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Prepare developed democracies for long-run economic slowdowns

Nature Human Behaviour volume 5, pages 1608–1621 (2021)Cite this article

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Abstract

Developed democracies proliferated over the past two centuries during an unprecedented era of economic growth, which may be ending. Macroeconomic forecasts predict slowing growth throughout the twenty-first century for structural reasons such as ageing populations, shifts from goods to services, slowing innovation, and debt. Long-run effects of COVID-19 and climate change could further slow growth. Some sustainability scientists assert that slower growth, stagnation or de-growth is an environmental imperative, especially in developed countries. Whether slow growth is inevitable or planned, we argue that developed democracies should prepare for additional fiscal and social stress, some of which is already apparent. We call for a ‘guided civic revival’, including government and civic efforts aimed at reducing inequality, socially integrating diverse populations and building shared identities, increasing economic opportunity for youth, improving return on investment in taxation and public spending, strengthening formal democratic institutions and investing to improve non-economic drivers of subjective well-being.

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Fig. 1: Historical growth and democracy trends.
Fig. 2: Slow growth and public debt.
Fig. 3: Government interest burdens and inflation.
Fig. 4: Social challenges that slow growth could exacerbate.
Fig. 5: Size of government and inequality.

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Acknowledgements

The authors thank M. Boileau, M. Kimball, R. Langendorf, W. Eichhorst, T. Ippolito, M. Hegwood, R. Marshall, two anonymous reviewers, and participants in several classes and seminars for helpful comments on an earlier version of this manuscript. This work was funded by the University of Colorado Boulder and the Cooperative Institute for Research in Environmental Sciences (start-up grant to M.G.B.). The funders had no role in study design, data collection and analysis, decision to publish or preparation of the manuscript.

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Authors and Affiliations

  1. Cooperative Institute for Research in Environmental Sciences, University of Colorado Boulder, Boulder, CO, USA

    Matthew G. Burgess

  2. Environmental Studies Program, University of Colorado Boulder, Boulder, CO, USA

    Matthew G. Burgess, Amanda R. Carrico & Steve Vanderheiden

  3. Department of Economics, University of Colorado Boulder, Boulder, CO, USA

    Matthew G. Burgess & Alessandro Peri

  4. Bren School of Environmental Science and Management, University of California Santa Barbara, Santa Barbara, CA, USA

    Steven D. Gaines

  5. Department of Political Science, University of Colorado Boulder, Boulder, CO, USA

    Steve Vanderheiden

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  1. Matthew G. Burgess
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Contributions

M.G.B. conceived the study and analysed the data. M.G.B., A.P., A.R.C., S.D.G. and S.V. wrote the paper.

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Correspondence to Matthew G. Burgess.

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Supplementary Table 1

Regression coefficients, 95% confidence intervals, and P values from Fig. 2e,f.

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Burgess, M.G., Carrico, A.R., Gaines, S.D. et al. Prepare developed democracies for long-run economic slowdowns. Nat Hum Behav 5, 1608–1621 (2021). https://doi.org/10.1038/s41562-021-01229-y

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