Growth dependence of welfare states: a semi-systematic review of drivers and policy responses

Milena Büchs, Tuuli Hirvilammi, Thomas Webb and Dario Leoni
The Lancet Planetary Health | September 2026

Summary

Critiques of economic growth are receiving increasing attention from both scientists and the public. The post-growth literature explores how wellbeing can be achieved for all while staying within planetary boundaries. However, current welfare states, which play a crucial role in supporting health and wellbeing, are often seen as dependent on economic growth. The factors driving this dependency, and the policy responses to it, remain insufficiently understood.

In this paper, the authors address this gap through a semi-systematic review of the literature, providing an overview of the main drivers of welfare state growth dependency, as well as corresponding policy responses that have been proposed.

The review identifies several key drivers highlighted in previous research, including the reliance of employment and welfare funding on economic expansion, rent extraction and for-profit provision, increasing inequality, ageing societies, the political power of vested interests, and environmental impacts.

Policies proposed in response to these drivers include maintaining employment without growth, using less growth-dependent sources of revenue, restricting rent-seeking and the political power of vested interests, implementing pre-distributive and redistributive policies, investing in preventive healthcare, and mitigating climate change.

The authors argue that a more holistic assessment of these policies should consider the interaction between the supply of welfare funding and the demand for welfare spending. Finally, the paper summarises perspectives in the literature on whether welfare states can become independent of economic growth within a capitalist system.

Further Reading