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CHAPTER ONE
The Need for Innovations to Implement the Sustainable Development Goals
Raj M. Desai, Hiroshi Kato, Homi Kharas, and John W. McArthur
On September 25, 2015, 193 countries adopted a set of goals to end poverty, protect the planet, and ensure prosperity for all people, under the auspices of the UNâs 2030 Agenda for Sustainable Development. These Sustainable Development Goals (SDGs) represented a historic breakthrough in multilateral cooperation. As stated in the summit agreement:
This Agenda is a plan of action for people, planet and prosperity.⌠All countries and all stakeholders, acting in collaborative partnership, will implement this plan. We are resolved to free the human race from the tyranny of poverty and want and to heal and secure our planet. We are determined to take the bold and transformative steps which are urgently needed to shift the world onto a sustainable and resilient path. As we embark on this collective journey, we pledge that no one will be left behind. (United Nations, 2015)
The agreement on the SDGs was followed in December by the Paris Agreement on climate change and preceded by adoption of the UNâs Addis Ababa Action Agenda at the July 2015 Third International Conference on Financing for Development.
In 2015 the three agreements were considered a triumph of international cooperation. The pathway had been complicated. Differing visions of the appropriate number of goals and targets, the potential costs, and the means of implementation led to protracted negotiations lasting more than three years, from 2012 to 2015. In 2014 even the holding of a Financing for Development conference was questioned, with many arguing there was little political appetite for more aid commitments. Success in Paris was also far from assured, with the history of the failed 2009 Copenhagen climate summit still a vivid memory in the minds of many people.
So it was with a sense of relief that all national governments reached the agreements with support from so many other stakeholdersâcivil society, the business community, academics and scientists, young people, and indigenous groups. But the ambitions had been laid out with few specific overarching action plans. A simple questionâWhat happens next?âremained unanswered.
The universal, inclusive, and integrative nature of the SDGs, coupled with their broad scopeâseventeen goals and 169 targetsâposes specific challenges for implementation. At its core, Agenda 2030 is about stimulating change, because everyone agrees that a business-as-usual approach will not suffice. Moreover, shifts in technology, finance, and global politics are occurring too rapidly for anyone to imagine that a simple continuation along historical pathways will deliver the right results. There is an imperative to articulate new approaches that will alter the trajectories so as to achieve every goal. What needs to change, whose actions need to change, and how can change be organized?
Our purpose in compiling the essays in this volume is to offer practical suggestions for innovations that could and should be adopted to bring about necessary change. Without such change, there is a risk of active inertia, of bureaucracies in governments and companies recognizing limitations in their traditional approaches but finding themselves unable to react with sufficient forcefulness and purpose to alter outcomes.
Where Are We? SDG Trends and Gaps
The optimism that lay behind the decision to set the SDGs as ambitious global targets stemmed from the considerable gains realized under the Millennium Development Goals (MDGs). Many of the poorest countries registered major accelerations in progress on measures of health and education in particular, even in cases where targets were not explicitly met. At least 20 million and as many as 30 million additional lives were saved compared to pre-MDG trends, the majority in sub-Saharan Africa (McArthur and Rasmussen, 2018).
A starting point for the SDGs is the final stretch in ending extreme poverty. In 2015, around 700 million people were living on less than $1.90 per day (in 2011 U.S. dollar purchasing power parity terms). By 2030, even under current trajectories, that number is slated to be closer to 440 million people, or 5 percent of the worldâs population. However, after falling by roughly one percentage point per year over a generation, the global trend of progress is on course to slow. That is because an increasing share of the worldâs remaining extreme poverty is becoming concentrated in countries with slow rates of progress and fast-growing populations.
Notably, Nigeria is beginning to represent the foremost concentration of the global poverty challenge. As India continues to enjoy rapid progress in reducing extreme poverty, Nigeriaâs estimated numbers continue to grow. By the end of 2018, India will likely drop below 80 million people living in extreme poverty, while Nigeriaâs figure is expected to be higher. Of course, the challenges of extreme poverty are not limited to any single country. At least thirty-one countries are âseverely off trackâ with respect to the goals of ending extreme poverty (Gertz and Kharas, 2018). Among 123 countries with data to assess 2030 trajectories across measures of access to water, access to sanitation, undernourishment, and primary school completion rates, only seven countries are on track to meet all four relevant SDG targets (updated calculations based on McArthur and Rasmussen, 2016). Change is needed everywhere.
Among developing countries, the challenges of extreme poverty and basic needs are closely related to the SDG challenge of ending preventable child and maternal deaths. Target 3.1 calls for the world to reduce the maternal mortality ratio to 70 deaths per 100,000 live births, down from around 216 per 100,000 live births in 2015, and target 3.2 calls for every country to reduce the child mortality rate to no more than 25 deaths per 1,000 live births. A recent study (McArthur, Rasmussen, and Yamey, 2018) estimated that approximately forty-two countries are currently off track for both maternal and child mortality. If every country achieves both targets, an additional 11.8 million lives will be saved compared to current trends, including 10.2 million children and 1.6 million mothers. Here, Nigeria accounts for around a third of the lives at stake. When the Democratic Republic of Congo and Pakistan are included, these three countries alone account for more than half the lives at stake.
Many of the countries facing the deepest poverty challenges also have fragile public institutions. A generation ago, those contexts were considered too difficult for long-term development programming, but recent evidence suggests there are opportunities for progress. For example, Schmidt-Traub (2018) finds evidence suggesting that, among country proposals submitted to the Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM), there is no difference in technical quality between proposals prepared by fragile states and those prepared by nonfragile states. Nnadi and others (2017) show that with the right strategic and operational tactics, direct interventions like vaccinations can be effective even in diverse conflict situations. In a similar vein, Gertz and Kharas (2018) show that World Bank project evaluations have found increasingly similar success rates in countries that are severely off-track with respect to extreme poverty trajectories. It is not clear that state fragility or a recent lack of progress necessarily inhibits progress toward an SDG target.
