Building the SDG Economy: Needs, Spending, and Financing for Universal Achievement of the Sustainable Development Goals

In this paper, we argue that a new framing is required to build SDG-consistent economies. This entails ensuring universal access to basic services, building inclusive cities and industries that succeed on environmental terms, and retrofitting advanced economies’ cities and industries that are falling short on SDG outcomes. While market actors will be crucial to many of these objectives, governments have foremost responsibility to ensure, among other things, that their public sector spending aligns with SDG outcomes. We stress from the outset that government spending does not guarantee SDG outcomes, but we nonetheless focus on public spending levels because many outcomes are constrained by lack of public resources. In that context, public sector spending and objectives are most usefully considered at the country-level. To that end, a starting point for any SDG financing analysis should be to identify what countries are already spending on activities related to the SDGs. While this idea may seem obvious, we found it challenging to implement in practice. Government budget classifications do not readily map onto SDG targets and sector-specific international sources have their own country samples and reporting norms. While we made an effort to harmonize across sources, the data challenges imply that the results reported here are only indicative. Accordingly, our first recommendation is that the IMF be tasked with incorporating into its Government Finance Statistics best estimates of what governments are currently spending on the SDGs.