Economics

RESEARCH JUSTIFICATION

The global economic system is a complex network of micro and macro level structures, which impact everyone in society. Current growth-focused models, however, are increasingly strained. Gains have been uneven, often achieved at environmental cost, and climate-related damages are already slowing growth. Governments face fiscal pressures, conflicts, resource depletion, and rising displacement, while systemic risks such as debt, inequality, and trade tensions intensify. Without addressing these issues, the global financial system risks perpetuating inequality, environmental harm, and vulnerability to crises, leaving low- and middle-income countries disproportionately exposed to the cascading effects of global instability. 

Understanding these systems, their issues and potential alternatives is vital to understanding the impact of economics on society.

Examples of Sustainable Economic Alternatives

Doughnut Economics, developed by economist Kate Raworth (Kate Raworth, Doughnut Economics, 2017) offers a new non-growth-based alternative to traditional economic models. Raworth argues that conventional economics, with its fixation on endless GDP growth, fails to recognise the environmental systems that sustain life and the social foundations required for human wellbeing, driving inequality, ecological damage, and an unsustainable dependence on perpetual expansion. Instead, she calls for economies that are regenerative and distributive by design, enabling people and the planet to thrive within their natural limits.

The central “Doughnut” model defines the safe and just space in which humanity can prosper:  

The inner ring: The Social Foundation - represents the basic human needs that no one should fall below, such as access to food, water, energy, education, healthcare, and equality.  

The outer ring: The Ecological Ceiling - marks the environmental limits that must not be exceeded, protecting vital planetary systems such as the climate, oceans, and biodiversity.  

The “Doughnut”: The space between these two boundaries - is where social justice and ecological balance coexist, allowing humanity to prosper without breaching the planet’s life-supporting boundaries. 

To achieve this, Raworth proposes strategies that recognise the economy’s connection to the living world, circulate resources, and promote fairer distribution of wealth and power. Success is measured not by growth alone, but by enabling all people to live well within the planet’s ecological limits, adopting, adopting a mindset In essence, Doughnut Economics invites us to adopt a mindset that prioritises balance, sustainability and collective wellbeing. 

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The sustainable alternative

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The Proposed 'Doughnut' model

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The existing model

Kuznets environmental theory

Green Growth

Green growth seeks to foster economic growth and development while ensuring that natural resources and environmental services continue to support human well-being. The idea assumes that economic growth can be decoupled from carbon emissions and environmental degradation, forming the basis of much development, political, and climate modelling, including integrated assessment models (IAMs) used to plan climate responses. 

Critics of green growth, such as Jason Hickel and Giorgos Kallis (Jason Hickel & Giorgos Kallis, Is Green Growth Possible?, 2019) argue that this premise may be overly optimistic. They suggest that true sustainability is difficult on a planet with finite resources. While green growth recognises that economic activity has historically caused environmental harm, critics question whether growth and ecological protection can genuinely coexist. Hickel and Kallis note that economic expansion is largely driven by industries responsible for climate change, making the simultaneous pursuit of environmental restoration and financial growth potentially contradictory. From this perspective, ‘sustainable development’ can appear aspirational, if not inherently paradoxical, given the ecological limits of our planet. 

The three sustainable pillars

World Bank

The World Bank’s global economic strategy is rooted in the belief that economic growth, if properly managed, can be both sustainable and inclusive (World Bank, Economic Policy: Strategy, accessed 2025). Central to this approach is the idea that technological change and substitution can improve the ecological efficiency, and that governments can accelerate this process through targeted regulations and incentives. This reflects a strong faith in progress and a reliance on top-down, growth-focused solutions. 

Key priorities include:

Fiscal policy: Creating sustainable paths for revenues, expenditure, and deficits, managing fiscal risks, and improving public spending efficiency.

Domestic resource mobilisation: Strengthening tax systems to unlock resources that can support climate action, healthcare, and poverty reduction.

Debt management: Ensuring borrowing is transparent and sustainable, recognising debt as a vital tool for financing development goals when properly managed.

While the strategy emphasises growth and technological solutions, it illustrates the Bank’s continued reliance on traditional economic models, prioritising progress and efficiency as the primary drivers for solving global challenges.

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Exponential economic growth

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Economic circular flow