Economic Resilience and Human Flourishing: Cross-National Evidence
New evidence on how economic resilience — the capacity to absorb and recover from shocks — shapes long-run human flourishing.
Reframing Resilience in Economic Policy
Traditional economic resilience frameworks focus on GDP recovery speed following recessions. The WISE Horizons approach broadens this lens to examine resilience across all three wellbeing domains: does a shock-recovery trajectory maintain or improve inclusion outcomes? Does it preserve or degrade ecological sustainability?
Drawing on panel data spanning the 2008 financial crisis, the COVID-19 pandemic and the 2022 energy crisis, the analysis identifies structural characteristics associated with broadly resilient economies — those that bounce back across all three dimensions rather than trading off one domain against another.
What Makes an Economy Broadly Resilient?
Five structural factors emerge consistently across the case-study countries as enabling broad resilience: diversified production systems, high social capital, adaptive public institutions, low pre-crisis inequality, and investment in ecological buffers (e.g. biodiversity, healthy soils, water security).
Importantly, these factors are mutually reinforcing. Societies that invest in ecological buffers tend also to maintain higher social capital, and both correlate with stronger institutional adaptability. This points to a virtuous cycle that policymakers can actively cultivate through integrated rather than siloed policy design.
The findings challenge a deeply embedded assumption in conventional macroeconomics: that environmental protection is a luxury good affordable only during growth phases. The evidence suggests the opposite — ecological degradation is a resilience liability that deferred costs compound into future vulnerability.
