GDP Doesn’t Measure Wellbeing: Amsterdam Replaced It — and 100 Cities Followed

TL;DR: In 1934, economist Simon Kuznets warned: GDP does not measure wellbeing. Eighty-six years later, Amsterdam took that remark seriously. In April 2020, the city officially adopted doughnut economics — a 21-dimension framework developed by Kate Raworth — as its public policy compass. By 2024, more than 100 cities and organisations worldwide were applying it. The question is no longer “is this theoretically viable?” but “what does it actually produce?”

In April 2020, the streets of Amsterdam are empty. The Netherlands has been in lockdown for three weeks. Financial markets have fallen 30%. In this context, the City of Amsterdam does something unexpected: it adopts a new economic framework to guide its public policies.

Not an emergency measure. Not a recovery plan. A different compass — doughnut economics — developed by economist Kate Raworth and formalised in a report co-produced with the Doughnut Economics Action Lab (DEAL).

The timing is not incidental. A global health crisis had revealed, in the space of a few weeks, all the dimensions that GDP fails to capture: the fragility of food supply chains, the overwork of underpaid essential workers, the loneliness of elderly people, housing insecurity. Elected officials had decided to stop flying blind.

What GDP Measures — and What It Misses

In 1934, Simon Kuznets presented his first report on national income to the US Congress. He included a warning that would be largely ignored: “the welfare of a nation can scarcely be inferred from a measurement of national income.”

Kuznets was right. GDP adds things up. It adds the value of goods produced, services rendered, expenditure made — without distinguishing what improves life from what destroys it. A car accident raises GDP (repairs, hospitalisations, legal proceedings). Air pollution raises it (medical treatments, air purifiers). Deforestation raises it. A mother who stays home to care for her children — it does not.

This is not a bug. It is a feature: GDP was designed to measure market economic activity, not human wellbeing. The problem is that it was turned into the supreme indicator of a society’s health.

Doughnut economics asks a different question: is an economy healthy when its inhabitants have enough — without exceeding the planet’s limits?

The Geometry of a Ring

Kate Raworth’s model, formalised in Doughnut Economics (Chelsea Green Publishing, 2017), rests on two concentric boundaries.

The social foundation — the inner boundary — defines the 12 dimensions that every society must guarantee to its members: food, water, health, education, income, housing, energy, political voice, social equity, gender equality, peace, social networks. Below this boundary, people lack the essentials.

The ecological ceiling — the outer boundary — draws on the work of the Stockholm Resilience Centre (Rockström et al.): 9 biophysical limits that humanity should not cross without risking the destabilisation of the systems that make Earth habitable. Climate, biosphere integrity, the nitrogen and phosphorus cycles, land use, among others.

Between the two lies the safe and just space — the ring of the doughnut. Neither too little, nor too much. An economy that stays within this ring meets human needs without overloading natural systems.

By 2023, six of those nine planetary boundaries had already been crossed at the global scale, according to a major update from the SRC (Richardson et al., Science Advances, 2023): climate change, biosphere integrity, biogeochemical flows (nitrogen and phosphorus), land-system change, freshwater cycle change, and novel entities (synthetic pollutants, plastics, endocrine disruptors).

Amsterdam 2020: From Framework to Policy

The Amsterdam City Doughnut report, published in April 2020 in partnership with DEAL, does not merely describe theory. It applies it to a real city — and the diagnosis it produces is precise.

Of the 12 social dimensions, 6 prove insufficient in Amsterdam: affordable housing, income for precarious workers, mental health, access to care, gender equality in employment, food security for vulnerable households. Of the 9 planetary boundaries, 5 are exceeded at the local level — including greenhouse gas emissions and the material footprint linked to construction.

This diagnosis led the city to identify four priority areas: food (strengthening short supply chains, reducing waste), housing (halting land speculation, maintaining affordability), materials (circular economy for textiles and construction), income and work (supporting vulnerable workers, recognising unpaid care work).

The doughnut framework then shaped the city’s public procurement. Amsterdam integrated circularity criteria into its construction tenders: materials must be reusable or recyclable. This is not a symbolic commitment — it is a contractual condition for winning a municipal contract.

100 Cities, a Shared Tool

What happened in Amsterdam did not remain isolated. In 2024, the DEAL network counts more than 100 cities and organisations applying the doughnut framework to their local context.

Brussels, Edinburgh, Copenhagen, Portland (Oregon), Melbourne — each has developed its own community portrait, adapted to its territory. In Nanaimo, British Columbia, the city became the first in North America to integrate the doughnut framework into its official municipal strategic plan — not as an experimental pilot, but as a permanent governance instrument.

The central tool is the Prosperity Web, developed by DEAL: community portraits that visualise, for each city, where it stands in relation to the two boundaries. 21 dimensions — 12 social, 9 ecological — presented as a radar chart. Elected officials and citizens can see at a glance what is lacking, what is exceeding limits, and what trade-offs are possible.

Without waiting for an annual growth report.

The Limits: What the Doughnut Doesn’t Solve

Raworth’s model has its critics — and they deserve to be heard honestly.

The absence of a synthetic metric. GDP has a formidable strength: a single figure, comparable over time and between countries. The doughnut produces a 21-dimension profile — impossible to summarise in one index. For day-to-day political trade-offs, this richness can become a source of confusion or decision paralysis.

The risk of footprint externalisation. A country can improve its doughnut profile by relocating its polluting industries abroad. If consumption remains the same but production moves elsewhere, emissions disappear from the local balance sheet — without disappearing from the atmosphere. This limitation is real and requires imported-footprint accounting protocols that few cities have yet put in place.

Institutional resistance. Neoclassical economists — including William Nordhaus and Gregory Mankiw — contest the integration of planetary limits into economic policy, arguing that market price signals are more effective tools. Raworth responded to these criticisms in the Journal of Economic Literature (2018): prices cannot correctly signal non-linear tipping points such as the collapse of entire ecosystems. The debate remains open in academic literature.

The Real Revolution: Changing the Question

What makes doughnut economics powerful is not technical. It is philosophical.

For decades, the central question of economic policy has been: “how do we grow GDP?” A city evaluated its health by the growth of its market activity — even when that growth coexisted with rising inequality, worsening air quality, and a housing crisis.

The doughnut substitutes a different question: are our residents living well, without destroying the natural foundations that sustain them?

This reformulation is not abstract. In Amsterdam, it translated into criteria in public procurement. In Nanaimo, into a municipal strategic plan. In 100 other cities, into citizen debates around a 21-dimension radar.

The compass does not chart your route for you. But it changes the direction in which you look.

Sources

• Kate Raworth, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Chelsea Green Publishing, 2017. chelseagreen.com
• Stockholm Resilience Centre — Planetary Boundaries (Rockström et al.). stockholmresilience.org
• Richardson et al., “Earth beyond six of nine planetary boundaries”, Science Advances, 2023 — summary: stockholmresilience.org
• DEAL & City of Amsterdam — Amsterdam City Doughnut: A Tool for Thriving Cities, 2020. doughnuteconomics.org
• DEAL (Doughnut Economics Action Lab) — Cities network. doughnuteconomics.org/themes/cities-regions
• DEAL — Community Portrait Tool (Prosperity Web). doughnuteconomics.org/tools

See also: Doughnut economics: from academic idea to 50 cities in five years