In March 2026 Finland topped the World Happiness Report for the ninth year running, and Costa Rica rose to fourth, the highest place a Latin American country has ever reached [1]. Rankings like these measure how people rate their own lives. Cities, meanwhile, still tend to measure progress by what they build. India’s Smart Cities Mission is a typical example: it formally closed on 31 March 2025, and by March 2026 it reported 7,790 of 8,064 projects completed, worth ₹1,56,257 crore, with a command and control centre in each of its 100 cities [2]. Figures like these record progress of a kind. They do not tell us whether residents feel their lives are going well.

That gap, between what cities build and how residents actually live, is exactly where contemporary planning theory has been arguing for half a century. This article traces how five strands of that theory understand development and happiness, what governments have done with them, and what planners anywhere can take forward.

Growth is not the same as a good life

The idea that rising income does not automatically raise happiness is older than most of today’s master plans. In 1974 the economist Richard Easterlin showed that average happiness in the United States had stayed roughly flat while income per head kept climbing [3]. His explanation was that growth also lifts aspirations, and people judge their lives against those around them. In 2010 Easterlin and colleagues revisited the question with data from developed, developing and transition economies and found the same long-run pattern: over a decade or more, faster growth did not bring a matching rise in life satisfaction [4]. Economists still debate the size of the effect, but the core warning has held.

Policy caught up slowly. In 2009 the Commission on the Measurement of Economic Performance and Social Progress, chaired by Joseph Stiglitz with Amartya Sen as adviser, told the French government that GDP alone was a poor guide to progress [5]. It recommended measuring quality of life, inequality, well-being and sustainability alongside output [5].

Sen’s own work supplies the theory planners need most. In Development as Freedom he argued that development should be judged by the substantive freedoms people enjoy, which he called capabilities, rather than by income or by satisfaction alone [6]. For a city this reframes the question. Instead of asking how many flyovers were built, it asks what residents can now do and be: walk a child safely to school, reach work in reasonable time, find shade on a hot afternoon, take part in decisions about their neighbourhood.

Five theories, five routes to happiness

Collaborative planning. Patsy Healey’s Collaborative Planning (1997) moved the field away from the expert who draws the plan alone [7]. She drew on Giddens and Habermas to describe planning as an interactive process, in which institutions should create settings where people deliberate openly and without coercion [7]. The link to happiness runs through agency and trust: people who shape decisions about their neighbourhood tend to feel they belong to it.

The just city. Susan Fainstein’s The Just City (2010) set out three norms for urban policy: equity, democracy and diversity [8]. She tested them against post-war housing and development in New York, London and Amsterdam [8]. Her argument matters for happiness because a city that improves averages while displacing its poorest residents has not made its people better off.

Planning from the South. Two scholars changed how planning theory sees the cities of the global South. Ananya Roy argued that India’s planning failures are not simply a lack of capacity; the planning regime itself operates through informality, deciding which unauthorised settlements are demolished and which are regularised [9]. Vanessa Watson argued that theory built in the global North rests on assumptions that do not hold in the South, and that seeing from the South unsettles them [10]. For happiness, the lesson is blunt: a plan that cannot see the informal settlement, the street vendor or the shared courtyard cannot improve the lives lived there.

The proximity city. Carlos Moreno’s 15-minute city asks that residents reach six essential functions (living, working, commerce, healthcare, education and entertainment) within a short walk or cycle ride, built on density, proximity, diversity and digitalisation [11]. The idea echoes Clarence Perry’s neighbourhood unit (see our piece on Perry and the 15-minute city). Critics such as Kostas Mouratidis caution that, applied uncritically, it carries pitfalls for sustainability, equity and livability [12].

Doughnut and wellbeing economics. Kate Raworth’s doughnut defines a safe space between a social foundation that no one should fall below and the ecological ceiling that no one should overshoot [13]. In April 2020 Amsterdam became the first city to formally adopt the model for its post-pandemic recovery, alongside a circular strategy that halves the use of new raw materials by 2030 [14]. Copenhagen and Brussels soon followed [14].

The “happy city” literature pulls these threads together. Charles Montgomery’s Happy City drew on brain science and urban experiments, from Bogotá to Vancouver, to argue that design choices shape trust and social connection [15]. Dimitris Ballas, writing in the journal Cities, asked directly what makes a happy city and reviewed the evidence on how place shapes subjective wellbeing [16].

