Financing ‘sustainable welfare’: A critical review of the options

The literature on ‘sustainable welfare’ argues that meeting everyone's needs within planetary boundaries requires the financing of welfare to become independent from economic growth. However, it remains contested how this is possible given the mutual dependency between growth and welfare in current economies. Multiple sources of financing are proposed in the post-growth and ecological macroeconomics literatures but, so far, they have not been assessed against sustainable welfare criteria. To address this gap, this article conducts a systematic literature search to identify proposed options for financing welfare in a post-growth context. It then critically assesses these options against four sustainble welfare criteria: growth independence, redistribution, needs satisfaction and reduction of ecological harms. We find that while the proposed financing options perform differently against the latter three criteria, none of them, on their own, fully resolve the current growth dependency of welfare provision. However, this could be addressed by combining some of these options, extending the revenue base, balancing the supply of financing and demand for welfare, adopting preventative approaches to reduce ‘unnecessary’ welfare demand, and redistributing economic resources towards needs satisfaction. Overall, this will likely require a more fundamental reorganisation of the economy.