The Romeo and Juliet of Economic Transformation

NAECDouglas Frantz, OECD Deputy Secretary-General

Let’s begin with a proposition: The United Nation’s Sustainable Development Goals (SDGs) and the OECD’s New Approaches to Economic Challenges (NAEC) initiative were made for each other. They are the Romeo and Juliet of economic transformation.

Consider first the SDGs. Last September at the UN, world leaders adopted an ambitious, 15-year blueprint for a better world. The goals are broad, universal and, indeed, potentially transformative. They envision nothing less than saving our planet for future generations, ending extreme poverty and hunger, and creating a healthier, safer, more inclusive world.

I say “potentially transformative” because achieving these sweeping objectives will require an unprecedented global effort. Decisions made by our governments in the next few years will determine the quality of life for generations to come around the globe.

But this is not a matter of the rich countries extending a hand to the poor ones – or dictating development approaches and policies. This time around, the leaders of the world’s rich countries and its poor countries must work together to find common solutions that recognize our interdependence as well as our independence.

Tackling the 17 goals in the UN’s 2030 Agenda for Sustainable Development will require new thinking in developed and developing countries alike, among leaders and civil society, in the corporate boardrooms and the village halls. The innovations will require fundamental changes in our patterns of consumption and production, and a recognition that we are all in this together.

Indeed, each individual goal — and the means of meeting it — will need to be viewed through the lens of policy coherence. This requires understanding that decisions made on one goal will have an impact on other goals. It’s a vision that is less straightforward and simple than conventional practices.

As Kitty van der Heijden of the World Resources Institute told the NAEC workshop at the OECD in January, actions by all will have to benefit all.

We can say with certainty that the SDGs require dynamic new approaches to economic challenges.

This brings us to the second prospective partner in this marriage: The OECD’s New Approaches to Economic Challenges, or the NAEC. The objective of the NAEC is to stimulate new thinking on integrated, multi-dimensional solutions to the world’s most intractable economic and social problems.

The approach is rooted in the principles that we must make tough decisions together and that we must understand the impact of one policy decision on other decisions, which is not always obvious or considered. The NAEC weighs the impact of uncertainty, spill overs, trade-offs and systemic risks in an effort to transform mind sets, policies and ultimately economies.

Will this marriage work? The NAEC provides an intellectual and practical framework for precisely the coherent, cooperative and universal approach required to achieve the targets set forth in the SDGs. And, like the SDGs themselves, this framework can be applied by all of us and to all of us – OECD members, emerging and developing countries and international organizations working to find solutions.

Words are cheap and the challenges are huge. But the opportunities to make the world a better place are very real — if we make the right decisions.

Progress is possible on a global scale. We have seen it. The agreement reached in Paris in December on combating climate change was a big step forward, though there remains a long way to go if we are to stop killing our planet.

The Millennium Development Goals showed what could be accomplished by focusing global attention on developing countries – child mortality rates were cut by more than half, so was the number of people living on less than $1.25 a day, to name just two results.

In the narrowest sense, the SDGs are an extension of that unfinished anti-poverty effort. Clearly, rich countries still need to help the poorest countries. The SDGs don’t absolve us of that responsibility.

But the SDGs represent a very different agenda. Yes, the SDGs ask developed countries to redouble their efforts on behalf of developing countries, especially the poorest of the poor. Equally important, however, they require us to take a hard look at ourselves. No country can say that we it has no work to do when it comes to improving our societies. In the eyes of the SDGs, we are all developing countries.

Indeed, the SDGs are the mirror in which we see our own policies and performance reflected. The picture isn’t pretty in some categories. For instance, we all need to do a better job of fostering inclusive growth and adopting sustainable consumption patterns. We all need to make sure that, at the very least, our policies do no harm to the rest of the world.

These dual objectives of the SDGs – helping others while helping ourselves — are where the OECD and the NAEC initiative are the right match. No organization is better equipped to work with both developed and developing countries than the OECD. We have been doing it for more than half a century.

At the same time, the fundamental and dynamic re-thinking of the path to solving global economic challenges embodied in the NAEC provides the right methodology for tackling the interrelated complexities of the 2030 Agenda.

In short, the integrated approach prescribed by the NAEC recognises our global responsibility to find universal solutions to the challenges of the SDGs. Our self-interest demands that we do so.

Returning to our star-crossed lovers, it seems self-evident that the SDGs and the NAEC, like Romeo and Juliet, were made for each other. Our job is to bring the Montagues and Capulets together and make sure there is a better outcome this time.

