Halftime for the Sustainable Development Goals

When the UN General Assembly in 2015 agreed on the Agenda 2030, its SDGs consisting of 17 individual goals, marked a major milestone in Global Economic Governance. In contrast to their predecessors, the Millennium Development Goals (MDGs, agreed in 2000) which contained eight specific development goals with quantitative targets to be achieved by 2015, the SDGs targeted not only less developed and emerging countries, but all members of the United Nations. In this way, they created the space for a world community, stressing that the 17 global goals needed to be pursued by all countries in the world. 

For emerging economies and Least Developed Countries (LDCs) this was a big symbolic step forward: not to be singled out as laggards, but instead included in a global framework where each country in the world is held responsible for the global common good. While this was a major conceptual and consciousness break with a general “us vs. you”, often hierarchically applied mindset, the daily policy task to make progress frequently did not live up to this commitment. One of the most obvious deficiencies is the fact that rich countries so far have not lived up to their promise to transfer US$100 billion per year to LDCs to combat climate change. 

Innovations 

Following in the footsteps of the MDGs in a more differentiated way, the SDGs widen the narrowly economic definition of what “development” means for countries, both rich and poor. They took their cue from the UN Human Development Indicators which emphasize that “people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone”. Thus, goals like reducing poverty, access to education and drinking water, preserving oceans, combating climate change, ensuring gender equality, healthcare, sustainable consumption and production patterns as well as infrastructure, clean energy security, equitable income distribution, strong accountable institutions and global partnerships, and a number more specific goals which define people’s lives enter into the portfolio of the countries’ policy-makers and international financial institutions. This is a “beyond growth” agenda, whose proponents have been opposing the traditional neoclassical economic model focusing on GDP growth as the main development indicator. 

The economists’ discussion of how to measure human well-being, i.e. the state of a society’s development, and which type of policies to pursue in order to increase well-being, goes back a long way. Already in 1930, John Maynard Keynes published an article on “The Economic Possibilities of Our Grandchildren”. 

Problems 

One conceptual problem with the SDGs is that all 17 goals stand side-by-side. They neither take account of overlaps, and much more importantly, of tradeoffs between them. For instance, pursuing the goal of combating climate change (SDG 13) may entail, in specific cases, the destruction of employment opportunities in polluting industries (SDG 8); or the goal to achieve food security (SDG 2) may increase global warming (SDG 13) or endanger sustainable agriculture (SDG 15). It is the task for policy-makers to manage such tradeoffs. 

Another problem with SDGs is that failure to achieve the targets does not call forth sanctions. While there is adequate monitoring of progress (always an important agenda item at the annual "COP" UN Climate Change Conferences), the most severe sanction lies in the publication of the monitoring reports and a potential “naming and shaming”. 

What happens in reality is that individual countries and international financial institutions, like the World Bank and some regional development banks, pursue individual SDGs. As an indicative framework, the SDG process is by far superior to the so-called “Washington Consensus” pursued previously by the Bretton Woods Institutions5, with a heavy bias towards privatization, deregulation and external competitiveness as enhancing GDP growth. This model, fashioned after the post-war experience of industrialized countries, proved to be a positive role model only in very exceptional cases. It prematurely forced developing countries into world trade, caused high external indebtedness and a number of the specific problems which the eventual switch towards the SDGs is trying to remedy. 

Conclusion 

The SDG concept is a major step forward as a development framework for all countries of the world. It lays out a much wider umbrella of development and well-being targets than narrow economic metrics like GDP or GDP per capita can describe. In this way, while statistically cumbersome and difficult to communicate because of its high degree of differentiation, it is able to represent the multiple facets of real life around the world. Problems with tradeoffs between targets or overlaps need to be worked out individually when country policies are implemented. It is a matter of concern that after nearly uninterrupted progress with many SDGs until the COVID-19 crisis, there has been a severe reversal since. The Ukraine war has exacerbated these reversals. Once more, it is the most vulnerable countries and within them the most vulnerable people who are most heavily affected.  

Profile: Kurt Bayer 

Kurt Bayer is Senior Research Associate at the Vienna Institute for International Economic Studies and Emeritus Consultant at the Austrian Institute of Economic Research. His research interests focus on crisis prevention and resolution, industrial and innovation policies, anti-corruption and transparency and EU economic policy. In prior positions Mr. Bayer was a researcher and board member at the Austrian Institute of Economic Research (1971–1995), Deputy Director General for Economic Policy and International Financial Institutions at the Austrian Ministry of Finance (1995–2008), Board Director at the World Bank (2002–2004) and Board Director at the European Bank for Reconstruction and Development (2008–2012).