This report analyses international wellbeing-focused budget practice to provide a basis for guiding government fiscal practice. Written by Dr Cressida Gaukroger, this report focuses on wellbeing-aligned steps that national, state and regional governments have taken to build budget and fiscal structures and practices.
Governments and societies across the globe are increasingly recognising the importance of improving the wellbeing of their citizens and making this the central goal of their economic and policy ambitions. At Carnegie UK, we believe that putting wellbeing approaches at the heart of decision making can focus public policy on ensuring everyone has what they need to live well now, and into the future. However, we also know that turning this ambition into reality is not straightforward.
This report was commissioned because systemic and tangible changes to how governments raise and allocate their financial resources remain limited, despite significant domestic and international progress in developing frameworks and measures for wellbeing policy aims. There is a pressing need for practical and actionable guidance to support governments in this respect. We identified a critical gap: how can fiscal policy – through revenue raising, spending, and budgetary processes – be reimagined to prioritise and deliver improved wellbeing for people?
This paper examines global examples from places including New Zealand, Australia and South Korea; innovative tools; and emerging practices that have the potential to transform public spending from an all too often reactive, short-term and siloed exercise into a lever for the pursuit of long-term wellbeing.
Taking a wellbeing approach to budget processes cannot be achieved by one-off changes: multiple, coordinated reforms are needed.
A key opportunity for changing practice in line with fiscal responsibility is moving to a real-cost accounting model that factors in both the upfront costs of policies and the fiscal effects they create through increasing or reducing demand for acute government services.
Reforming the existing features of the system can have a greater impact than just adopting new analytical tools or measures.
Any changes must be effectively resourced and well designed to include considerations such as how processes will directly influence decision-making, how they connect to departmental and civil servant incentives, and how easy they are to use.
Dr Cressida Gaukroger is an independent writer, philosopher, and policy researcher working on wellbeing economics and government systems change. She works with governments at all levels internationally to put sustainably. From 2022-2025 Cressida was the Lead of the Wellbeing Government Initiative at the Centre for Policy Development (CPD), an independent Australian think-tank.
Cressida has a PhD in philosophy, and has taught at Oxford, University College London and New York University.
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