Brookings Institution Report Calls for New Framing on SDG Spending
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The Brookings Institution released a report discussing needs, spending and financing for the “universal” achievement of the SDGs.

Authors Homi Kharas and John McArthur stress the importance of government responsibility to ensure that public sector spending aligns with SDG outcomes.

The authors note that the SDGs will only be properly financed and achieved when there is clarity on each of the underlying problems to be solved, on the respective mechanisms needed to address them, and on the appropriate mix and volume of resources needed for implementation.

23 October 2019: The Brookings Institution has released a report discussing needs, spending and financing for the “universal” achievement of the SDGs. Among other recommendations, the report calls for reviewing international public finance volumes and allocations through an “SDG needs lens.” 

The report titled, ‘Building the SDG Economy: Needs, Spending, and Financing for Universal Achievement of the Sustainable Development Goals,’ also calls for  incorporating SDG spending into government financial accounting and reporting, and adopting SDG-consistent integrated national financing frameworks to provide a sound analytical basis for guiding effective SDG public spending. 

SDG-consistent economies require building inclusive cities and industries that succeed on environmental terms.

The authors argue that a “new framing” is required to build SDG-consistent economies. This involves 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.

Written by Homi Kharas and John McArthur, the report stresses the importance of government responsibility to ensure that  public sector spending aligns with SDG outcomes. It focuses on what governments must do through public spending for making progress on the SDGs, not because it is the only form of spending relevant for the Goals, but because it is the form of spending “most directly under the purview of policymakers.”

The authors find that SDG-related public spending is already large, at USD21.3 trillion globally in 2015. Governments are on track to spend between USD32.3 trillion and USD33.6 trillion per year in 2030, based on current trends on economic growth and spending. By their findings, most low-income countries show large SDG need gaps, and estimate that by 2025, these countries need minimum public spending that averages USD344 per person per year for the SDGs. 

To close the SDG needs gaps, Kharas and McArthur suggest:

  • Developing a concerted plan to raise domestic and external resources that can address each country’s specific needs gaps;
  • Assessing the potential for domestic resource mobilization (which is only beneficial if it is raised in a manner not counterproductive to other SDG aims);
  • Considering official aid, adding that if all countries from the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) were to meet the aid target of 0.7% of gross national income (GNI), it would generate approximately USD200 billion in additional resources by 2025 — “more than enough” to close the SDG needs gap at least in low-income countries; and
  • Replenishing several large multilateral funds from now through 2020, such as: the World Bank’s International Development Association; the African Development Fund; Gavi, the Vaccine Alliance; the Green Climate Fund (GCF); the International Fund for Agricultural Development (IFAD); the Global Partnership for Education; and the International Finance Facility for Education.

Per the report, the SDGs will only be properly financed and achieved when there is clarity on each of the underlying problems to be solved, on the respective mechanisms needed to address them, and on the appropriate mix and volume of resources needed for implementation. The authors recommend that countries and their international partners design a programme to update and align the international finance system with the SDGs and encourage implementation of SDG-anchored national frameworks. They also note that aid allocations should be driven more directly by SDG needs and achievements, and by exploring what a public spending program to achieve the SDGs in each individual country would require. [Publication: Building the SDG Economy: Needs, Spending, and Financing for Universal Achievement of the Sustainable Development Goals]

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