Facing interconnected global challenges and global systemic risks like climate change, biodiversity loss, pollution, pandemics, inequalities, forced displacement, and conflict, our current governance systems are proving inadequate. These systems, designed for a different era, are not fit for addressing the complexities of our interconnected world and are insufficient to anticipate and respond to future challenges. This highlights the urgent need for equipping governance and institutions for sustainable and inclusive transformation. Reinvigorating the multilateral system, a key action to be developed by the United Nations as held in the Pact for the Future, is of double importance since it will reform governance systems to renew people's trust and tackle common challenges. This chapter identifies key governance mechanisms to accelerate progress across the SDGs, catalyse a sustainable transition, and enhance preparedness for future threats and opportunities. It provides examples of successful efforts by specific countries that model good practices; it also outlines strategies to ensure that policy and actions are coherent across countries and thus guarantee effective changes to public governance as required by the SDGs.
OECD Contributions to the 2030 Agenda and Beyond
2. Governance for sustainable transformation
Abstract
The challenges countries face are not isolated, but intricately intertwined. For example, climate change exacerbates poverty and jeopardises critical infrastructure and trade; economic instability fuels social unrest and divide; and pandemics disrupt both health systems and economies. Despite all these, our governance structures often operate independently of each other, thus designing and implementing globally critical policies in a fragmented way. It is impossible for these isolated systems to address the interlinked challenges the world is facing.
Incoherent policies are costly and undermine the effectiveness of individual initiatives, lead to an inefficient use of public resources, and erode public trust in government institutions and decision-makers. For example, while governments are committed to reducing carbon emissions and have implemented policies promoting renewable energy and carbon taxes, they simultaneously may still be subsidising fossil fuels.
Social, political and economic exclusion, and related problems of inequity and inequality have important implications for development. Inequality and exclusion give those with means, resources, power or status outsized influence over policy-making and decision-making processes 1 . Distributional inequity skews the provision of essential services away from those who are most in need and distorts the way in which key developmental outcomes such as economic growth, infrastructure, health, education, water and sanitation, social welfare, justice, or security are distributed or shared. High levels of social exclusion and inequality are also associated with worse outcomes in terms of economic growth, and human and social development (OECD DAC GovNet Guidance 2024).
This understanding reinforces the importance of tackling exclusion, addressing the root causes of conflict, enhancing social cohesion, promoting gender equality and ‘setting in place mechanisms to ensure accountability’ as highlighted in the DAC Recommendation on the Humanitarian-Development-Peace Nexus.
In addition, and importantly, inclusive processes and outcomes are particularly challenged by the upsurge in autocratic modes of governance, as evidenced by several studies, including V-Dem’s Annual Democracy Report 2023 which highlights that 72% of the world’s population currently live in autocracies, compared with 46% ten years ago. Autocratic modes of governance often lead to the concentration of power and decision-making processes in the hands of a few actors – for instance, through the suppression of independent media, restrictions that diminish the enabling environment for civil society and the weakening of independent institutions (e.g., the judiciary). This leads to escalating political polarisation and disinformation, which in turn, reinforce the process of autocratisation (Papada et al., 2023[4]). 2 Autocratisation directly undermines inclusive governance by restricting participation and engagement, and eroding the quality of institutions and citizen trust. These reflections have served to produce important commitments by the DAC and its subsidiary bodies towards enabling support for civil society, free and independent public media (OECD, 2024[1]) and enabling ODA to better support inclusive governance (OECD, 2024[2]), which could inspire others.
To address these shortcomings, this chapter identifies governance methods for advancing the sustainable development transition and accelerating progress towards the SDGs. It also provides cutting-edge policy coherence practices to support the transformations needed in public governance to deliver policy reforms at the speed and scale required by the SDGs. Specifically, it presents good practices and recommendations related to:
Equipping governance and institutions for sustainable and inclusive transformation;
Developing local approaches to SDGs;
Developing suitable regulatory frameworks to help institutions adhere to SDG standards;
Ensuring information integrity to enhance the ability of governments to fulfil their responsibilities;
Strengthening the impact of development cooperation on sustainable development; and
Strengthening capacities to measure progress beyond GDP.
2.1. Equipping governance and institutions for sustainable and inclusive transformation
2.1.1. Building policy coherence systems
To achieve an inclusive transition to a sustainable future, a whole-of-government approach encompassing strategic foresight and visioning, priority setting, and implementation will be critical. Well-embedded planning practices and political leadership are key for aligning national long-term development planning, policies, budgets, and regulatory frameworks with global sustainability efforts. New ways of working, an administrative culture that promotes cross-sectoral cooperation and skilling of civil servants to adequately address interconnected policy challenges will also be essential. Strategies for sustainable transformation, including National Sustainable Development Strategies aligned to the SDGs and mainstreamed across policy domains and sectoral planning, must also outlast electoral cycles. However, steering this transformation will require careful planning to minimise trade-offs and policy tensions. To this end, establishing robust policy coherence systems is crucial.
Policy coherence systems enable public institutions and servants to collaborate where most effective, manage trade-offs across economic, social, and environmental policies, and identify and where necessary address the negative impacts of national policies that cross international borders. Policy coherence systems play a crucial role in identifying and mitigating the negative impact of domestic policies on the prospects for sustainable development in developing countries. They are also key in anticipating and addressing the long-term impacts of policies on future generations.
In this context, Policy Coherence for Sustainable Development (PCSD) provides a policy tool and approach to systematically integrate the economic, social, and environmental dimensions of sustainable development at all stages of policymaking. PCSD aims to reduce policy fragmentation; ensure policies across sectors and levels of government are mutually reinforcing in pursuing sustainable and inclusive transformation; address the negative impacts of domestic policies on other countries; and enable the evaluation of the long-term impacts of policies.
In particular, the following actions – among others - are critical to ensuring PCSD:
Developing whole of government approaches to long-term strategic foresight and visioning, priority setting and implementation - while most countries have yet to adequately incorporate considerations of transboundary and intergenerational impacts into their policies, visions, and strategic frameworks, there are also numerous instances of pioneering efforts various countries have undertaken to enhance PCSD in other crucial areas. Italy, for example, has developed a National Action Plan for Policy Coherence for Sustainable Development (PCSD NAP) with the support of the OECD. The PCSD NAP outlines measures for embedding sustainability in all government decisions and provides the structures and systems to help mitigate trade-offs between sectors and enable the identification of priorities for future generations as well as potential impacts on other countries. The implementation of PCSD measures via the NAP has led to the development of tools such as Policy Coherence Matrixes and dashboards that map existing and future policies in relation to the National Sustainable Development Strategy (NSDS) and help break down sectoral silos (OECD, 2022[3]). In Africa, the OECD has been collaborating closely with the African Peer Review Mechanism (APRM) to support countries in the region in aligning priorities towards the 2030 Agenda and the African Union (AU) Agenda 2063. This partnership has been instrumental in supporting policymakers, practitioners and other stakeholders in Kenya, Ghana, Namibia and South Africa to assess strengths and weaknesses in their existing national institutional mechanisms for promoting policy coherence, identify options for strengthening capacities in addressing trade-offs and maximising synergies, and formulate policy options for promoting a more integrated implementation of the 2030 Agenda and Agenda 2063 for Africa.
Addressing policy actions across sectors and levels of government - numerous countries have set up policy instruments and tools to integrate sustainable development into their planning processes. However, these implementation efforts frequently remain disconnected from their primary policy agendas. For example, according to OECD analysis, in many countries the SDGs or sustainability priorities have not been integrated into fundamental governance mechanisms such as budgeting processes and public procurement systems. Institutionally, the enhancement of PCSD requires robust coordination and communication across all government levels coupled with effective stakeholder engagement. While many governments are committed to align their policies with the SDGs and have set up coordination mechanisms accordingly, OECD analysis indicates that many countries continue to encounter challenges in managing trade-offs and policy conflicts.
