The Sustainable Development Agenda is pivotal to the post-pandemic economic recovery process — and in the overall objective of creating a fair, equitable and sustainable world. This brief underlines two contentions: First, the SDGs contain various forms of capital — human, physical, natural and social — that are beneficial for governments and businesses, and a renewed policy focus on the goals will boost the post-pandemic global economy. Second, statistical evidence confirms a strong causal relationship between SDGs and the local business environment, and the SDGs will have long-term positive implications in the post-pandemic global economic scenario. It is crucial, however, that these results are treated as indicative and not more, given limitations in data availability.[d]
Nevertheless, the analysis indicates directions and provides the basis for an objective instrument of decision-making by attempting to reconcile the trinity of equity, efficiency and sustainability. This is perhaps the most significant policy challenge in the developing world.[43]
The exercise to establish the SDG index’s strong positive causality on the EDB scores has two significant policy implications. First, it will help arrive at a more holistic policymaking approach than the growth-focused ones, especially in developing countries like India. South Asian policymaking’s growth-fetishism has been associated with immense negative social and environmental externalities that often extract long-term costs and have been a key impediment to comprehensive growth and development aspirations.[44] The establishment of SDG causality on the business climate attempts to correct that by accommodating various capitals and preparing the economies measured to absorb or adapt to possible shocks, including those evolving from the COVID-19 pandemic.
Second, given the SDG framework’s potential to enable a congenial business climate, this brief infers that a country’s development policy should not be divorced from its investment and business promotion strategy. This exercise presents a business case for SDGs globally, which is missing from current policy thinking.
Policymakers must not lose sight of the challenges in implementing the SDGs, which predate the current crisis. The SDGs should not be seen as a measure of development alone, but also an important instrument to reflect the business environment. Crucial challenges to the 2030 Agenda include a rough start to the ‘decade of action’ (which could further delay the 2030 deadline that global institutions sought to meet), scepticism coupled with the difficulty in achieving goals, and a widening resource gap. Governments and other international players must come together with renewed political will and engagement.
About the Author
Soumya Bhowmick is a Junior Fellow at ORF, Kolkata.
Appendices
Appendix 1: World Regions’ SDG Scores 2020 (out of 100)

Appendix 2: World Regions’ EDB Scores 2020 (out of 100)

Appendix 3: Regression of ln EDB on ln SDG
SUMMARY OUTPUT | ||||||||
Regression Statistics | ||||||||
Multiple R | 0.756 | |||||||
R Square | 0.572 | |||||||
Adj R Square | 0.569 | |||||||
Standard Error | 0.160 | |||||||
Observations | 163.000 | |||||||
ANOVA | ||||||||
df | SS | MS | F | Significance F | ||||
Regression | 1.000 | 5.518 | 5.518 | 215.220 | 0.000 | |||
Residual | 161.000 | 4.128 | 0.026 | |||||
Total | 162.000 | 9.646 | ||||||
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 99.0% | Upper 99.0% | |
Intercept | -0.730 | 0.332 | -2.200 | 0.029 | -1.385 | -0.075 | -1.595 | 0.135 |
X Variable 1 | 1.161 | 0.079 | 14.670 | 0.000 | 1.005 | 1.317 | 0.955 | 1.367 |
Source: Performed in MS Excel
Appendix 4: Regression of ΔEDB on ΔSDG
SUMMARY OUTPUT | ||||||||
Regression Statistics | ||||||||
Multiple R | 0.499 | |||||||
R Square | 0.249 | |||||||
Adj R Square | 0.243 | |||||||
Standard Error | 1.674 | |||||||
Observations | 135.000 | |||||||
ANOVA | ||||||||
df | SS | MS | F | Significance F | ||||
Regression | 1.000 | 123.630 | 123.630 | 44.103 | 0.000 | |||
Residual | 133.000 | 372.825 | 2.803 | |||||
Total | 134.000 | 496.454 | ||||||
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 99.0% | Upper 99.0% | |
Intercept | 1.037 | 0.189 | 5.502 | 0.000 | 0.664 | 1.410 | 0.545 | 1.530 |
X Variable 1 | 0.391 | 0.059 | 6.641 | 0.000 | 0.275 | 0.508 | 0.237 | 0.546 |
Source: Performed in MS Excel
Endnotes
[a] Input market/factor market is a market in which businesses buy the resources or factors of production required to produce the good and services (products), which are then traded in the output/product market.
[b] Using the UN Sustainable Development Solutions Network Index and the Ease of Doing Business Index.
[c] The World Bank’s EDB covers 12 areas of business regulation—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, regulation on employing workers and contracting with the government. The last two parameters are not included in the EDB scores.
[d] Since its inception in 2003, the EDB Index has drawn criticism for failing to capture a holistic picture of a country’s business environment (for instance, it does not account for political environment). Yet despite this criticism, most of the missing elements are often extremely difficult to quantify. Moreover, the EDB index is the only such kind of global database on world economies.
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