The Doughnut, or Doughnut Economics, is a diagram used to show how to develop in a way that is both fair and safe for the planet. It looks like a doughnut or a lifebelt, with a hole in the center. The hole represents people who do not have access to basic needs like healthcare, education, and fairness. The outer part of the diagram shows the limits the Earth can handle, such as pollution and resource use, which must not be exceeded. The idea was created by economist Kate Raworth in her 2012 Oxfam paper titled A Safe and Just Space for Humanity. She explained it further in her 2017 book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist and other writings.

Conceptual framework

The model was created to measure how well an economy meets people's needs without going beyond Earth's natural limits. Its main purpose is to change how we think about economic problems and set new goals. This model is sometimes called a "wake-up call" to rethink the current way of thinking about capitalism. In this model, an economy is seen as successful when all twelve basic needs for people are met without exceeding any of the nine natural limits. This area between the two boundaries is called a "safe and just space" for all humans.

Kate Raworth pointed out that the idea of planetary boundaries does not consider human well-being (even though if Earth's ecosystem collapses, all well-being is lost). She suggested combining social needs, like jobs, education, food, clean water, health care, and energy, with the planetary boundaries concept. This combination creates a space that is both environmentally safe and fair, allowing for the elimination of poverty and the protection of everyone's rights. Within the limits of Earth's resources and a fair social system lies a doughnut-shaped area, which represents a "safe and just space" where people can live well.

Indicators

The social foundations are based on the social goals of the United Nations' Sustainable Development Goals. These include:

• Food security
• Health
• Education
• Income and work (this includes both paid work and tasks like housekeeping)
• Peace and justice
• Political voice
• Social equity
• Gender equality
• Housing
• Networks (this includes community connections and systems like the internet)
• Energy
• Water

The nine ecological ceilings come from the planetary boundaries proposed by a group of Earth-system scientists led by Johan Rockström and Will Steffen. These include:

• Climate change — emissions from human activities, such as carbon dioxide and methane, trap heat in the atmosphere and change Earth's climate.
• Ocean acidification — when carbon dioxide from human activities enters the ocean, it makes the water more acidic. This weakens the ability of ocean life to build skeletons and shells.
• Chemical pollution — releasing harmful substances into nature harms biodiversity and reduces the health of animals, including humans.
• Nitrogen and phosphorus loading — using too much fertilizer causes it to run into water, leading to harmful algae growth that harms underwater life.
• Freshwater withdrawals — using too much freshwater can dry up water sources, harming ecosystems and making water unusable later.
• Land conversion — changing land for human use, such as building roads or farmland, harms wildlife habitats, removes carbon storage areas, and disrupts natural processes.
• Biodiversity loss — human activities can reduce the number and variety of species. This weakens ecosystems and reduces their ability to support life and provide natural services.
• Air pollution — tiny particles released into the air harm the health of living things and can change weather patterns.
• Ozone layer depletion — certain human activities release gases that damage the Earth's ozone layer. This layer protects life from harmful radiation, and its damage can lead to health issues like skin cancer in animals.

Critique to mainstream economic theory

The doughnut model is a set of goals that can be achieved through various actions by different people or groups. It does not include specific models about how markets work or how people behave. The book Doughnut Economics presents critiques and ideas about what society as a whole should aim for. These critiques focus on certain economic models and the common ideas they are based on.

Mainstream economic models from the 20th century, which are most commonly taught in introductory economics courses worldwide, are called neoclassical models. Examples include the Circular Flow diagram created by Paul Samuelson in 1944 and the supply and demand curves developed by William S. Jevons in 1862. These models focus on visible money movements within a specific area and describe preferences using math. However, they do not consider the larger environments where these activities occur, such as human thoughts, society, culture, or the natural world. This was acceptable when human populations did not overwhelm Earth’s systems, which is no longer true. Additionally, these models were created before advanced statistical testing was possible. They relied on assumptions about human behavior, which were turned into simplified ideas called "stylized facts." These assumptions came from philosophical and practical ideas, reducing complex thoughts, like those of Adam Smith, into simple curves on graphs to predict behaviors, such as consumer choices.