Addressing transboundary policy impacts
National policies can significantly impact well-being and sustainable development not only domestically, but also internationally. These effects are governed by the flows of goods, services, financial resources, and people. They can be both positive and negative, for instance trade policies that create market access, or energy policies that exacerbate climate change. Out of the 169 targets set by the SDGs, 91 involve such cross-border elements (OECD, 2019[4]). Policy coherence issues can also arise in potential trade-offs between promoting energy security and the diversification of energy sources and addressing food security. For example, in the case of an extreme weather shock, price increases for agricultural commodities could be mitigated by reducing demand for non-food uses such as biofuels (OECD, Forthcoming[5]). However, OECD analysis indicates that numerous countries encounter substantial challenges in assessing the transboundary impacts of their policies and in particular the impact on developing countries (OECD, forthcoming[6]). The European Green Deal exemplifies how efforts to support the green transition can have international as well as domestic implications. Within the EU Green Deal, the EU Carbon Border Adjustment Mechanism (CBAM), the world's first ever price charged on the carbon content of imported goods in selected energy intensive and trade exposed industries aimed at mitigating carbon leakage, may have heterogenous impacts on developing countries. This mechanism, which intends to impose a carbon price on certain imported goods such as iron and steel, cement, fertilisers, electricity and aluminium, could render entire industries and sectors in developing countries uncompetitive for export, with dire consequences for jobs, economic growth and poverty. This illustrates the need for a global just transition to consider the impact of climate policy making in advanced economies across borders in order to avoid any unintended consequences on developing countries (OECD, 2022[7]). The CBAM could result in a decrease in exports from Africa to the EU in aluminium by up to 13.9%, iron and steel by 8.2%, fertiliser by 3.9% and cement by 3.1%, although some of these exports would be diverted to other destinations including China and India. GDP and income across the African continent could be reduced by 0.5% (under a scenario limited CBAM coverage with a carbon price of EUR 40 per tonne) (The African Climate Foundation/LSE, 2023[8]). The lack of both qualitative and quantitative analysis of cross-national impacts coupled with inadequate political backing are major hurdles that many countries face in translating their political commitment to PCSD into action. However, there are also many effective practices in place. These include the enhancement of regulatory impact assessments that consider effects on developing countries; systematic co-ordination between foreign and technical ministries; consultation of stakeholders with development expertise in domestic policy making, and monitoring progress and policy change publicly. Luxembourg for example has made significant efforts on the monitoring, evaluation and reporting of PCSD. The government has introduced the Sustainability Check, a tool for supporting and self-assessing draft laws in relation to their impact on sustainable development. This tool improves ownership of the general sustainable development policy and Luxembourg’s National Plan for Sustainable Development. It is used to clarify potential trade-offs and take into account potential transboundary impacts. By introducing it at an early stage in the drafting of legislation, it not only helps to advance the cross-cutting theme of sustainable development, but also ensures enhanced policy coherence and improved quality of legislation (OECD, 2018[9]).
Fighting corruption and illicit financial flows
Anti-corruption efforts and combating illicit financial flows are foundational to governance and PCSD. Corruption hampers effective policy implementation, while illicit finance leads to unlawful outflows from countries, diverting resources crucial for development priorities. Corruption and illicit financial flows disproportionately affect vulnerable populations. The costs associated with bribery alone are estimated at USD 1.2 to USD 1.5 trillion annually (IMF, 2016[10]), highlighting the substantial financial leakage that undermines development efforts. Addressing these issues is crucial not only to prevent resource wastage but also to build investor confidence and attract financing for sustainable development, which is urgently needed given the USD 4 trillion per year financing gap identified by UNCTAD for achieving the SDGs in developing countries (UNCTAD, 2022[11]). The upcoming Fourth International Conference on Financing for Development in 2025 will underscore the importance of tackling corruption and illicit finance as a central element of international policy action.
Moreover, combating corruption and promoting integrity are fundamental to fostering democratic and inclusive societies. Corruption erodes trust in government and weakens public service delivery, disproportionately impacting marginalised groups such as low-income communities, women, and youth. Recognising these challenges, the Development Assistance Committee (DAC) has prioritised anti-corruption measures, committing to enhancing development outcomes by addressing corruption's enablers and transnational impacts. The DAC's efforts include implementing the 2016 Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption and publishing policy guidance on mitigating illicit financial flows in sectors like oil commodity trading (OECD, 2023[12]).This collaborative approach within the OECD ensures policy coherence and strengthens international efforts to promote transparency and accountability in global development financing.
2.2. Adopting a territorial approach to the SDGs
Regional and local governments play a pivotal role in delivering the 17 SDGs, with responsibilities over education, social welfare, healthcare, water access, housing, transportation, infrastructure, land management, local economic growth, environmental stewardship and climate action. According to the OECD-UCLG World Observatory on Subnational Government Finance and Investment (SNG-WOFI, n.d.[13]), covering 135 countries, subnational governments (SNGs) contribute 21.5% of total public spending and 8.3% of global GDP, while also driving nearly 40% of public investments (OECD, 2022[14]). As a result, achieving the SDGs depends on progress made at the regional and local levels.
If implemented effectively, the SDGs provide a practical tool to overcome the limitations of sector-based planning for urban and regional development, facilitating a shift from a divided to a more integrated, multi-sectoral approach in the formulation and implementation of strategies and policies (OECD, 2020[15])1. For example, when expanding public transport to reduce inequalities by making mobility more affordable, accessible, and less polluting, cities and regions can also benefit public health by lowering exposure to particulate matter, upgrading cycling infrastructure to provide low-emission mobility options, and increasing car-sharing supply. Tools and mechanisms of Multi-Level Governance might prove useful to ensure the correlation between nationally designed objectives and their local implementation.
Various cities and regions use the SDGs as a framework to address interlinkages in their policies and strategies. The municipality of Kópavogur, Iceland, is introducing an urban plan that integrates a local strategy targeting 36 SDGs and promoting denser development instead of urban sprawl. To address climate change and preserve green spaces for carbon capture, Kópavogur is also encouraging a shift from the use of private cars to public transport. Enhancing bike lanes and walking paths aligns with the young demographic, supporting health (SDG 3) and social equity (SDG 10) through more accessible mobility options (OECD, 2022[16]).
To successfully manage potential trade-offs, such as balancing the economic costs of the green transition with job losses in traditional industries and uneven access to green technologies like energy-efficient appliances or electric cars, it is crucial to integrate and balance green growth objectives with social and economic sustainability objectives. The SDGs can guide this process. For example, developing new green industrial sectors (SDG 9) can facilitate cooperation between the private and research sectors (SDG 13), thereby promoting job creation (SDG 8) and educational opportunities (SDG 4).
The city of Kitakyushu, Japan, uses the SDGs to explicitly link environmental, social and economic goals through offshore wind power generation, ecotourism and culture. These sectors can attract youth, provide job opportunities, and promote social cohesion through intergenerational solidarity and gender equality. (OECD, 2022[16]). The state of Paraná, Brazil has harnessed the SDGs to mitigate territorial disparities, aligning its 2020-2023 Multi-Year Plan with the 2030 Agenda and fostering the exchange of exemplary practices among municipalities at varying stages of development (OECD, 2021[17]).
2.2.1. Aligning public investments with the achievement of the SDGs at national and sub-national level
Choices made today about public investments will have impacts for decades to come. As such, it is vital to leverage the strategic importance of public investments in support of a better future for all. Public investments can act as a catalyst for additional investments from private and other sectors. To contribute to the achievement of the SDGs, public investments should align with the principles enshrined in the 2030 Agenda for Sustainable Development, including “Leaving No One Behind”, universality, inclusiveness, interconnectedness, multistakeholder partnership. In practice, this means prioritising investments that are universally beneficial and that recognise the interconnectedness of the environmental, social, and economic aspects of sustainable development. It also means ensuring the adoption of gender-responsive budgeting to ensure no one is left behind, in alignment with SDG 5.c.1 on the “Proportion of countries with systems to track and make public allocations for gender equality and women’s empowerment”.
A case in point is public investment in critical infrastructure. In the context of a warming planet, choices made today about infrastructure provision will have far-reaching impacts. Infrastructure and climate resilience are closely linked, with climate change posing direct and indirect risks to infrastructure assets and service provision, and some infrastructure assets risking exacerbating climate-related risks (OECD, 2024[18]). Therefore, it is vital to build resilience rather than lock in vulnerability. This means that infrastructure should be planned, designed, built, and operated in ways that anticipate, prepare for, and adapt to a changing climate.
The recent OECD report Infrastructure for a Climate-Resilient Future highlights how national, regional, and local governments can collaborate with stakeholders to assess local needs and integrate them into their policies for more resilient infrastructure and more efficient implementation of systems to align climate resilience responses (OECD, 2024[18]). Governments should increase subnational government capacity, including financing, to ensure regions and cities have long-term funding to respond to climate change (OECD, 2022[19]; OECD, 2023[20]). Regional and local governments are already important investors in climate-resilient infrastructure and were responsible for 69% of climate-significant public investment in OECD and EU countries in 2019 (OECD, 2022[21]). The report outlines how these subnational governments can adopt new funding approaches and better mobilise climate financing to help plan, deliver, and maintain local climate-resilient infrastructure.
Another strategy to foster sustainable development is to integrate criteria to ensure the sustainability of acquisitions through public procurement – that is, government purchasing of goods and services – to achieve economic, social, and environmental outcomes aligned with the SDGs. Public procurement offices must adopt new rules and regulations and be trained on the benefits of sustainable public procurement for it to be successfully implemented.
In the city of Bonn, Germany, public procurement plays an important role in its Sustainability Strategy. The city administration employs a ‘fair procurement’ practice, which applies Fair Trade principles to public procurement. The city signed a resolution to only serve Fair Trade goods in official meetings and procured Fair Trade workwear for all employees of the Office for Green Spaces and Parks (OECD, 2022[16]).