At the other end of the economic spectrum, the sustained expansion of many fast-growing countries is driving a realignment of the world economy and its geopolitics. For the past decade, Asia has been the engine of more than half the worldâs annual aggregate economic growth, even when Japan is excluded. This marks the first time in the modern era that emerging Asia has been the leading driver of the global economy.
In this context, the challenge of sustainable development is universal. Many advanced economies have experienced a slowdown in labor productivity growth, relatively stagnant median wages, and deepening concern over the concentration of economic gains among the very wealthy. Across high-income countries, the share of people reporting inadequate income to buy food throughout the year has been stagnant (Gertz and others, 2017). A study of Canadaâs domestic trajectories with respect to SDG targets showed that even such an advanced economy is not yet fully on track for any of the first sixteen goals (McArthur and Rasmussen, 2017). This is not because Canada cannot achieve the goals by 2030 but rather because a significant population or set of issues is getting left behind in each policy domain. Thus the global reference points for defining economic success are shifting.
Recouple Economic Growth and Social âGoodâ: The Case for Inclusion
One distinguishing feature of Agenda 2030 is that it calls for inclusion. It speaks to the growing global resonance of arguably the foremost SDG themeâto leave no one behind. Whether the issue is gender, indigenous status, ethnicity, religion, sexual orientation, geography, class, migration status, or some other aspect of identity, every country in the world is grappling with the policy challenges of inclusion and with political tensions resulting from exclusion. In some countries, these tensions are generating constructive public reckonings about groups and communities that have been left behind, with social media technologies providing new forms of public debate. The international #MeToo movementâs illumination of long-standing gender inequities highlights the speed at which political transformations can arise. In other countries, governments have taken a more authoritarian or restrictive stance and used the same technologies to limit public discourse. There is constant tension between the benefits and costs afforded by the expanding array of digital tools.
This difference in governmentsâ reactions reflects a central contrast in the world. On the one hand, the SDGs can be interpreted as an effort to promote the successful expansion of the global middle class. From this perspective, the outlook is good. One of the most fundamental structural changes in the world economy is the unprecedented growth of the number of people living on around $11 to $110 per day. In 2000, fewer than 2 billion people lived in this income band. Today the corresponding number is more than 3 billion, and the world is about to become, for the first time, majority middle class. By the SDG deadline of 2030, there will likely be more than 5 billion middle-class people, with most of the expansion coming in Asia (Kharas, 2017).
On the other hand, these new middle-class people will need an unprecedented expansion of infrastructure to support their livelihoods, including energy, transport, and housing infrastructure, all of which present a challenge to achieving the environmental sustainability goals. These same people will also change the politics of distribution in their own economies, often pushing for more social insurance programs as opposed to social assistance programs from which the poor also benefit (Desai and Kharas, 2017).
Few countries in recent years have been able to achieve economic growth along with a distribution perceived as fair to all. Calls for âinclusive growthâ or to âleave no one behindâ are heard, but there is less clarity on what this means in practice: probably some combination of more equal access to opportunities through getting the right skills and education, less discriminatory labor markets that reward men and women equally (among other inequities), and stronger public safety nets. There is nothing about how market economies operate that inevitably leads to a deterioration in income distribution, at least in terms of the consumption opportunities of the poorest. As an empirical matter, there was no systematic relationship between growth and distribution in the postwar period. Looking across countries at changes in the Gini coefficientâa measure of inequalityâover ten-year periods since 1950 shows that the mean change is zero. Just as many countries saw improvements in their Gini coefficients as saw a deterioration. The same result holds in the period since 2000, when digital technologies and winner-take-all companies have emerged. Of 146 countries that have two surveys separated by about a decade since 2000, thirty-seven have had a worsening of the Gini coefficient by more than 1 percentage point, eighty-one have shown an improvement, and the remaining twenty-eight have had no change.
Nevertheless, the size of changes in top incomes suggests that some growth pathways and policies deliver better distributional outcomes than others. In this book, much of our discussion of targeting places and updating governance has implications for the distributional aspects of opportunities and outcomes.
Decouple Economic Growth and Environmental âBadsâ: The Case for Ecology
One stark feature of the current global economy is the dramatic strain humanity is placing on Earthâs natural assets. Climate change is the most prominent of these, with greenhouse gas (GHG) emissions still growing year over year as of 2017. Based on the current trajectory, emissions will reach roughly 60 gigatons (GT) per year by 2030, rather than decline to around 40 GT, as required by the Paris Agreement on climate (UNEP, 2017).
For most of the twentieth century, economic growth was fueled by growth in energy use and a corresponding increase in GHG emissions. As the scientific evidence mounted of a link between human-driven carbon emissions and climate change, efforts began to decouple economic growth from these negative environmental consequences. In the United States, for example, GHG emissions peaked in 2007. In the following years up to 2016, overall gross domestic product grew by more than 12 percent, while greenhouse gas emissions declined by 11 percent, which translates to a greater than 20 percent decline in emissions per unit of GDP (EPA, 2018; World Bank, 2018). Globally, the onset of decoupling has been less pronounced, as aggregate economic growth rates have been much faster and the transition away from carbon-intensive energy systems generally slower, leading to ongoing increases in overall emissions.
Climate change is not the only environmental âbadâ to be considered. A related challenge lies in...