Useful links

New Approaches to Economic Challenges (NAEC)

NAEC Seminar Series

Measuring Multidimensional Well-being and Sustainable Development

NAECMartine Durand, OECD Chief Statistician and Director of Statistics Directorate, and Simon Scott, Counsellor in the OECD Statistics Directorate

The notion of sustainable development is profoundly multidimensional so assessing progress on sustainable development requires measures of multidimensional well-being. The number and diversity of the new Sustainable Development Goals and targets reflect the many dimensions of development (health, decent work, climate, etc.), and policy thinking must integrate these dimensions if progress is to be achieved across the board.

The OECD has long recognised the multidimensionality of people’s well-being and of the resources needed to sustain it over time. Realising that measures of total output are not adequate to assess progress in all its complexity, we have been actively researching relevant new measures of well-being and prosperity, and developing policies designed to improve people’s lives on a sustainable basis.

This effort has intensified and gained new traction in recent years as well-being has failed to improve in tandem with economic growth, leaving some people behind and exacerbating inequalities. The growing disconnect between the health of economies, as measured by GDP growth rates, and people’s experiences and perceptions of their lives has given rise to a new measurement and policy agenda to identify well-being indicators that can signal whether societies are evolving in desirable directions and at a sustainable pace.

The OECD has played a major role in this effort, in particular by developing a multidimensional well-being framework that can both gauge whether people’s lives are improving, and inform policy efforts toward this end. The framework also aims to indicate whether improvements are sustainable, and where governments and others need to invest to improve well-being now and tomorrow.

In 2011 the OECD launched its Better Life Initiative to measure progress on 11 dimensions of current well-being: health status; work and life balance; education and skills; social connections; civic engagement and governance; environmental quality; personal security; income and wealth; jobs and earnings; housing; and subjective well-being. The eleven dimensions are recognised as universal, i.e. relevant to societies across the world, irrespective of their level of socio-economic and human development. The framework focuses on people, takes distribution into account, includes both objective and subjective elements, and concentrates on outcomes as opposed to inputs and outputs.

The framework also considers resources for future well-being, thus bringing in a sustainability perspective. In particular, the OECD approach focuses on the broader natural, economic, human and social systems that embed and sustain individual well-being over time. The focus on stocks of “capital” or resources is in line with the recommendations of the Stiglitz, Sen and Fitoussi Report (2009) and other recent measurement initiatives that distinguish between well-being “here and now” and the stocks of resources that can affect the well-being of future generations “later”. Several approaches go beyond simply measuring levels of stocks to consider how these are managed, maintained or threatened. Recognising the global challenges and shared responsibilities to maintain well-being over time, they also highlight how actions taken in one country can affect the well-being of people in other countries (“elsewhere”).

The OECD well-being framework and the SDGs are highly consistent, not only in their general features – focusing on people, multidimensionality, today and tomorrow, here and elsewhere – but even in their specific dimensions.

Because of these close linkages, the OECD work on well-being can be particularly useful in helping countries deliver on the SDGs agenda:

  • From a measurement perspective, the OECD framework and indicators can pinpoint specific data sets to monitor national and regional progress towards targets in OECD countries, especially where the official SDGs indicator set may be more relevant for emerging and developing economies and/or for global monitoring.
  • From a policy perspective, the framework covers several areas relevant for the SDGs where the OECD has specific long-standing expertise and instruments to offer (health, education, environment, jobs, etc.).
  • From a coherence perspective, the framework embodies a recognition that many dimensions are related and therefore must be studied together and not in isolation. This has already been central to establishing the OECD Inclusive Growth policy framework which aims to nail down the interdependencies at the policy level.

BLI and SDG

In order to make the concept of well-being more policy-actionable, work is under way to study the drivers of well-being, i.e. the policies and the individual and societal characteristics shaping each of the outcomes of interest. In addition, to help policy makers to better grasp policy trade-offs and find ways to improve both the level and distribution of well-being outcomes, the OECD has built new measures of “multidimensional living standards” that integrate the multidimensionality of the Better Life framework with a focus on the distribution of income and non-income dimensions of well-being.