Over time, neoclassical economic theory became more complex and competed with other theories for influence in the North Atlantic region. In the 1930s, Keynesian theory was dominant, and after the 1960s, monetarism became more prominent. Despite these changes, one idea remained: the concept of the "rational economic man" used as a foundation for these theories. Kate Raworth, the creator of Doughnut Economics, criticizes this idea as misleading because it shapes learners’ beliefs about human behavior and, in turn, affects their real-world actions. Examples of this influence have been recorded, along with the effects of declining trust and community on human well-being.

Real-world economies in the Doughnut perspective

Kate Raworth explains that the doughnut economy is based on the idea that "Humanity's 21st century challenge is to meet the needs of all within the means of the planet. In other words, to ensure that no one lacks life's essentials (such as food, housing, healthcare, and political voice), while making sure that people as a group do not use more of Earth's resources than the planet can support. These resources include a stable climate, fertile soil, and a protective ozone layer. The Doughnut of social and planetary boundaries is a new way to think about this challenge, and it helps guide human progress this century."

Raworth says that "a lot of economic growth is needed" for low- and middle-income countries to meet the basic needs of their citizens.

Using studies about Earth and economics, Raworth shows where the world is falling short or using too many resources, as seen in Figure 2.

The Doughnut framework has been used to examine how well communities balance social and environmental needs in places like Erhai Lake catchment (China), Scotland, Wales, the UK, South Africa, the Netherlands, India, and many other areas around the world.

In April 2020, Kate Raworth was asked to help the City of Amsterdam plan its economy after the pandemic.

A study using the doughnut model in 2018 found that across 150 countries, no country has yet met its citizens' basic needs while keeping resource use at a globally sustainable level.

Criticism

Welfare economist Erik Schokkaert says that Raworth raises important questions about improving development, but she does not explain which measure of well-being should replace GDP or how to ensure fair material use for everyone while protecting the environment. He believes her criticism is based on a simplified version of mainstream economics, which makes her argument less strong. While there are debates about ideas like methodological individualism, she does not discuss these in her work. Schokkaert also points out that modern economics now uses more real-world evidence and studies how people behave in markets that are not always perfect. His main worry is that Raworth’s ideas mix facts with what should be done, using beliefs and hopes instead of solid research. He suggests working with economists who agree that markets should be part of society, consider resource limits and unfair power, and recognize that people are motivated by more than just personal gain—ideas already found in mainstream economics.

Branko Milanović, from CUNY’s Stone Center on Socio-Economic Inequality, says the doughnut model ignores the fact that if everyone reached the income level of people in rich countries, global GDP would need to triple—a point Raworth does not mention. He also notes that while the book lists many “green” ideas, it does not evaluate how effective they are, which he says is not enough. Raworth admits that economic growth can help reduce conflicts, support democracy, and improve well-being, but she does not clearly explain how a system without growth could work or solve these challenges. Milanović says this would require people to stop caring about wealth and status, which he finds unlikely. He concludes that the doughnut model depends on unlikely events, while ignoring the real success of China’s growth, which lifted 700 million people out of poverty.

Maria Zhivitskaya, from the London School of Economics, says the doughnut model has potential and uses creative ideas, but she is not convinced it can lead to real change. She argues that Raworth’s rejection of the idea that people act purely out of self-interest is based on weak reasoning. She points out that using Daniel Kahneman’s research on how people make decisions to criticize economics unfairly ignores that Kahneman himself won a Nobel Prize in Economics. Zhivitskaya also says that while Raworth’s metaphors are attractive, they do not help create clear policies. She believes complex issues, like combining environmental and economic goals, are not fully addressed by Raworth’s approach.