Guest Blog: How much does the world spend on the Sustainable Development Goals?
Guest blog by Homi Kharas: Interim Vice President and Director - Global Economy and Development and John McArthur: Senior Fellow - Global Economy and Development. Originally published on Brookings Institute website here in their Future Development section.
In a forthcoming paper, we zoom out on the global SDG financing landscape in order to zoom back in on country-specific contexts and gaps. In particular, we consider how much the world’s governments are already spending on SDG-related issues every year, how spending varies across income levels, and how the spending patterns link to country-by-country estimates of needs. We focus on the public sector due to its lead responsibility for tackling both the public goods and the “no one left behind” issues embedded in the SDGs and the 2015 Addis Ababa Action Agenda on financing for development, the latter including a “social compact” commitment to provide universal access to basic services. This research can be considered as complementary to assessments of where the private sector can best contribute to SDG financing. Below we summarize some preliminary findings, noting that all results are subject to refinement as we complete the analysis.
1. GLOBAL PUBLIC SECTOR SDG SPENDING IS ALREADY MORE THAN $20 TRILLION PER YEAR
2. SDG SPENDING RISES PROPORTIONATELY WITH GDP PER CAPITA
Delving a layer deeper, our research draws attention to the limits even of considering averages by country income category. As shown in Figure 2, there is a clear relationship between public SDG spending and GDP per capita. For every dollar of higher income, countries have, on average, a correspondingly higher level of average SDG spending. Importantly, when drawing a line through the cross-section, its slope is greater than one, suggesting that SDG spending rises faster than GDP per capita. For every 10 percent higher level of average GDP per capita, we find average SDG spending to be 13 percent higher.
|Figure 2: Estimated SDG public spending per capita, 2015|
Source: Authors’ calculations, based on: FAOSTAT (2017) and IFPRI SPEED (2015) (agriculture); UNESCO (2018) (education); WHO (2015) (health); ILO World Social Protection Report (2019) (social spending); IMF Investment and Capital Stock database (2017) (infrastructure); PNAS (2008) (biodiversity); IMF Governance Finance Statistics (2016) and UNStats (2017) (justice)
3. MINIMUM SDG SPENDING NEEDS ARE APPROXIMATELY $300 PER CAPITA
|Figure 3: Estimated minimum SDG public spending needs in 2025|