The interest of such an approach lies in providing an explicit link to key structural policies and their effects on various income groups, making it possible to estimate the impact of policy packages with ambiguous net effects on the well-being of the various segments of the population. For example, both stricter climate mitigation policies and extending health insurance through higher tax may improve health outcomes but reduce household income, with the net well-being effects depending on the relative elasticities of income and health to these policy changes. Work has started in the OECD to quantify these impacts, so that net results can be seen through the multidimensional living standards metric. This approach is flexible and can be easily adapted to the SDGs framework. It provides opportunities to identify the best policy measures to reach several goals at the same time – a key challenge posed by the multidimensional character of the SDGs.

Useful links

OECD Better Life Initiative

OECD work on statistics

We need to talk about the SDGs

UNSustainableDevelopmentGoalsViews vary on how much of a difference the Millennium Development Goals (MDGs) actually made to the world. But on one thing people seem more or less united: They were a great communications tool. They took the abstract concept of “development” and turned it into a series of mostly concrete goals – fewer poor people, more kids in school, healthier mothers and babies, and so on.

According to Jan Vandemoortele, an independent researcher and UN veteran, the communications power of the MDGs rested on three pillars – the three Cs: they were clear, concise, computable.

So what about the successors to the MDGs, the Sustainable Development Goals (SDGs): Will the new set of goals adopted at the United Nations in October prove equally effective as a communications tool? You could be forgiven for having doubts. While the MDGs had just eight goals and 18 targets, the SDGs have 17 goals and a whopping 169 targets.

The number of goals is just one issue; there’s also the question of scope. The MDGs were essentially focused on the needs of developing countries. By contrast, the new SDGs are part of a global agenda for the development of the entire planet – they apply to wealthy countries just as much as poorer countries, and they cover a much broader range of issues: Poverty reduction, yes, but also economic sustainability, employment, climate change and much, much more.

“If you apply those three C’s to the SDGs, it’s clear you have a problem,” according to Mr. Vandemoortele.

This “problem” – if that’s what it is – was recently discussed by development communicators at a meeting in Paris of the OECD Development Centre’s DevCom network. The discussions provided fascinating insights into differing approaches on how to communicate around the SDGs.

If you’ve heard of the SDGs at all, it may well be thanks to the Global Goals campaign, brainchild of the British filmmaker Richard Curtis (Four Weddings and a Funeral, Bridget Jones’s Diary). The campaign is operating on many fronts: In September, to coincide with the UN General Assembly, it hosted the Global Citizen festival in New York, featuring performers like Beyoncé and Coldplay; it has produced slick videos featuring famous names like Malala Yousafzai, Stephen Hawking and Meryl Streep; it has created a set of logos that rebrand the SDGs as “The Global Goals” and simplify their messages; and it has helped deliver a classroom lesson on the SDGs to half a billion children worldwide in 160 countries.

“We’re campaigning to make the Global Goals famous,” Piers Bradford of the Global Goals campaign said at the DevCom session. “We set out to tell seven billion people in seven days – patently ridiculous,” he admitted, “but it got people’s attention.” The actual estimated impact of the campaign is still impressive – in the region of three billion worldwide.

But the Global Goals campaign hasn’t pleased everybody. Among a number of complaints, some civil society groups have objected to the language of the campaign. They argue that it is oversimplified and fails to mention some key concepts – most notably the “sustainable development” part of the goals. Some of these criticisms were voiced at the DevCom meeting by Leo Williams of the Beyond2015 Campaign.

“Awareness should not be focused on some edited highlights of the SDGs, renamed as Global Goals and shown in films, adverts and music videos,” Mr. Williams said. “It should be about recognizing the change dynamics of the universal agenda, real meaningful participation, meaningful understanding, not just information.”

One concern of some civil society activists is that the focus on the 17 goals, and on certain goals in particular, risks obscuring the fact that they are actually part of a much broader agenda that has much to say on implementation and accountability. “There needs to be the recognition that this is an indivisible agenda,” according to Mr. Williams.

But is such a sweeping agenda really “communicable” (as they say in development circles)? Comments from a number of other speakers and delegates seemed to support the idea that it’s OK to pick and choose from the SDGs.

“I don’t think that at the local level, everybody in a country is going to associate with all the goals,” said Edith Jibunoh, who works on civil society relations at the World Bank: “I completely buy into the idea that in some countries the focus will be on certain areas, and I think that as development communicators we should be really comfortable with that.”

That view was echoed by Mr. Vandemoortele. “We have 169 targets in the SDGs – which is good – but you cannot have it all as a priority. If you have that many priorities then you have no priorities.” He argued that communication of the SDGs needs to happen at two levels, the local and the global, and that at both levels it needs to convey a strong sense of what’s happening in the real world.