The misalignment of spending with SDGs objectives and the lack of sufficient funding for the implementation of the SDGs are a challenge for local and regional governments. One solution is to include the consideration of SDGs in all budgeting processes. This can help ensure that adequate resources are allocated for the implementation of the 2030 Agenda and foster policy continuity across political cycles. The OECD toolkit for A Territorial Approach to the SDGs (OECD, 2022[16]) showcases how different cities and regions around the world have already began using SDG budgeting as a key lever to channel funds towards the 2030 Agenda. Adopting green budgeting approaches at the regional and local levels can also help to better align subnational expenditure and revenues with green and environmental objectives (OECD, 2022[22]).
In the city of Mannheim, Germany, the 2022-23 budget cycle is based on the Mannheim 2030 city strategy and the SDGs. The city reports how much is spent on SDG-related initiatives, such as education or the environment. Mannheim integrates impact and performance targets into budget documents, including specific indicators for strategic objectives linked to the SDGs. Similarly, in the Basque Country, Spain, the regional government conducts an annual assessment of how much of their budget was spent on each SDG and informs policymakers with a detailed breakdown (OECD, 2022[16]).
2.2.2. Managing emerging critical risks
The global risk landscape is rapidly evolving due to interconnected economies, societies, and technologies. These changes will also increase the complexity of crises, exposing gaps in knowledge, assigned responsibility, authorities to act, and capabilities to respond and recover. To manage emerging critical risks, governments must anticipate, understand, and address these risks, which are transboundary, highly uncertain, and systemic. The OECD's Framework on Management of Emerging Critical Risks (OECD, 2024[23]) outlines a seven-step repeatable process for managing such risks. Implementing this process can help to integrate the management of these emerging risks into traditional risk management processes, fostering resilience against current and future challenges. It provides a structured process for governments to validate identified gaps in knowledge, authorities and capabilities needed to manage emerging risks and to validate plans for building-in flexibility and adaptability to unforeseen or poorly understood risks.
2.3. Developing a suitable regulatory framework
Achieving the SDGs requires their integration across the different stages of the rule-making process, from the initial design of laws and regulations, through their effective and efficient implementation, to their periodic revision. Regulation, alongside fiscal and monetary policy, can facilitate the achievement of the SDGs while encouraging technological innovation and promoting economic growth. Despite being historically focused on mitigating economic costs and administrative burdens, the role of better regulation in supporting governments pursue the SDGs is being increasingly acknowledged, albeit with less consistent implementation in practice (OECD, 2023[24]).
To successfully leverage regulation in support of the 2030 Agenda, governments must strengthen the institutions that develop and monitor regulations to ensure that relevant instruments, processes and institutions support risk-based approaches while fostering international regulatory co-operation.
2.3.1. Aligning regulatory frameworks to the SDGs
Regulating with people is fundamental to regulating for them. People have a clear stake in sustainability issues, including environmental and social policies. At the same time, businesses and interest groups can provide valuable data and feedback to inform the different stages of the regulatory cycle (OECD, 2023[24]). Engagement in rulemaking therefore matters for trust in government (Smid, 2023[25]).
Governments need to make sure that their regulatory frameworks incorporate appropriate mechanisms for systematically engaging with relevant stakeholders at all stages of the regulatory policy cycle. In addition, most SDGs require international co-operation as the policy issues they address go beyond national borders. In this sense, engaging all affected parties may require governments to consider engaging with foreign stakeholders.
As many of the issues addressed by the SDGs impact minorities and marginalised groups in society disproportionately, engaging vulnerable groups, including for instance indigenous populations, in a targeted manner allows governments to harness local knowledge and address their needs. Engaging civil society will also help to fine-tune regulations to local realities (OECD, 2016[26]).
To address environmental concerns, for example, governments make use of innovative forms of public participation, such as deliberative processes (e.g. citizen assemblies and panels) to bring together groups of citizens broadly representative of society to tackle challenging policy issues such as the climate transition (OECD, 2020[27]).
In France, for instance, the Citizens’ Convention on Climate was a deliberative process that brought together 150 citizen representatives, selected via civic lottery, for seven weekends over six months. The process was designed to give citizens an opportunity to help define a range of measures that will enable France to reduce its greenhouse gas emissions by at least 40% by 2030 (compared to 1990 levels) in a socially just and equitable way. After extensive deliberation, citizens have prepared a list of 149 measures for the French government.
2.3.2. Implementing regulations to support the SDGs
Appropriate regulatory delivery is essential to manage public hazards and close the compliance gap with regulations to achieve the SDGs. “Regulatory delivery” refers to the implementation phase of the regulatory governance cycle, which has four main stages: the development of public policy and choice of instruments; design of new regulation (or review of the existing one); implementation of regulation; and monitoring and evaluation of its effects. Delivery covers the implementation (e.g., permitting and licensing applications), monitoring (e.g., market surveillance), supervision (e.g., inspections, self-reported compliance) and enforcement (e.g., sanctions, corrective measures) of regulations.
Regulatory delivery represents an important opportunity to reduce the burden of complying with regulations imposed on businesses and citizens while saving public resources. To illustrate, Box 2.1 showcases OECD work supporting the development of large-scale food fortification to combat micronutrient malnutrition through better regulatory governance. This work contributes to enhancing evidence around ways to deliver sound regulatory governance in areas key for accelerating the SDGs.
Box 2.1. Strengthening regulatory governance of large-scale food fortification
Food fortification is one of the most cost-effective interventions to combat micronutrient malnutrition, a key driver of poverty and inequality, affecting over 2 billion people, including 1 in 2 pre-school age children and 2 in 3 women aged 15-49 globally.
Food fortification involves adding essential micronutrients such as vitamin A and D, iodine, iron, folic acid, and zinc to widely consumed foods such as flour, oil, rice, or salt during processing, allowing to target the population at large without requiring dietary changes. Large-scale food fortification directly contributes to a range of SDGs:
SDG 1 (No Poverty), by contributing to improving labour productivity caused by anaemia; when fortified foods are provided as part of social safety nets, they can specifically benefit the most vulnerable, thus contributing to closing the poverty gap.
SDG 2 (Zero Hunger), by reducing the prevalence of micronutrient deficiencies and contributing to improve the quality of nutrient intake.
SDG 3 (Good Health and Well-Being), by reducing the risk of birth defects of the brain and spine, maternal and perinatal mortality, and low birth-weight infants. Food fortification has proven effective at reducing the prevalence of both infectious and non-communicable diseases.
SDG 4 (Quality Education), through the positive impacts of iron interventions on tests of cognitive and motor development and improvements in educational achievements.
SDG 5 (Gender Equality), by reducing anaemia rates which are often higher in females.
SDG 17 (Partnerships for the Goals) by promoting effective cooperation between public institutions and regulatory authorities, the food industry, and the civil society.
Regulatory governance of food fortification often falls short, hindering the effectiveness of interventions seeking to combat micronutrient malnutrition worldwide. In this context, the OECD has identified six pillars of sound regulatory governance of food fortification, from design to delivery:
Figure 2.1. Regulatory Governance of Large-Scale Food Fortification
Source: Author’s own elaboration
2.3.3. Reviewing regulations for the achievement of the SDGs
Even when regulations are rigorously tested before being introduced or amended, not all their effects can be determined with certainty. The regulatory process is inherently experimental (OECD, 2018[28]). Markets and technologies evolve, and societal preferences, values, and behaviours change over time. Moreover, the accumulation of regulations over time can lead to interactions that exacerbate costs, reduce benefits, or have other unintended consequences (OECD, 2018[28]). This is where the importance of "ex-post evaluations” – which help to assess whether laws are working as originally intended and, if not, to propose improvements – becomes evident.
Yet in many countries, ex-post evaluations fail to take on a “system-wide” approach (OECD, 2021[29]). Evaluations often focus on the marginal impacts anticipated in the ex-ante impact assessment – a procedure that analyses the potential effects of a new law before its adoption – and neglect the assessment of indirect or second order impacts that could be more severe. In addition, evaluations of individual regulations are not always complemented with sector-wide reviews that assess the impact of regulations in each sector (e.g., transport, agriculture) on sustainability and the SDGs. The cumulative effect of those regulations is therefore not considered (OECD, 2020[30]).
Adopting measures to ensure that regulations, once in place, remain effective, encourage investment in innovation, and continue to support the SDGs is key. Balancing competing objectives and trade-offs in this regard is a particular challenge for policymakers. A regulatory framework to coherently pursue the SDGs will require a paradigm shift in regulatory policy and governance, moving away from the traditional “regulate and forget” towards an “adapt and learn” approach (OECD, 2023[24]).
