The affordability of the Sustainable Development Goals: A myth or reality?

Patima Chongcharoentanawat, Kaleab Haile, Bart Kleine Deters, Tamara A. Kool & Victor Osei Kwadwo

#2016-027

Global governance in various forms has emerged as a salient means of setting and driving common development goals that are of interest to the world's functioning at large. However, literature is divided on the attribution of achievements to the global social governance efforts. The experience of the Millennium Development Goals (MDGs) showed the importance of setting indicators at an early stage to support a sound monitoring system. If the world is to start implementing the Sustainable Development Goals (SDGs) in 2016, we cannot afford a lag of several years before putting monitoring tools in place and measuring progress towards achieving these goals.

To answer the question on the level of resources required to fulfil the SDGs target by country and income category, five low and lower middle income countries were selected from Asia, Africa, and Latin America based on availability of data and their classification as low and lower-middle income countries: Cambodia, El Salvador, Ethiopia, Indonesia, and Senegal. The required data for the assessment is sourced from the World Bank Development Indicators Databank (WDID).

The estimation of the resource requirement to adhere to the poverty, health and education targets of the SDGs involves computing three indices for each dimension. For the income gap index, two poverty lines underlie the composite resource gap as percentage of the GDP to meet the SDGs targets on poverty. The education gap is constructed by normalising seven indices that either directly capture or proxy the governance and outcome targets on education in the SDGs. Thirdly, this research employed a three-step approach in estimating the normative public health expenditure gap; the staff expenditure gap; and the resource allocation expenditure gap. To conclude, the viability of closing the cumulative resource gap is assessed in light of a country's tax revenue.

Keywords: Sustainable Development Goals, Millennium Development Goals, attribution, monitoring, fiscal stress, fiscal capacity, health, education, poverty, Cambodia, El Salvador, Ethiopia, Indonesia, Senegal

JEL classification: H21, E62, H51, H52, H53