative solutions that foster wellbeing (Wellbeing Economy Alliance, 2021); and
Promote a culture of innovation that makes colleagues feel safe to experiment and learn.
The wellbeing economy suggests a promising solution to the multiple challenges the world faces. In this article, we identify six ways of working which underpin the approach and provide tangible examples of how they are already being put into practices in communities around the world (see Figure 1).
Although we have cited examples in relation to specific ways of working, the best examples are those that combine several ways of working—for example using collaboration and citizen participation to create a clear vision and then a measurement framework. Furthermore, the wellbeing economy will only make a difference to people’s lives when it moves beyond conversations and ideas, and into actual day-to-day policy. The Wellbeing Economy Alliance and C40 both have useful libraries of case studies and ideas,11 while Aked et al. (2010) explores the application of wellbeing ideas to local policy in more detail. In many cases, policies seek to achieve “double dividends” (Jackson, 2005), improving social outcomes and reducing environmental impact at the same time.
We do not wish to pretend that cities and towns can achieve the transition to a wellbeing economy alone. Economists and political scientists have warned that our current economic system is growth-dependent, and that new economic systems are needed if we are to truly transform into a post-growth system (Hayden & Dasilva, 2022; Jackson, 2020). Such transformation is, at the least, a national level process, and even countries that have claimed to strive towards being wellbeing economies—with new indicators and visions—are hesitant to tamper with their fundamental economic systems (Mason & Büchs, 2023). Nevertheless, cities and towns can support that transition of the economic system (for example by supporting alternative business models) and demonstrate the opportunities it creates, both economically and politically.
Lastly, it is important to note the risk of “wellbeing washing” (Lucking, n.d.), whereby institutions integrate the word wellbeing into their communications without genuinely transforming policy. Innovations at all levels of policy design and implementation are contributing to a clearer definition at rapid pace.
1. https://weall.org/eu-wellbeing-economy-coalition-vision-statement
2. Official Journal of the European Union, 2019/C 400/09, 26th Nov 2019
3. https://www.treasury.govt.nz/publications/wellbeing-budget/wellbeing-budget-2019
4. https://www.worldbank.org/en/topic/urbandevelopment/overview
5. See https://www.c40knowledgehub.org/s/article/Amsterdam-s-City-Doughnut-as-a-tool-for-meeting-circular-ambitions-following-COVID-19, https://londonprosperityboard.org/, https://vancouvereconomic.com/research/beyond-gdp/, and http://www.business-standard.com/article/pti-stories/sikkim-preparing-legislation-for-implementation-of-sdgs-117032701006_1.html
6. https://www.c40knowledgehub.org/s/article/Amsterdam-s-City-Doughnut-as-a-tool-for-meeting-circular-ambitions-following-COVID-19?language=en_US, https://weall.org/resource/santa-monica-california-wellbeing-index, and https://www.northoftyne-ca.gov.uk/projects/roundtable-on-wellbeing/
7. https://data.london.gov.uk/dataset/draft-london-wellbeing-and-sustainability-measure
9. https://icpib.iweps.be/indicateurs-compl%C3%A9mentaires-pib-methodologies.php
10. https://weall.org/resource/barcelona-spain-using-technology-for-wellbeing-economy-policy-design and https://weall.org/resource/la-paz-bolivia-neighbourhoods-of-the-truth
11. https://www.c40knowledgehub.org/ and https://weall.org/case-studies
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