Systems thinking for better social policy: a case study in financial wellbeing

Social problems are becoming increasingly complex. Policymakers, thus, cannot solve these issues with a single policy instrument. For example, while decades of research have examined the individual factors that influence financial stress, less is known about how organisations, social structures, policies, social norms, and large-scale events interact to affect one’s financial wellbeing. Using a systems approach as the basis of our conceptualisation, we put forward a theoretical model to help policymakers and practitioners to address the root causes of such complex issues. We argue that extant literature does not adequately conceptualise the complex relationships between the micro, meso, and macro-level drivers of financial wellbeing. As a result, researchers, policymakers, and practitioners are under-resourced when it comes to designing interventions to improve individuals’ financial situations. We use the examples of affordable housing and social security policy to highlight the utility of a systems approach. In doing so we contribute to ongoing debates by putting forward a model of financial wellbeing in the context of Western countries (specifically Australia) that can better incorporate the moderating, mediating, and reciprocal relationships between financial wellbeing and its drivers.