“We have to go beyond global statistics, and coloured maps,” he said. Instead, he said, we need to hear more about the on-the-ground experience of the SDGs – Viet Nam’s successful “VDGs,” for example, or Cambodia’s inclusion of mine-clearing in its development goals. “Have you ever heard about these?,” asked Mr. Vandemoortele. “No, because we only hear about global statistics. Let us avoid the trap.”

Useful links

Informal Network of DAC Development Communicators (DevCom)

OECD Development Centre

OECD and the Sustainable Development Goals

OECD Insights: From Aid to Development

The rarest and most powerful natural resource

Download the highlights in English, French or Spanish
Download the highlights in English, French or Spanish

Today’s post, by Erik Solheim, Chair of the OECD Development Assistance Committee, is also the editorial of  the “Development Co-operation Report 2015: Making Partnerships Effective Coalitions for Action”, published today.

The global development progress over the past decades has been unprecedented in human history. Extreme poverty has been halved and in the People’s Republic of China alone, more than 600 million people have been brought out of poverty. Child mortality has also been cut in half, with 17 000 fewer children dying every day. Almost all children now go to school. Children born today can expect to live for 70 years on average, 20 years longer than those born 50 years ago. They are also growing up in a world that, contrary to what many people think, is much more peaceful than ever before.

The remaining challenges are undeniably huge. More than 1 billion people still live in extreme poverty, on less than $1.25 per day. We need to produce more food and more energy for more people than ever before while protecting the planet. The world is now embarking on the historic mission to end extreme poverty by 2030 and to implement the new Sustainable Development Goals.

We know that today, for the first time ever, humanity has the capacity, knowledge and resources we need to end poverty and green our economies. What we need is to go ahead and do it. We cannot wait for a master plan or for everyone to agree before we take action. The planet and its people who are living in poverty cannot wait for the slowest, the undecided and those least willing to act. Nations, organisations, companies and individuals who are willing to address specific development challenges need to get started – now! For this, we need to mobilise political will behind coalitions for action.

All the great success stories have happened because someone had a goal and pulled people together to get it done. Ethiopia’s Prime Minister Meles Zenawi chose sound policies and mobilised the necessary assistance and investments to set his country on a path to implementing the Millennium Development Goals and becoming a middle-income country without increasing greenhouse emissions. Bill and Melinda Gates made the initial investments to energise the Gavi Vaccine Alliance, a successful partnership that has vaccinated 500 million children and saved millions of lives. Brazil, Indonesia, other rainforest nations and a few providers of development assistance inspired the UN-REDD rainforest coalition to reduce deforestation. So far Brazil has reduced deforestation by 80% and Wilmar, Asia’s largest palm oil producer, has promised not to contribute to any further deforestation. African governments and over 200 companies are working together through Grow Africa to expand and green African agricultural systems. The United Nations Sustainable Energy for All initiative is mobilising the financial resources and political will to provide green energy for 1.3 billion people who lack access to electricity and billions more with insufficient access.

These are just a few of the many success stories that are teaching us through their example. And there are plenty of other coalitions for action just waiting for leadership. Here are some suggestions for ways we can make change that really matters.

We need a coalition against fossil fuel subsidies, which cost developing countries around $500 billion annually. Some poor countries spend more on subsidising cheap petroleum than on health and education combined. Fossil fuel subsidies are expensive, mainly benefit the upper middle class and increase pollution. A financial front-loading mechanism would allow governments to provide benefits – such as cash disbursement schemes and better public services for the poor – before removing the inefficient, but sometimes popular, fuel subsidies.

We need a global coalition to protect our beautiful oceans, currently under threat from climate change, pollution and overfishing. Developing countries are losing billions of dollars from illegal and unreported fishing while sustainable fishing could increase the value of global fisheries by more than $60 billion. The world’s coral reefs – which are home to many unique species and help protect coastal communities from extreme weather – are threatened by climate change and pollution. Protecting the oceans is a win-win for humanity and the environment.

We need coalitions to better manage the magnificent rivers of the world, crucial to providing clean hydropower, irrigating agriculture to feed a future 9.6 billion people by 2050 and managing increasing floods resulting from climate change. International expertise and front-loaded financing could help balance immediate costs with the longer-term benefits of river management.

These are just some of the many potential coalitions for action that would be highly beneficial for people and the planet.