Mainstreaming SDGs in regulatory design
Regulatory impact assessment (RIA) critically analyses the positive and negative effects of proposed and existing regulations and non-regulatory alternatives. RIA is important to prevent regulatory failure by helping to illustrate when there is no case for regulating, when there is a clear need, or when there are key risks (OECD, 2012[31]). RIA helps rule-makers identify the most impactful regulatory or non-regulatory approach that best positions the government to deliver on its promises.
Systematically assessing various social, economic, and environmental impacts within the RIA process is essential to ensuring policy coherence for sustainable development. However, OECD data shows that economic concerns continue to take precedent over social or environmental considerations in rulemaking, and that governments continue to face various challenges in designing and implementing regulations (OECD, 2021[29]). A lack of policy coherence, transparency, and effectiveness in regulatory design means that regulations may not be effective in addressing the SDGs in a consistent manner or adequately balance competing economic, social, and environmental objectives and trade-offs. Moreover, challenges related to the SDGs such as environmental pollution, climate change and biodiversity loss are global problems that trespass national boundaries. To effectively address these issues, it is important to build capacities to assess potential transboundary international impacts of proposed rules already at the design stage through RIA.
To address these challenges, various OECD members have started to implement “sustainability checks” as part of their RIA process. For instance, Germany has introduced an electronic sustainability impact assessment tool called eNAP (elektronische Nachhaltigkeitsprüfung) which is now mandatory for all new legislation and policies. eNAP is a very user-friendly online tool, which provides information related to the SDGs, such as data on sustainable development indicators from the German Statistical Office, to help policymakers.
In the Netherlands, the regulatory policy cycle includes a “policy compass” mechanism to assess the impacts of all draft policies from a sustainability perspective. The use of the compass helps policymakers to co-operate with stakeholders, consider all relevant quality standards, and explore different policy options. The analysis of policy goals is structured across different levels, including strategic goals, specific objectives, and desired behaviours. For each of these levels, a detailed examination of their impact on the SDGs is provided. Potential consequences are also analysed under a sustainability approach and indicators of impacts on human well-being are separated into categories of “here and now”, “later,” and “elsewhere.”
2.3.4. Strengthening regulatory cooperation for addressing global challenges
Most SDGs require international co-operation as the issues they address cross national borders. To effectively address these threats, regulatory action will have to be coherent and – at times – joint between countries as well as between different levels of government (OECD, 2023[24]). International regulatory co-operation (IRC) allows countries to exchange regulatory experiences, learn from each other, ensure coherent approaches and, when possible, adopt joint regulatory approaches. It is essential to ensure the effectiveness of regulations, lower administrative costs, and reduce unnecessary burdens on international trade and financial flows (OECD, 2021[32]).
In addition, using risk-based and adaptive approaches to regulating is important for accelerating progress towards the SDGs and can encourage innovation, green investment, and economic growth by increasing cross-sectoral feelings of policy ownership and mutual benefit. For example, making use of flexible outcome-focused regulatory design enables economic actors to choose the best way for them to meet SDG requirements and thus can enhance innovation and compliance. Creating regulations that address the goals economic actors want to achieve and the risks they aim to prevent can also foster practices that are balanced in relation to a regulation’s anticipated impacts (OECD, 2023[24]). Box 2.2 illustrates OECD work in support of a supervisory framework on nature-related risks for financial authorities to identify and manage financial risks stemming from biodiversity and nature-related loss. This work contributes to enhancing evidence around ways to strengthen regulation to address the risks that economic actors want to prevent.
Box 2.2. Supervisory framework on nature-related risks for financial authorities to identify and manage financial risks stemming from biodiversity and nature-related loss
Biodiversity loss and broader environmental degradation pose significant risks to the world economy and subsequently may be material for the financial sector to assess. However, only a few central banks and financial supervisors have conducted preliminary studies to determine nature-related financial risks and their potential impact on maintaining price and financial stability.
An integrated approach is required for the assessment of these risks and their relevance for the financial system. One key mechanism for integrating nature-related considerations into financial markets is through the regulatory frameworks – also known as prudential frameworks – that central banks and financial supervisors use to assess the financial safety and stability of institutions. These include inflation forecasting, asset purchase programmes, financial stability monitoring activities, and financial supervision.
Given the need for central banks and financial supervisors to start accounting for nature-related financial risks, the OECD has developed a supervisory framework providing technical guidance to help these authorities undertake assessments of the nature-related risks that may impact an institution’s financial performance. The framework follows a four-step approach to identify, prioritise, and assess different nature-related financial risks. These four steps include:
A risk identification and prioritisation process
An economic risk assessment
A financial risk assessment
Supervisory considerations
Source: Author’s own elaboration
2.4. Ensuring information integrity to enhance the ability of governments to fulfil their responsibilities
The digital transformation has reshaped how people interact and engage with information, with anyone with an Internet connection able to produce and distribute information. While this offers unprecedented access to knowledge and can foster citizen engagement and innovative news reporting, it also provides fertile ground for the rapid spread of false and misleading information, with potential implications for the public sector.
False and misleading information can cast doubt on factual evidence, jeopardise the implementation of public policies, and undermine people’s trust in the integrity of democratic processes and institutions. Changes in the information space also undermine the ability of citizens to access local, quality, and independent journalism, which faces increasing financial pressures and changes in media ownership while carrying out operations in high-risk environments. Moreover, new technologies are often designed to respond to the psychological and behavioural drivers that underpin how people search for, process, and consume information. This reality enables the uptake and reinforcement of untruths as false beliefs, leaving little room for accurate (Lesher, Pawelec and Desai, 2022[33]).
Generative AI tools can amplify the scale and scope of false and misleading information. The rapid propagation of AI-generated synthetic images and deepfakes, which are difficult to distinguish from human-generated ones, challenges traditional methods used to combat disinformation, such as fact-checking. In 2022, 50% of individuals in a study were already incapable of differentiating AI from human-generated news (Lorenz, Perset and Berryhill, 2023[34]).
Many countries have started examining the adequacy of existing policies and institutions to effectively address the current and future realities of a rapidly evolving information environment. To support this effort, the OECD has developed an analytical framework aimed at strengthening information integrity by examining three complementary policy dimensions:
Implementing policies to enhance the transparency, accountability, and plurality of information sources: This includes promoting policies that support a diverse and independent media sector, with an emphasis on local journalism. Policies should also aim to increase the degree of accountability and transparency of online platforms to counter their incentives to pursue commercial interests while disregarding their potential as conduits for misinformation.
Fostering societal resilience to disinformation: This involves empowering individuals to develop critical thinking skills to recognise and combat disinformation, including how to engage with new digital technologies, such as generative AI. It also means mobilising all sectors of society to develop comprehensive and evidence-based policies in support of information integrity.
Upgrading governance measures and public institutions to uphold the integrity of the information space: This involves the development and implementation of regulatory capacities, strategic frameworks, capacity-building programmes, and methods to coordinate these efforts to promote a coherent approach to strengthening information integrity within public administrations while ensuring clear mandates and respect for fundamental freedoms. It also involves promoting peer-learning and international co-operation between democracies facing similar disinformation threats.
2.5. Enabling inclusive governance, enhancing access to justice and promoting people-centred justice systems
Yet, despite significant advances in justice system reforms in recent years, improvements have been uneven, and according to estimates by the Task Force on Justice, more than 5.1 billion people worldwide still lacked meaningful access to justice.
Furthermore, recent digital advancements and evolving societal expectations have reshaped the landscape of justice delivery, presenting both opportunities and challenges in promoting equitable access. In this context, countries are increasingly embracing the concept of people-centered justice which emphasises placing people at the heart of legal and justice systems, tailoring legal and justice processes and services to meet the diverse needs and expectations of different groups of people, fostering trust in the justice sector, and promoting a culture of legal empowerment. By prioritising transparency, accountability, and responsiveness, people-centered justice frameworks strive to enhance public confidence in the fairness and effectiveness of legal and justice institutions (OECD, 2021[35]).
In line with the OECD Recommendation on Access to Justice and People-centred Justice Systems, efforts to enhance access to justice and promote people-centered legal systems encompass several key dimensions:
Strengthening institutional capacity to deliver people-centred justice through developing people-centred justice purpose and culture based on evidence of legal needs to different groups of the population, as in Canada and implementing continuous monitoring and evaluation frameworks to assess service and policy effectiveness and inform ongoing improvements (OECD, 2021[35]). This should also include robust governance arrangements, including utilising technology and data to bring justice closer to the people, such as Estonia's e-justice platform provides comprehensive online legal services, enhancing accessibility and efficiency.
Expanding access to legal and justice services by reducing systemic barriers such as those related to geographic distance, financial constraints, and language through innovative service delivery models, including virtual legal aid clinics and mobile justice platforms. Colombia’s mobile justice units exemplify this approach, reaching remote and rural areas to provide essential legal services. Emphasising community-based approaches ensures that legal assistance is accessible and responsive to local needs. Service delivery strategies should recognise the diverse experiences and challenges faced by marginalised groups, including women, children, minorities, and persons with disabilities.
