The Doughnut, or Doughnut Economics, is a diagram used to show how to develop in a way that protects both the planet and people. It looks like a doughnut or a lifebelt, with a hole in the center. The hole represents the number of people who do not have access to basic needs like healthcare, education, and fairness. The outer part of the diagram, called the crust, 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 from the University of Oxford in her 2012 Oxfam paper 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 another paper.

Conceptual framework

The framework was created to measure how well an economy meets people's needs without exceeding Earth's ecological limits. The main purpose of this new model is to change how economic challenges are viewed and to set new goals. In this model, an economy is seen as successful when all twelve social needs are met without exceeding any of the nine ecological limits. This area, between two boundaries, is described as a safe and fair space for humans to live.

Kate Raworth pointed out that the planetary boundaries concept does not consider human wellbeing (though, if Earth's ecosystem fails, all wellbeing becomes irrelevant). She proposed combining social needs with the planetary boundaries idea. Including factors like jobs, education, food, clean water, healthcare, and energy creates a space that protects the environment while helping to end poverty and ensure rights for everyone. Within Earth's limits and with fair social conditions, there is a doughnut-shaped area that represents a safe and fair place for humans to live and grow.

Indicators

The social foundations are based on the goals set by the United Nations for improving life on Earth. These goals include:

• Ensuring enough food for everyone
• Promoting good health
• Providing access to education
• Supporting income and work (including unpaid tasks like housekeeping)
• Encouraging peace and fairness in society
• Allowing people to have a say in government decisions
• Ensuring fair treatment for everyone
• Achieving equality between men and women
• Providing safe and stable homes
• Connecting people through communities and information systems like the internet
• Ensuring access to energy
• Guaranteeing clean and available water

The nine ecological limits are based on scientific research by a group of scientists led by Johan Rockström and Will Steffen. These limits include:

• Climate change — human activities release gases like carbon dioxide and methane, which trap heat in the atmosphere and change Earth’s climate.
• Ocean acidification — carbon dioxide from human activities dissolves into oceans, making water more acidic and harming marine life’s ability to build shells and skeletons.
• Chemical pollution — toxic substances released into nature harm biodiversity and reduce the health of animals, including humans.
• Nitrogen and phosphorus overuse — too much fertilizer in water causes algae growth, which harms underwater life.
• Overuse of freshwater — using too much water can dry up sources, harming ecosystems and making water unavailable.
• Land conversion — changing land for activities like farming or building roads harms wildlife habitats, removes natural carbon storage areas, and disrupts natural processes.
• Loss of biodiversity — human activities can reduce the number and variety of species, making ecosystems weaker and less able to support life.
• Air pollution — tiny particles released into the air harm the health of living things and can affect weather patterns.
• Ozone layer depletion — certain human activities release gases that damage Earth’s ozone layer, which protects life from harmful radiation. This can increase the risk of diseases like skin cancer in animals.

Critique to mainstream economic theory

The doughnut model is a set of goals that different people and groups can work toward in various ways. It does not include specific ideas about how markets or human behavior work. 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 their shared foundations.

The main economic models taught in schools today are called neoclassical. 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 how money moves within a specific area and use math to describe people's preferences. However, they do not consider the larger contexts in which these activities happen, such as human thoughts, culture, society, or the natural environment. This was acceptable when human populations did not heavily impact Earth's systems, but that is no longer true. These models were also created before modern 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 graphs to help predict actions like consumer choices.

Over time, neoclassical economic theory became more complex and competed with other theories for the main economic ideas in the North Atlantic region. In the 1930s, Keynesian theory was dominant, and after the 1960s, monetarism became more popular. One consistent feature across these theories was the idea of the "rational economic man," a simplified image of human behavior used to build economic models. The creator of Doughnut Economics, Kate Raworth, criticizes this concept as misleading, because it shapes how people understand behavior and can influence 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." This means ensuring that everyone has access to life's essentials, such as food, housing, healthcare, and the right to be heard politically. At the same time, it is important to avoid using Earth's life-supporting systems, like a stable climate, fertile soil, and a protective ozone layer, in ways that harm the planet. The doughnut model shows the balance between meeting human needs and protecting Earth's resources. It serves as a guide for how people can progress in a way that is fair and sustainable.

Raworth explains that significant economic growth is needed in low- and middle-income countries to help their citizens achieve the basic needs outlined in the social foundation.

Using research from Earth and economics, Raworth shows where current efforts fall short or go beyond limits, as seen in Figure 2.

The doughnut framework has been used to study how well different areas handle social and environmental issues in places like Erhai Lake in China, Scotland, Wales, the UK, South Africa, the Netherlands, India, and many other regions around the world.

In April 2020, Kate Raworth was asked to join the City of Amsterdam's planning for economic recovery after the pandemic.

A real-world test of the doughnut model in 2018 found that across 150 countries, no country has yet managed to meet its citizens' basic needs while keeping resource use at a level that is sustainable for the planet.

Criticism

Welfare economist Erik Schokkaert points out that Raworth highlights important problems with current development paths but does not explain specific solutions, such as which measure of well-being should replace GDP or how to ensure fair resource use for all while protecting the environment. He says her criticism focuses on an oversimplified version of mainstream economics, which is a misrepresentation. While there are debates about ideas like methodological individualism, these topics are not discussed in her work. Schokkaert also notes that modern economics has moved away from simple assumptions and now uses more real-world data to study how people behave in markets influenced by factors beyond money. His main concern is that Raworth’s approach mixes facts with value-based ideas, with policy suggestions based more on beliefs than on solid evidence. Instead of opposing mainstream economics, he suggests working with economists who agree that markets should be connected to society, consider resource limits and inequality, and recognize that people are motivated by more than self-interest and make decisions with limited understanding—ideas already part of mainstream economics.

Branko Milanović of CUNY’s Stone Center on Socio-Economic Inequality criticizes the doughnut model for not considering that if everyone reached the median income of wealthy countries, global GDP would need to triple—a point Raworth does not address. He also mentions that while the book lists many "green" initiatives, it does not evaluate their real-world impact, which is small compared to what is needed. Raworth admits that economic growth helps reduce inequality, support democracy, and improve well-being, but she does not clearly explain how a system without growth could work or address these challenges. This would require people to suddenly stop caring about wealth and status, which Milanović calls unrealistic. He concludes that the doughnut model depends on unlikely outcomes while ignoring the success of China’s economic growth, which lifted 700 million people out of poverty.

Maria Zhivitskaya of the London School of Economics acknowledges the doughnut model’s potential to combine ideas from different fields and its use of vivid metaphors but doubts its ability to drive real change. She argues that Raworth’s rejection of the idea that people act purely based on self-interest is not strongly supported, noting that using Daniel Kahneman’s research on decision-making to criticize economics is unfair, as Kahneman himself won a Nobel Prize in Economics. Zhivitskaya adds that while Raworth’s metaphors are attractive, they do not help create clear policies. She also points out that complex issues, such as combining environmental and economic data, are not fully addressed in Raworth’s approach.