This report shows how partnerships and coalitions for action can contribute to ending poverty and implementing the Sustainable Development Goals. It offers a theoretical framework for making partnerships coalitions for action and gives many inspiring examples of successful partnerships. The key insights are that effective partnerships must:

  • Have strong leadership
  • Be country-led and context-specific
  • Apply the right type of action for the challenge
  • Maintain a clear focus on results.

Most important is leadership. Leadership is the rarest and most powerful natural resource on the planet. Unless someone leads, nothing will happen. But when someone leads, everything is possible!

Useful links

Development Co-operation Report 2015: Making Partnerships Effective Coalitions for Action

A big year for development

Click to see the 17 goals and 169 targets
Click to see the 17 goals and 169 targets

This will be “the mother of all years for summits on international development,” says Kevin Watkins, Executive Director of the UK’s Overseas Development Institute (ODI). He’s not wrong.

Over the next 11 months, international delegates will gather first in Addis Ababa in July to discuss how poorer countries can fund their development. Then, in September, attention will shift to New York, where the United Nations will sign off on the successors to the Millennium Development Goals (MDGs). Finally, in December, Paris will take centre stage when it hosts the latest edition of the global climate change conference, COP21.

The three events may be separate, but the topics under discussion are not. For example, the development financing conference in July will need to come up with ways to pay for the priorities identified in the new development goals. In turn, those goals will (probably) cite the need to help countries better prepare for climate change.

All three events will generate plenty of news and commentary, including, no doubt, here on the blog. But if we had to pick the one that’s likeliest to grab the lion’s share of interest, it might well be the new Sustainable Development Goals (SDGs).

In part that’s simply because of their rarity value. The first, and so far only, global development goals – the MDGs – were set down just over 15 years ago. When the SDGs are agreed in September, they will set the development agenda for the next 15 years. But the attention paid to the SDGs is also likely to reflect the fact that, like their predecessors, they’ll be a powerful campaigning tool for developing countries and the wider “development community”.

Indeed, some might argue that that’s been the most important role of the MDGs. The goals set at the turn of the century won’t be met in full by the time they reach their deadline at the end of this year, although there’s been important progress on a number of them. But, as The Economist noted some time ago, the mere fact they exist has forced world leaders to discuss “matters they might prefer to ignore”.

The MDGs have also become the way in which much of the development debate is framed. Describing them as “one of the best ideas for development either of us has ever seen” Bill and Melinda Gates argue that the MDGs “focused the world on key measures of how many people get the basics of a productive life: good health and a chance to get an education and make the most of economic opportunities.”

So what about the upcoming Sustainable Development Goals? Will they match or surpass their predecessors? That’s a question that many are currently debating, even though the SDGs are still only a proposal and will not be finalised until the UN General Assembly session in September.

Much of the discussion revolves around the scope of the SDGs. Are they, in other words, trying to do too much? The MDGs comprised just eight broad goals, each accompanied by at least one specific target (making 21 in total). So, for example, the overall goal of reducing diseases like AIDS and malaria came with the target of providing access to HIV/AIDS treatment for everyone who needed it. By contrast, the current proposal for the SDGs is to have double the number of goals, 17, and a whopping 169 targets. They are also designed to be truly global, setting goals for both developed and developing countries.

The breadth of the SDGs reflects in part the process that went into their making. As we’ve noted before, critics of the MDGs accused them of reflecting the priorities of donor over developing countries. Determined to avoid similar criticism of the SDGs, the UN has consulted widely. The SDGs’ broad scope also reflects growing recognition over the past 15 years that problems like environmental degradation and inequitable growth can undermine development, and that many of these can only be addressed globally.

But for some, such as Alan Beattie, the risk of such a broad agenda is that is that if “everything is a priority … nothing is a priority”. Similarly, Bjorn Lomborg argues that “having 169 targets is like having no targets at all.” Others are more upbeat: Nancy Birdsall believes 17 goals are “not too many” and reflect the reality that development needs “more about what both rich and poor countries can do together to address global challenges”.

What all can agree on is that the SDGs are ambitious. If they’re to succeed, careful work will be needed not just on their design and implementation but on how development is financed and on how progress is monitored. All that will make for a busy year indeed.

Useful links

OECD work on development

Development Co-operation Report 2014: Mobilising Resources for Sustainable Development (OECD, 2014)

Informing a Data Revolution (PARIS21)

OECD Insights: From Aid to Development (OECD, 2012)