Empowering individuals through legal literacy by promoting legal education and awareness empowers individuals to understand their rights, navigate legal processes, and make informed decisions. Educational initiatives, including school-based legal literacy programs and public awareness campaigns, play a crucial role in fostering a culture of legal empowerment and proactive engagement with justice systems. For example, Australia's Community Legal Centres effectively combine legal assistance with community education, enhancing public understanding of legal rights and processes.
2.6. Strengthening global development co-operation
Sustainable, long-term development hinges upon countries’ capacities to implement their sustainable development agendas through their own institutions and systems. It also relies on the adoption of whole-of-society approaches rooted in multi-stakeholder engagement and dialogue as well as parliamentary oversight on national development efforts. The achievement of sustainable, long-term development further necessitates a commitment to transparency as a precondition to build trust and accountability, as well as to the SDG concept of “Leaving No One Behind” (LNOB), including through setting targets, collecting data, and monitoring results in an inclusive manner.
Therefore, the foundation for achieving the ambitions of the 2030 Agenda lies in strong and inclusive partnerships. For example, triangular co-operation, which operates on the principle that all partners bring valuable experiences and expertise when addressing a development challenge, serves as a bridge between South-South and North-South co-operation. Furthermore, it acknowledges that all partners have something to learn in a co-operation project. It fosters trust among diverse partners, facilitates the sharing of local knowledge, drives innovative solutions, leverages additional resources, and promotes technical diplomacy. Triangular co-operation has proven to be an effective tool to tap into the wealth of experiences and innovations that are needed to achieve the SDGs as it has already delivered high impact results in issues such as climate change, gender equality, and pandemic preparedness.
These elements are distilled into the four principles of effective development co-operation (Global Partnership for Effective Development Co-operation, n.d.[36]):
Country ownership;
A focus on results;
Inclusive partnerships; and
And transparency and mutual accountability.
Members of the OECD DAC have committed to these effectiveness principles and strive to enhance the quality, impact, and effectiveness of development co-operation, and to supporting partner countries to collectively achieve sustainable development. The DAC’s ambition to fulfil its partnership commitments with all development stakeholders bears the potential to accelerate SDG progress, restore trust, and overcome international divides.
The commitment to increasing the inclusiveness and effectiveness of development co-operation recognises how national planning and oversight mechanisms rely on broad-based, multi-stakeholder efforts involving all UN member states and non-sovereign development actors alike. In collaboration with UNDP and UNDCO, the OECD supports the Global Partnership for Effective Development Co-operation (GPEDC)2, the primary multi-stakeholder platform for driving all types of development co-operation to deliver sustainable development. The insights generated through the GPEDC monitoring exercise provide participating UN stakeholders with actionable information on development effectiveness at the country level that can also build trust through country ownership of projects.
Box 2.3. Aligning development co-operation to SDG impact will require better approaches
The Sustainable Development Goals (SDGs) provide a common roadmap for more effective development. The OECD partnered with 11 governments from around the world, and over 60 bilateral and multilateral development partners, to reveal that, while the collective adoption of the SDG framework in development co-operation would have maximised the development impact of the limited development finance available, uptake has been slow and challenging.
Slow, uneven and imperfect adoption of the SDG framework in development co-operation
Most development co-operation providers use SDGs to frame development policies and overarching ambitions, but progress in targeting specific SDG results remains limited. As of 2022, only about 30% of providers could report on their contributions and impact on (some) SDGs. Understanding SDG interlinkages and applying integrated approaches is also rare, leading to fragmented efforts to monitor SDG impact. After a decade, SDG data quality and timeliness at the country and global levels still needs improvement.
Looking forward, policymakers should frame SDG support by adopting six strategic actions:
1. Promote SDG results from the top: Leadership in development co-operation ministries and agencies should communicate SDG alignment benefits and set clear country or organisational goals.
2. Invest in organisational transformation: Policymakers should provide resources and incentives to adapt management processes for SDG integration.
3. Adapt alignment strategies to each country: Development institutions should synchronise with country-led national strategies and frameworks, reinforcing harmonisation and ownership.
4. Support SDG mainstreaming efforts: Development institutions should collaborate with partner governments to realign their policies, financing, and monitoring systems.
5. Invest in country-led SDG data: Use national and local data for joint progress monitoring, avoiding as much parallel data collection solely for internal reporting.
6. Build partnerships around specific SDG results: International partners should actively look to co-design, co-finance, and jointly implement programs supporting SDG outcomes.
These actions aim to translate political commitments into tangible SDG impact. By addressing these challenges, development co-operation can accelerate the achievement of sustainable development results, fostering a more integrated and effective approach to global challenges. The OECD toolkit, Impact by Design, provides practical advice to strengthen the focus and impact on sustainable development (OECD, 2023[37]).
Source: (OECD, 2023[38]), (OECD, 2021[39])
At a time of overlapping, concurring crises, the achievement of the 2030 Agenda requires a commitment to the application of principles of effective development across all types of development co-operation. This includes all efforts for climate action, in line with the statement on effectiveness lessons for more impact climate action in development co-operation (Global Partnership for Effective Development Co-operation, 2021[40]). Effective development co-operation can and must enable net-zero and climate-resilient pathways through its strong focus on country ownership. Each government must be equipped to set its own national plans and priorities for climate mitigation, adaptation, and resilience while guided by globally agreed objectives.
The green transition, like other transitions, disrupts patterns of production and consumption with particularly severe impacts on low- and middle-income countries. To ensure that benefits are equitably shared and those negatively affected are compensated, green transitions must consider country-specific factors, such as economic structures, productive capacity, relative vulnerability to climate change, fiscal constraints, income and carbon inequality, informal employment, and social aspects such as human rights, gender equality, the rights of indigenous peoples and the need for social and environmental safeguards. This underscores the complexity of navigating each transition and highlights the need for nuanced and context-specific approaches. The 2024 OECD Development Co-operation Report highlights how international development co-operation can reconcile the objectives of poverty and inequality reduction and the green transition by presenting recommendations across key policy areas. For example, bolstering policies and investments in social protection systems is key for promoting just transitions that tackle poverty and inequalities, as they play both a preventive and protective function and enhance resilience against shocks. If managed well, green transitions present opportunities to accelerate the fight against poverty and inequalities.
Although the multidimensionality of development has gained wide consensus, this has not yet translated into concrete tools. These are necessary to avoid the risk of asymmetric transitions – for example green transitions that create further social asymmetries by providing clean energy technologies that facilitate work or transportation opportunities but are too expensive to be accessible to all but the wealthiest members of a population. Development co-operation actors must identify and mitigate these risks while leveraging the opportunities of these processes for greater impact on poverty and inequality reduction. Development co-operation can play a fundamental role in promoting adequate and sustainable social protection systems as levers for just green transitions. New implementation mechanisms, like country or region-led platforms for international co-operation and investments instead of donor-led platforms, could be scaled up to level the playing field (OECD, 2023[41]).
This is the case, for example, of the African Union’s experience of Team Africa, an initiative promoting a whole-of-society approach to development initiatives. This initiative promotes regional ownership by bringing together member states, civil society, organisations, academia, and the private sector to advance the African Union’s 2063 Agenda (AUDA-NEPAD, 2023[42]).
The green, energy, digital, and other modern transitions may also be addressed by identifying where policy objectives across these transitions align (OECD, 2023[41]). Take the Social Protection and Public Finance Management project, which is funded by the EU and implemented jointly in 24 countries of Latin America, Africa, and Asia with the International Labour Organization (ILO), UNICEF and the Global Coalition for Social Protection Floors (ILO, 2023[43]). The project aims to address the green transition while strengthening social protection systems at a national level and ensuring sustainable financing.
In Senegal, the project achieved a successful alignment of the social and green transitions when the government reduced subsidies on electricity, diesel, and fuel to reallocate them to social sectors supporting vulnerable households (ILO, 2023[43]). Senegal’s family security grant was notably increased by 20%.
2.6.1. Supporting locally led development co-operation
Multiplying crises and geopolitical considerations have disrupted traditional development co-operation delivery models, underscoring the need for increased effectiveness and local relevance. At the same time, critical voices against perceived racism and colonisation have highlighted the urgent need to address the power imbalances that hinder local leadership, ownership, and legitimacy (OECD, 2023[44]). Additionally, in many countries the essential contributions to development of civil society actors are under threat (OECD, 2020[45]).
In this context, progress in achieving locally led development cooperation has been slow, and the international community is called to take a stronger stance on building more equitable and inclusive partnerships and strengthening civic space at home and in partner countries. Nevertheless, from 2015 to 2021, decentralised development co-operation (DDC) financial flows reported as ODA saw a substantial increase, although this varied significantly between countries. The total recorded volumes grew by nearly 40%, reaching USD 2,831 million in 2021. This represented 3.6% of total official development assistance (ODA) in 2021, up from 3.3% in 2015 (OECD, 2023[46]).