From theory to law and budget

Three governments show how far these ideas can travel, and where they stall.

Wales wrote wellbeing into law. The Well-being of Future Generations (Wales) Act became law on 29 April 2015 [17]. It sets seven well-being goals, from a prosperous and resilient Wales to one of cohesive communities, and five ways of working: thinking long term, prevention, integration, collaboration and involving people [17]. It also created a Future Generations Commissioner to hold public bodies to account [17]. In Healey’s terms, it makes collaboration a duty rather than a courtesy.

New Zealand budgeted for it. On 30 May 2019 New Zealand presented what it called its first Wellbeing Budget [18]. Treasury assessed spending priorities with its Living Standards Framework, a dashboard that looks beyond economic and fiscal outlooks to the state of wellbeing [18]. Mental wellbeing, especially for under-24s, and child poverty were among its priorities [18].

Madhya Pradesh created a department. On 6 August 2016 the Indian state of Madhya Pradesh set up India’s first government department of happiness, the Anand Vibhag, with the Rajya Anand Sansthan as its working arm [19, 20]. Its emphasis has been on inner wellbeing, through Alpviram workshops and thousands of registered volunteers [19, 20]. That is a legitimate aim, but it sits largely outside the built environment. Across all three cases, the weakest link is to what planners actually control: land use, housing, transport, green space and the quality of public services.

What cities are still missing

Urban policy in much of the world still speaks the language of outputs: projects sanctioned, kilometres laid, control centres commissioned. The theories above ask different questions, and most cities have little data to answer them.

We rarely ask residents. When the World Happiness Report 2020 ranked 186 cities worldwide by residents’ own life evaluations, it showed that this kind of measurement is possible at city scale [21]. Yet few city plans anywhere track it, let alone neighbourhood by neighbourhood.

We rarely link the built environment to how people feel. This is where capability thinking needs local evidence, and some now exists. In India, for example, a stakeholder investigation by Sarkar and Pujara, with 201 respondents, examined 49 physical and 12 social indicators of the urban environment in relation to mental well-being [22]. Their assessment framework for India derived indicator weights with stakeholders, using the nominal group technique and the rank order centroid method [23]. A companion conceptual framework maps urban environment indicators to mental well-being [24], and a Delhi case study explores how perceived urban environments relate to it [25].

We plan around the informal city, not with it. Roy’s and Watson’s critiques apply directly. Happiness gains that bypass informal settlements, street vendors and rental migrants will miss a large share of city dwellers across the global South.

The tools exist. What is missing is a planning system that treats residents’ wellbeing as an outcome it is answerable for (see our earlier pieces, From Happy Neighbourhoods to Happy Cities and Designing Infrastructure for Happiness).

Planning for happiness: six recommendations

1. Write wellbeing into the plan’s objectives, not its preamble. Master plans and city development plans should set a small number of measurable wellbeing goals, as Wales does nationally [17], and report against them.

2. Plan with residents, not for them. Collaborative planning [7] works only if neighbourhood councils and local forums have real agenda-setting power and timely information.

3. Count the informal city. Map informal settlements, vending zones and rental housing in every plan, so that they appear in budgets rather than in eviction notices [9, 10].

4. Pair proximity with protection. Fifteen-minute neighbourhoods [11] should come with anti-displacement safeguards, so that better streets do not push out the people they were meant to serve [8, 12].

5. Budget against a wellbeing dashboard. Test major capital projects against a living-standards framework, as New Zealand did [18], covering health, time, safety, green space and social connection.

6. Measure life satisfaction at neighbourhood level. Add life-evaluation and mental well-being questions to city surveys, use locally weighted indicators [22, 23], and publish the results on a fixed cycle.

Programmes like India’s Smart Cities Mission have given cities a decade of experience in building infrastructure at scale [2]. The next decade should ask a harder question: did it make people’s lives better? Contemporary planning theory, from Sen’s capabilities to Fainstein’s just city, already supplies the yardsticks. Planners everywhere now need the data, and the political will, to use them.

References

Cover image: People talking on a bench in a leafy city park. Photo by Anton Kudryashov on Pexels.