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Protective, preventative policymaking fit for the future

Well-being / COMMENTARY
Aileen McLeod , Laura Rayner

Date: 19/10/2023
The multitude and scale of crises the EU institutions have faced during this legislature have strenuously tested EU policymakers and policymaking processes. Evidence shows that embedding strategic foresight into policy design can help to predict and better prepare for future crises. But alongside prediction and preparation, the next mandate must move towards preventative policymaking and address the numerous policy trade-offs that have so far been quietly ignored.

The 2023 European Commission Strategic Foresight Report states: “Avoiding the disruption of critical natural systems, such as the water cycle, respecting planetary boundaries, and halting biodiversity loss, are essential preconditions for resilient societies and sustainable economies. As this interdependence between the economy and the environment becomes increasingly clear, it also becomes a matter of intergenerational fairness: adapting the economic model will be the foundation for the well-being and material wealth of future generations, including the way economic gains are distributed.”

Even at the start of this mandate, the von der Leyen Commission recognised that a growth at all costs economic model was out of date, out of touch with our planet, and no longer delivering economic, social and environmental sustainability. Indeed, far from delivering societal well-being, this model focused on maximising GDP growth is, instead, fundamentally undermining it in a way that leads to climate and environmental breakdown and has already pushed many societies worldwide into deepening inequality. Continuing with an approach that is hollowing out our resilience regarding climate, health, poverty, inequalities and social cohesion leaves society deeply vulnerable to further pandemics, crises and shocks.  

Prevention not patching up

Policymaking must urgently undertake a comprehensive shift. To move out of the current cycle of permacrisis, efforts must be directed towards preventing crises from arising in the first place. With more focus on upstream interventions that prioritise people’s fundamental needs, it is possible to avert economic, social and environmental harm before it occurs, enabling people to live better lives the first time around. This reduces the need for expensive downstream short-term sticking plaster interventions to patch up social inequalities and environmental damage. Currently, great effort is spent mitigating the consequences of external shocks – whether environmental, health, economic or societal – but too little is focused on preventing shocks from arising in the first place.

While challenging, there are countries where this approach is already integrated into policy design processes. For example, multiple cities have adopted Doughnut Economics to integrate systems thinking into their policymaking processes, recognising that the economy is embedded within and dependent upon society and the living world. Finland is implementing a well-being approach to guide policymaking. Meanwhile, in Wales, the Well-being of Future Generations Act ensures that public bodies take account of the long-term, prevent problems from occurring or getting worse, take an integrated and collaborative approach, and involve people of all ages and diversity. New Zealand’s budget considers policy impacts across different dimensions of well-being, as well as the long-term, intergenerational and distributional issues and implications of policy.

The well-being economy approach offers principles that can guide and improve EU policymaking. It encourages a comprehensive and systematic view of the impact of decisions, considering economic factors and the nexus between the economy, society and the environment. It also allows for better identification, assessment and explanation of policy trade-offs. Its holistic view, integrated policy design and long-term perspective help avoid short-sighted sticking plaster reactions with negative future consequences and instead support the identification of win-win solutions (e.g. when policies aimed at improving sustainability or reducing inequality may also have positive effects on health outcomes or social cohesion).

Tackling trade-offs

Beyond this, it also offers a further valuable benefit. This legislative mandate has seen ambitious policies pushed through but many hard choices shelved. However, the costs and sacrifices inherent in our ambition to achieve the green, digital and economic security transitions are already apparent and although few centrist politicians may wish to shine a spotlight on them, it does not follow that people are unaware of them. Silence on this front is being exploited by populists, offering soundbites and apparently easy solutions.

Addressing trade-offs will be the defining challenge of the next EU mandate. Questions whose answers will either undermine or underpin the EU’s strategic agenda remain unanswered but cannot be indefinitely ignored. For instance,

  • How can EU member states, especially those lacking fiscal space, make the investments necessary to support the transitions within the confines of European economic governance?
  • Do EU member states really want to make that investment if it increases government debt levels at a time of high interest rates, and in the wake of a period of high government spending?
  • How can national governments support industry without further undermining the integrity of the single market?
  • How can de-risking occur without damaging the environment?
  • How can the Common Agricultural Policy be reshaped to meet climate objectives without damaging our food security?
  • And how can such massive transformations be undertaken in a way that takes citizens with us? 

There now needs to be an honest and open discussion about the policy trade-offs and hard choices that will have to be made and how equitably the risks, costs, benefits and opportunities can be shared between all parts of society and generations. A pathway must be found that is honest, protective and clear on the extraordinary costs of inaction, which scientists are saying are existential for communities worldwide.

A clear mission statement

The well-being economy approach can provide an accessible, transparent method to identify, debate and respond to difficult trade-offs based on a clear set of agreed objectives. This clear set of agreed objectives must be built from the ground up: a visionary development plan for Europe with its agenda set by citizens based on what people want from politicians, what they value most and what economic model they believe would help them thrive. New Zealand’s Living Standards Framework and Scotland’s National Performance Framework offer examples.

Engagement with citizens has to be meaningful and participatory, inclusive and deliberative, embedding participatory and deliberative decision-making processes. Enhancing citizen participation can improve the resilience of our democratic institutions, bolster public trust and reduce support for populists.

Starting with such a framework provides a compass for policymakers but also delivers a tool to discuss and respond to trade-offs. Broadly agreed objectives provided through deliberative, participatory processes with citizens offer a clear mission statement and political legitimacy for the tough decisions ahead. Wales’s Roads Review is an example of this, where future investment in roads will only be undertaken to improve safety, support sustainable social and economic development, encourage active travel and decarbonisation and with priority given to public transport. The foundation of their Well-being of Future Generations Act has provided political cover for such courageous decisions and offers a pathway for policymakers through the contradictory messages that voters can deliver.

Economic growth is still presented as the answer to all the crises and challenges our society faces. However, our current course is growing us further and deeper into crises, as well as creating new ones. The well-being economy approach provides solutions to the complex questions we must now answer, whether as a tool for more anticipatory policymaking or as a clear mission statement to redesign the EU economy and society into a more protective and preventative one.

Laura Rayner is a Senior Policy Analyst in the Social Europe and Well-Being programme at the European Policy Centre.

Aileen McLeod is a Senior Adviser on the well-being economy at the European Policy Centre.

The support the European Policy Centre receives for its ongoing operations, or specifically for its publications, does not constitute an endorsement of their contents, which reflect the views of the authors only. Supporters and partners cannot be held responsible for any use that may be made of the information contained therein.

This Commentary is part of the Well-being Economy Policy Lab Project.

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