Guidance for practitioners shows how DDC can promote mutual benefits and peer-to-peer learning, bring development co-operation closer to people and their daily lives, deliver technical services and expertise to implement the SDGs. By providing a repository of good practices and guidance on implementation modalities, the toolkit seeks to promote policy dialogue and mutual learning across DDC actors and to enhance DDC effectiveness, efficiency and impact worldwide (OECD, 2023[46]). Subnational entities mainly engage in activities where their comparative advantages and competencies lie. DDC increasingly includes non-financial partnerships fostering peer-to-peer learning activities, knowledge exchange, capacity building and exchange of experiences and best practices amongst subnational actors in policy areas such as health, food security, education, gender, water and waste management, amongst others (OECD, 2023[46]). Peer-to-peer learning can be a valuable tool for cities and regions to learn from each other’s successes and obstacles and enable a return on investment for all parties. Recognising the increasing significance of non-financial and in-kind contributions in DDC is essential for fully understanding the diversity and importance of DDC modalities and approaches. These in-kind contributions are often underreported in ODA flows because many regions, especially municipalities engaged in non-financial DDC partnerships, lack the capacity and resources to report on these projects or do not yet see the value in doing so (OECD, 2023[46]).
Furthermore, the OECD DAC’s Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance provides a standard to guide and incentivise development co-operation providers in advancing policies and practices that reinforce the roles, effectiveness, and potential impact of civil society while protecting civic space (OECD, 2021[47]) . The actions providers are called on to undertake range from coordinating internally and among themselves for more coherent proactive and preventative measures to protect civic space; having clear, streamlined and transparent processes to facilitate local civil society’s access to funding; and supporting more equitable partnerships between provider-country and partner-country civil society. A series of toolkits is supporting Recommendation adherents to put it into practice (OECD, 2023[48]).
For example, local women’s rights organisations and movements are critical actors in addressing the structural drivers of gender inequality. These groups, deeply rooted in their communities, possess contextual expertise, speak local languages, and act based on lived experiences, making them best positioned to drive transformative and lasting change (AWID and MamaCash, 2020[49]). Investing in community facilitators at the local level, for instance, has been shown to influence the successful outcome of violence prevention projects (UN Women, 2020[50]). Given the general aim of women’s rights organisations and movements to deliver transformative change for gender equality and the empowerment of women and girls, for example those linked to the climate crisis (Rao and Sandler, 2021[51]). Despite all this, support for women’s rights organisations and feminist movements is less than 1% of total ODA and has seen a drop from previous years (OECD, 2024[52]).
The OECD DAC peer learning exercise, which focuses on how development co-operation can support locally led development, has identified emerging avenues for actionable change in policies, systems, and ways of engaging. To have a policy impact, leadership commitments are important for aligning institutional arrangements and funding mechanisms to support more equitable and inclusive partnerships.
Rethinking system processes, ranging from the harmonisation of risk management and assessment methods to working through a decentralised system of authority, can also be beneficial for enabling locally led development. To effectively achieve locally led development co-operation, it is important to respect local knowledge, tailor capacity strengthening efforts to local needs and requests, and ensure that local agency is respected. Facilitating peer-to-peer exchanges to deliver mutual benefits by focusing activities on policy areas, where cities and regions have strong comparative advantages, competencies and knowledge to share can be important driver for the success of decentralised development co-operation, alongside common DDC guidance and objectives at national, regional, and local levels, as well as in specific policy areas, to support locally led and effective development cooperation.
Moving forward, emphasis should be placed on building a robust evidence base demonstrating the benefits of locally led development. By addressing power imbalances, aligning values, and embracing flexibility in approaches and partnerships, the international development community can pave the way for more equitable and impactful co-operation grounded in local leadership and agency.
2.7. Strengthening capacities to measure progress beyond GDP to reflect economic and social progress vis-a-vis environmental sustainability
It is difficult to improve the lives of people we don’t know about, or about whom we know very little. Over the past decades, statistical and policy communities are increasingly adopting measures of economic progress “beyond GDP”, to address the fact that no single indicator can provide a sufficient picture of what our complex economies and societies are delivering for people now and for future generations. For instance, the United Nations Inter-Agency and Expert Group on SDG Indicators (UN IAEG)’s global indicator framework for measuring the SDGs complements GDP measurements.
To better understand people’s living conditions, their distribution across the population, and their sustainability over time we need high-quality, granular, and people- and planet-centred data that can be disaggregated across a range of dimensions and geographies. Better people- and planet-centred measurement is key to understanding whether policy measures and actions lead to improvements in people’s lives today and whether they are compatible with the needs of future generations and planetary boundaries, in line with the concept of policy coherence.
Over the past two decades, a core of the OECD’s evidence-based work has included developing and strengthening measures of inclusion and ‘multidimensional’ well-being “beyond GDP”. The OECD approach for sustainable and inclusive well-being is underpinned by the OECD Well-being Framework, launched in 2011 (Box 2.4). This framework is an outcome-focused tool that includes 11 dimensions of well-being, their distribution and inequalities across the population, and the systemic resources that help to sustain outcomes over time and for future generations.
Box 2.4. The OECD Well-being Framework
The OECD Well-being Framework, first launched in 2011, is a tool to measure human and societal conditions and assess whether quality of life is improving. It was developed under the guidance of the OECD Committee on Statistics and Statistical Policy, where the national statisticians of all OECD countries are represented, and it was comprehensively reviewed and adapted in 2019 to ensure its alignment with developments since it was first launched in 2011.
Current well-being is comprised of 11 dimensions related to material conditions that shape people’s economic options as well as quality-of-life factors that encompass how well people are (and how well they feel they are), what they know and can do, and how healthy and safe their places of living are. In addition, dimensions addressing community relations encompass how connected and engaged people are, and how and with whom they spend their time.
As national averages often mask large inequalities in how different parts of the population are doing, three types of inequalities are systematically considered: gaps between population groups (e.g. between men and women, old and young people, etc.); gaps between those at the top and those at the bottom of the achievement scale in each dimension (e.g. the income of the richest 20% of individuals compared to that of the poorest 20%); and deprivations (the share of the population falling below a given threshold of achievement, e.g. a minimum level of skills or health).
Resources for future well-being are expressed in terms of country’s investment in (or depletion of) different types of capital resources that last over time but that are also affected by decisions taken (or not taken) today. They include natural capital (stocks of natural resources, land cover, species biodiversity, as well as ecosystems and their services), economic capital (human-made or produced capital and financial assets), human capital (skills and the future health of the population) and social capital (social norms, shared values and institutional arrangements that foster cooperation).
Source: (OECD, 2020[53])
Since 2011, the OECD How’s Life? report series has also been documenting trends over time, inequalities in current well-being, and resources for the future among OECD countries (OECD, 2020[53]; OECD, 2024[54]). This approach, based on the OECD Well-being Framework, has been adapted for use in countries at different stages of development (Boarini, Kolev and McGregor, 2014[55]) and has been employed to study well-being, sustainability, and inequalities in the Latin America and the Caribbean (LAC) region (Box 2.5).
This work has highlighted marked differences in people’s living conditions and quality of life by education, age, gender, and health status. It has also indicated systemic risks across environmental, economic, and social systems with potential consequences that could put the well-being of future generations at risk.
Box 2.5. Well-being, sustainability and inequalities in Latin America
From the early 2000s up until the COVID-19 pandemic, the LAC region experienced considerable gains in well-being and quality of life, such as increased life expectancy, reduced child and maternal mortality, and better access to drinking water. The number of people in absolute poverty (i.e., those whose income is not enough to meet basic needs such as food or shelter) declined – from 1 in 3 in 2006 to 1 in 5 by 2019 – and the share of the population with an upper secondary education rose from 34% to 46%.
These gains in well-being outcomes, however, only tell part of the story. The pace of progress slowed from the mid-2010s, and even prior to the pandemic, people’s perceptions of their living standards deteriorated, as did their trust in government and their support for democracy. The share of workers in informal employment remained high (at 57%) while disparities in well-being persisted across population groups.
Depending on people’s age, gender, ethnicity, education, or place of residence, citizens experience widely different levels of well-being. For instance, although women across the LAC countries studied are better educated and live longer than men, they experience far worse labour market outcomes and have less civic and political voice. Young adults experience higher poverty and unemployment rates than their older counterparts and have lower trust in the police. There are also deep cleavages between urban and rural areas in terms of housing conditions and poverty rates. In the eleven countries studied, only around two-thirds of the rural population have access to drinking water services or hygienic toilet facilities on average, compared to 96% and 93% of the urban population respectively.
To foster inclusive and sustainable well-being alongside economic growth, LAC countries need to prioritise well-being in their long-term government operations. This includes developing a better understanding of inequalities across different dimensions of people’s lives, harmonising data collection between and within countries, and asking people to measure their own experiences of their lives. Producing more and better statistics is not enough: institutional, analytical, and operational innovation in the way governments approach policymaking is also needed, enabling well-being evidence to inform the design, implementation, and evaluation of policies.
Figure 2.2. The OECD Well-being Framework
Source: (OECD, 2021[56]).
Since the introduction of this Framework, over 70% of OECD Member countries have developed their own nationally tailored well-being initiatives and frameworks (Figure 2.3), often with explicit support and guidance from the OECD. To harness the significant experience built through these national initiatives and to further accelerate capacity development, in late 2023 the OECD launched the Well-being Knowledge Exchange Platform (KEP). This platform provides practical examples, case studies, and peer-learning on how countries have both developed well-being evidence and used it to support policy design and development, implementation and evaluation, and budget allocation.
Figure 2.3. More than 70% of OECD countries have developed national frameworks, development plans or surveys with a well-being focus
Note: The year refers to the first published instance of the work.
Source: Adapted from (OECD, 2021[57]).
These national initiatives not only consider the wealth of the evolving body of knowledge developed by the international community and peers but have crucially also listened to the voices of national populations and stakeholders to understand the well-being, inclusion and sustainability dimensions that are most pertinent to their national contexts.
The international community should continue to strive for better, more relevant, and timely metrics, which capture the multitude of experiences and needs of people and are instrumental in informing a tailored, effective, and coordinated policy response. To make this investment worthwhile, it is also important to demonstrate the returns from better measurement in the context of competing urgencies and priorities, notably by communicating better on what multi-dimensional well-being and sustainability frameworks are revealing, and by showcasing country experiences and good practices.
Policy Recommendations
To achieve effective governance for sustainable transformation, governments and the international community are encouraged to:
Equipping governance and institutions for sustainable and inclusive transformation
Set up strategic policy frameworks to systematically integrate economic, social, and environmental dimensions at all stages of policymaking, underpinned by clear political commitment and leadership to enhance PCSD;
Strengthen coordination capacity and establish effective institutional mechanisms that detect and resolve policy conflicts and that align actions across sectors and between levels of government, including an administrative culture that promotes cross-sectoral cooperation, as well as adequate training of civil servants;
Utilise responsive tools and monitoring mechanisms to anticipate and address cross-national and long-term impacts of policies on sustainable and inclusive development, and to ensure that policies can be adjusted in light of their impacts;
Strategically use public investments, stimulating further investments from private and other sectors;
Prioritise investments that are universally beneficial and recognise the interconnectedness of environmental, social, and economic aspects of sustainable development;
Integrate sustainability criteria in public procurement and budgeting processes;
Leverage transition finance to build resilient infrastructure and services;
Tackle the risks of financial exclusion, by addressing the unintended effects of global legal regulation on the ability of developing countries to access finance and credit;
Prioritise measures that can reduce the risk of corruption and illicit financial flow (IFF) across sectors critical for domestic resource mobilisation, including tax revenue collection, remittances, trade and investment; and
Target the enablers of illicit financial flows to prevent the unlawful diversion of economic gains out of countries, which can negate financial inflows and severely reduce domestic investment capacity.
Adopting a territorial approach to SDGs
Adopt a territorial approach that incentivises and empowers subnational governments to develop and implement plans to advance on the SDGs, with supportive fiscal frameworks, granular data and governance structures that align spending, priorities and monitoring across different levels of government.
Developing a suitable regulatory framework
Take a whole-of-government approach to international regulatory co-operation that conveys political leadership and builds a holistic vision with co-operation platforms and clearly defined roles and responsibilities for oversight bodies and regulators. This is key to ensure that policymakers and regulators across sectors support their government’s global commitments by considering international impacts and capitalising on relevant information, practices and evidence;
Recognise international regulatory co-operation throughout domestic rulemaking by gathering and taking into account international knowledge as well as relevant impacts, considering existing international instruments, providing opportunities to engage with interested parties to comment on potential international consequences of regulatory options; and
Co-operate internationally on bilateral, plurilateral, and multilateral levels for the development and diffusion of good practices, the consideration and recognition of other jurisdictions' measures, and collection of evidence on issues of common interest.
Ensuring information integrity to enhance the ability of governments to fulfil their responsibilities
Implement policies – such as supporting independent media or ensuring that online platforms are held accountable for information spread through their services – to enhance the transparency, accountability, and plurality of information sources;
Foster societal resilience to disinformation through education and critical thinking practices; and
Upgrade governance measures and public institutions, such as regulation, strategic frameworks, and capacity building to uphold the integrity of the information space.
Enhancing access to justice and promoting people-centred justice systems
Strengthen institutional capacity to deliver people-centred justice through developing people-centred justice purpose and culture based on evidence of legal needs of different groups of the population;
Design and deliver a continuum of people-centred legal and justice services tailored to diverse legal needs; and
Empower individuals through legal literacy and community-based initiatives.
Strengthening global development cooperation
Better leverage and maximise the sustainable development impact of ODA and other official flows to mobilise private finance and investment through innovative instruments with a focus on quality (blended finance, bonds, guarantees, etc.) that is aligned with the SDGs and built on inclusive partnerships;
Refresh the development effectiveness narrative in a changing global context with new demands, and adapt institutional arrangements, management systems, policies, partnerships, and practices to engage with partner country actors accordingly, including by supporting locally led development co-operation in line with development effectiveness principles; Leverage whole of government contribution to development and build public and political support for development. This can include decentralised development co-operation (DDC) through common DDC guidance and objectives at national, regional, and local levels, to support locally led and effective development co-operation, including through the facilitation of peer-to-peer learning to deliver mutual benefits in areas where cities and regions have strong competencies and knowledge to share;
Promote policy coherence for sustainable development by considering the transboundary aspect of policy making to increase the effectiveness of their policies and with a view to achieving the SDGs, and by continuing to develop adequate metrics and frameworks to orient and measure the contribution of the private sector to the SDGs and promote harmonisation and inter-operability of these frameworks; and
Safeguard the integrity of ODA and strengthen corruption risk management systems in partner countries building on the 2016 Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption. Additionally, prioritising the fight against illicit financial flows (IFFs) will remain strategic. The 2023 DAC Policy Guidance on Mitigating Risks of IFFs in oil commodity trading provides a roadmap to enhance domestic resource mobilisation for the benefit of populations in resource-rich developing countries while at the same time laying the basis to ensure integrity in the energy transition.
Strengthening capacities to measure progress beyond GDP
Strive for better, more granular and timely metrics beyond GDP that capture the multitude of experiences and needs of people and that are instrumental for informing a tailored, effective and coordinated policy response;
Strengthen statistical capacity to collect better evidence and harmonise data collection between and within countries and to fill statistical gaps for minorities and marginalised groups, with a view to reach and account for all those that are at risk of being left behind; and
Adopt innovative approaches to inform policymaking, for example by including insights from lived experiences.
References
[42] AUDA-NEPAD (2023), Launch of Team Africa, https://www.nepad.org/news/launch-of-team-africa.
[49] AWID and MamaCash (2020), Moving More Money to the Drivers of Change: How Bilateral and Multilateral Funders Can Resource Feminist Movements, https://www.awid.org/sites/default/files/atoms/files/movingmoremoney_finalfinalfinal.pdf.
[55] Boarini, R., A. Kolev and A. McGregor (2014), “Measuring Well-being and Progress in Countries at Different Stages of Development: Towards a More Universal Conceptual Framework”, OECD Development Centre Working Papers, No. 325, OECD Publishing, Paris, https://doi.org/10.1787/5jxss4hv2d8n-en.
[40] Global Partnership for Effective Development Co-operation (2021), Effectiveness Lessons for More Impactful Climate Action in Development Co-operation, https://www.effectivecooperation.org/system/files/2021-10/211001_GPEDC%20climate%20statement_final.pdf.
[36] Global Partnership for Effective Development Co-operation (n.d.), The Effectiveness Principles, https://www.effectivecooperation.org/landing-page/effectiveness-principles.
[43] ILO (2023), Social Protection & Public Financial Management,, https://socialprotection-pfm.org/.
[10] IMF (2016), Corruption: Costs and Mitigating Strategies, https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2016/12/31/Corruption-Costs-and-Mitigating-Strategies-43888.
[33] Lesher, M., H. Pawelec and A. Desai (2022), “Disentangling untruths online: Creators, spreaders and how to stop them”, OECD Going Digital Toolkit Notes, No. 23, OECD Publishing, Paris, https://doi.org/10.1787/84b62df1-en.
[34] Lorenz, P., K. Perset and J. Berryhill (2023), “Initial policy considerations for generative artificial intelligence”, OECD Artificial Intelligence Papers, No. 1, OECD Publishing, Paris, https://doi.org/10.1787/fae2d1e6-en.
[1] OECD (2024), Development Co-operation Principles for Relevant and Effective Support to Media and the Information Environment, Best Practices in Development Co-operation, OECD Publishing, Paris, https://doi.org/10.1787/76d82856-en.
[52] OECD (2024), Development finance for gender equality and women’s empowerment, https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/development-finance-for-gender-equality-and-women-s-empowerment.htm.
[23] OECD (2024), “Framework on management of emerging critical risks”, OECD Public Governance Policy Papers, No. 49, OECD Publishing, Paris, https://doi.org/10.1787/2f2eddd8-en.
[54] OECD (2024), How’s Life? Well-being Database, https://data-explorer.oecd.org/?fs[0]=Topic%2C1%7CSociety%23SOC%23%7CWell-being%20and%20beyond%20GDP%23SOC_WEL%23&pg=0&fc=Topic&bp=true&snb=8.
[18] OECD (2024), Infrastructure for a Climate-Resilient Future, OECD Publishing, Paris, https://doi.org/10.1787/a74a45b0-en.
[2] OECD (2024), Policy Guidance: Enabling Inclusive Governance, Best Practices in Development Co-operation, OECD Publishing, Paris, https://doi.org/10.1787/6d995bed-en.
[38] OECD (2023), Achieving SDG Results in Development Co-operation-A Comparative Assessment JT03522718 OFDE, https://one.oecd.org/document/DCD%282023%2929/en/pdf (accessed on 9 July 2024).
[24] OECD (2023), “Better regulation for the green transition”, OECD Public Governance Policy Papers, No. 40, OECD Publishing, Paris, https://doi.org/10.1787/c91a04bc-en.
[46] OECD (2023), “Decentralised development co-operation: A global policy toolkit and guidance for practitioners”, OECD Regional Development Papers, No. 46, OECD Publishing, Paris, https://doi.org/10.1787/3cb22851-en.
[20] OECD (2023), Financing Cities of Tomorrow: G20/OECD Report for the G20 Infrastructure Working Group under the Indian Presidency, OECD Publishing, Paris, https://doi.org/10.1787/51bd124a-en.
[44] OECD (2023), Framing DAC member approaches to enabling locally led development, https://one.oecd.org/document/DCD(2023)47/en/pdf.
[48] OECD (2023), Funding Civil Society in Partner Countries: Toolkit for Implementing the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance, Best Practices in Development Co-operation, OECD Publishing, Paris, https://doi.org/10.1787/9ea40a9c-en.
[37] OECD (2023), “Impact by Design Effective Results Frameworks for Sustainable Development”.
[12] OECD (2023), Policy Guidance on Mitigating the Risks of Illicit Financial Flows in Oil Commodity Trading: Enabling Integrity in the Energy Transition, OECD Publishing, https://www.oecd-ilibrary.org/docserver/4ab9053e-en.pdf?expires=1719248122&id=id&accname=ocid84004878&checksum=DC571089ED6BB8656DBA73F4AEC6C13A.
[41] OECD (2023), Towards a triple transition. Strategies for transformational European development action, https://www.oecd.org/dev/Strategies-transformational-European-development-action-Triple-Transition.pdf.
[22] OECD (2022), Aligning Regional and Local Budgets with Green Objectives: Subnational Green Budgeting Practices and Guidelines, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/93b4036f-en.
[7] OECD (2022), Equitable Framework and Finance for Extractive-based Countries in Transition (EFFECT), OECD Development Policy Tools, OECD Publishing, Paris, https://doi.org/10.1787/7871c0ad-en.
[19] OECD (2022), G20-OECD Policy Toolkit to Mobilise Funding and Financing for Inclusive and Quality Infrastructure Investment in Regions and Cities, OECD Publishing, Paris, https://doi.org/10.1787/99169ac9-en.
[3] OECD (2022), Italy’s National Action Plan for Policy Coherence for Sustainable Development, OECD Publishing, Paris, https://doi.org/10.1787/54226722-en.
[16] OECD (2022), “OECD toolkit for a territorial approach to the SDGs”, OECD Regional Development Papers, No. 33, OECD Publishing, Paris, https://doi.org/10.1787/2913bae2-en.
[14] OECD (2022), OECD-UCLG 2022 Synthesis Report of the World Observatory on Subnational Government Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/b80a8cdb-en.
[21] OECD (2022), Subnational government climate expenditure and revenue tracking in OECD and EU Countries, OECD Regional Development Papers, No. 32, OECD Publishing, https://doi.org/10.1787/1e8016d4-en.
[17] OECD (2021), “A territorial approach to the Sustainable Development Goals in Paraná, Brazil”, OECD Regional Development Papers, No. 17, OECD Publishing, Paris, https://doi.org/10.1787/a24b52a5-en.
[39] OECD (2021), Achieving SDG Results in Development Co-operation: Summary for Policy Makers, OECD Publishing, Paris, https://doi.org/10.1787/5b2b0ee8-en.
[57] OECD (2021), COVID-19 and Well-being: Life in the Pandemic, OECD Publishing, Paris, https://doi.org/10.1787/1e1ecb53-en.
[47] OECD (2021), DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-5021.
[56] OECD (2021), How’s Life in Latin America?: Measuring Well-being for Policy Making, OECD Publishing, Paris, https://doi.org/10.1787/2965f4fe-en.
[32] OECD (2021), International Regulatory Co-operation, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/5b28b589-en.
[35] OECD (2021), OECD Framework and Good Practice Principles for People-Centred Justice, OECD Publishing, Paris, https://doi.org/10.1787/cdc3bde7-en.
[29] OECD (2021), OECD Regulatory Policy Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/38b0fdb1-en.
[15] OECD (2020), A Territorial Approach to the Sustainable Development Goals: Synthesis report, OECD Urban Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/e86fa715-en.
[45] OECD (2020), Digital Transformation annd the futures of civic space to 2030, OECD Development Policy Paper 29, https://www.oecd.org/dac/digital-transformation-and-the-futures-of-civic-space-to-2030-79b34d37-en.htm.
[53] OECD (2020), How’s Life? 2020: Measuring Well-being, OECD Publishing, Paris, https://doi.org/10.1787/9870c393-en.
[27] OECD (2020), Innovative Citizen Participation and New Democratic Institutions: Catching the Deliberative Wave, OECD Publishing, Paris, https://doi.org/10.1787/339306da-en.
[30] OECD (2020), Reviewing the Stock of Regulation, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/1a8f33bc-en.
[4] OECD (2019), Measuring Distance to the SDG Targets 2019: An Assessment of Where OECD Countries Stand, OECD Publishing, Paris, https://doi.org/10.1787/a8caf3fa-en.
[9] OECD (2018), “Country profiles: Institutional mechanisms for policy coherence”, in Policy Coherence for Sustainable Development 2018: Towards Sustainable and Resilient Societies, OECD Publishing, Paris, https://doi.org/10.1787/9789264301061-6-en.
[28] OECD (2018), Ex-post assessment of regulation: Practices and lessons from OECD countries, https://www.oecd.org/espanol/publicaciones/OECD%20(2018)%20Expost%20assessment.pdf.
[26] OECD (2016), Open Government: The Global Context and the Way Forward, OECD Publishing, Paris, https://doi.org/10.1787/9789264268104-en.
[31] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, OECD Publishing, Paris, https://doi.org/10.1787/9789264209022-en.
[6] OECD (forthcoming), Report on the Implementation of the OECD Recommendation on Policy Coherence for Sustainable Development.
[5] OECD (Forthcoming), Strengthening the resilience of global food markets: The potential of biofuels and trade policies to mitigate food price shocks, OECD Working Papers.
[51] Rao, A. and J. Sandler (2021), Charting a Transformative Path to Gender Equality, OECD.
[25] Smid, S. (2023), “Understanding cultural differences and extreme attitudes in the 2021 OECD Trust Survey: Text analysis of open-ended responses”, OECD Working Papers on Public Governance, No. 57, OECD Publishing, Paris, https://doi.org/10.1787/ef25d883-en.
[13] SNG-WOFI (n.d.), OECD-UCLG World Observatory on Subnational Government Finance and Investment, https://www.sng-wofi.org/.
[8] The African Climate Foundation/LSE (2023), Implications For African Countries of a Carbon Border Adjustment Mechanism in the EU, The African Climate Foundation and London School of Economics, https://africanclimatefoundation.org/wp-content/uploads/2023/05/800756-AFC-Implications-for-Africa-of-a-CBAM-in-the-EU-06A-FINAL.pdf.
[50] UN Women (2020), UN Trust Fund To End Violence Against Women Annual Report 2020, https://www.unwomen.org/sites/default/files/Headquarters/Attachments/Sections/Library/Publications/2021/UN-Trust-Fund-annual-report-2020-en.pdf.
[11] UNCTAD (2022), FInancing for Development: Mobilizing Sustainable Development FInance Beyond COVID-19, United Nations Conference on Trade and Development (UNCTAD), http://unctad.org/system/files/official-document/tdb_efd5d2_en.pdf.
Notes
← 1. See OECD work on A Territorial Approach to the SDGs