economic growth and sustainable development essay

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Essay on Sustainable Development: Samples in 250, 300 and 500 Words

• Updated on  
• Nov 18, 2023

On 3rd August 2023, the Indian Government released its Net zero emissions target policy to reduce its carbon footprints. To achieve the sustainable development goals (SDG) , as specified by the UN, India is determined for its long-term low-carbon development strategy. Selfishly pursuing modernization, humans have frequently compromised with the requirements of a more sustainable environment.

As a result, the increased environmental depletion is evident with the prevalence of deforestation, pollution, greenhouse gases, climate change etc. To combat these challenges, the Ministry of Environment, Forest and Climate Change launched the National Clean Air Programme (NCAP) in 2019. The objective was to improve air quality in 131 cities in 24 States/UTs by engaging multiple stakeholders.

‘Development is not real until and unless it is sustainable development.’ – Ban Ki-Moon

The concept of Sustainable Development in India has even greater relevance due to the controversy surrounding the big dams and mega projects and related long-term growth. Since it is quite a frequently asked topic in school tests as well as competitive exams , we are here to help you understand what this concept means as well as the mantras to drafting a well-written essay on Sustainable Development with format and examples.

This Blog Includes:

What is sustainable development, 250-300 words essay on sustainable development, 300 words essay on sustainable development, 500 words essay on sustainable development, introduction, conclusion of sustainable development essay, importance of sustainable development, examples of sustainable development.

As the term simply explains, Sustainable Development aims to bring a balance between meeting the requirements of what the present demands while not overlooking the needs of future generations. It acknowledges nature’s requirements along with the human’s aim to work towards the development of different aspects of the world. It aims to efficiently utilise resources while also meticulously planning the accomplishment of immediate as well as long-term goals for human beings, the planet as well and future generations. In the present time, the need for Sustainable Development is not only for the survival of mankind but also for its future protection. 

Looking for ideas to incorporate in your Essay on Sustainable Development? Read our blog on Energy Management – Find Your Sustainable Career Path and find out!

To give you an idea of the way to deliver a well-written essay, we have curated a sample on sustainable development below, with 250-300 words:

To give you an idea of the way to deliver a well-written essay, we have curated a sample on sustainable development below, with 300 + words:

Must Read: Article Writing

To give you an idea of the way to deliver a well-written essay, we have curated a sample on sustainable development below, with 500 + words:

Essay Format

Before drafting an essay on Sustainable Development, students need to get familiarised with the format of essay writing, to know how to structure the essay on a given topic. Take a look at the following pointers which elaborate upon the format of a 300-350 word essay.

Introduction (50-60 words) In the introduction, students must introduce or provide an overview of the given topic, i.e. highlighting and adding recent instances and questions related to sustainable development. Body of Content (100-150 words) The area of the content after the introduction can be explained in detail about why sustainable development is important, its objectives and highlighting the efforts made by the government and various institutions towards it.  Conclusion (30-40 words) In the essay on Sustainable Development, you must add a conclusion wrapping up the content in about 2-3 lines, either with an optimistic touch to it or just summarizing what has been talked about above.

How to write the introduction of a sustainable development essay? To begin with your essay on sustainable development, you must mention the following points:

• What is sustainable development?
• What does sustainable development focus on?
• Why is it useful for the environment?

How to write the conclusion of a sustainable development essay? To conclude your essay on sustainable development, mention why it has become the need of the hour. Wrap up all the key points you have mentioned in your essay and provide some important suggestions to implement sustainable development.

The importance of sustainable development is that it meets the needs of the present generations without compromising on the needs of the coming future generations. Sustainable development teaches us to use our resources in the correct manner. Listed below are some points which tell us the importance of sustainable development.

• Focuses on Sustainable Agricultural Methods – Sustainable development is important because it takes care of the needs of future generations and makes sure that the increasing population does not put a burden on Mother Earth. It promotes agricultural techniques such as crop rotation and effective seeding techniques.
• Manages Stabilizing the Climate – We are facing the problem of climate change due to the excessive use of fossil fuels and the killing of the natural habitat of animals. Sustainable development plays a major role in preventing climate change by developing practices that are sustainable. It promotes reducing the use of fossil fuels which release greenhouse gases that destroy the atmosphere.
• Provides Important Human Needs – Sustainable development promotes the idea of saving for future generations and making sure that resources are allocated to everybody. It is based on the principle of developing an infrastructure that is can be sustained for a long period of time.
• Sustain Biodiversity – If the process of sustainable development is followed, the home and habitat of all other living animals will not be depleted. As sustainable development focuses on preserving the ecosystem it automatically helps in sustaining and preserving biodiversity.
• Financial Stability – As sustainable development promises steady development the economies of countries can become stronger by using renewable sources of energy as compared to using fossil fuels, of which there is only a particular amount on our planet.

Mentioned below are some important examples of sustainable development. Have a look:

• Wind Energy – Wind energy is an easily available resource. It is also a free resource. It is a renewable source of energy and the energy which can be produced by harnessing the power of wind will be beneficial for everyone. Windmills can produce energy which can be used to our benefit. It can be a helpful source of reducing the cost of grid power and is a fine example of sustainable development. 
• Solar Energy – Solar energy is also a source of energy which is readily available and there is no limit to it. Solar energy is being used to replace and do many things which were first being done by using non-renewable sources of energy. Solar water heaters are a good example. It is cost-effective and sustainable at the same time.
• Crop Rotation – To increase the potential of growth of gardening land, crop rotation is an ideal and sustainable way. It is rid of any chemicals and reduces the chances of disease in the soil. This form of sustainable development is beneficial to both commercial farmers and home gardeners.
• Efficient Water Fixtures – The installation of hand and head showers in our toilets which are efficient and do not waste or leak water is a method of conserving water. Water is essential for us and conserving every drop is important. Spending less time under the shower is also a way of sustainable development and conserving water.
• Sustainable Forestry – This is an amazing way of sustainable development where the timber trees that are cut by factories are replaced by another tree. A new tree is planted in place of the one which was cut down. This way, soil erosion is prevented and we have hope of having a better, greener future.

Related Articles

The Sustainable Development Goals (SDGs) are a set of 17 global goals established by the United Nations in 2015. These include: No Poverty Zero Hunger Good Health and Well-being Quality Education Gender Equality Clean Water and Sanitation Affordable and Clean Energy Decent Work and Economic Growth Industry, Innovation, and Infrastructure Reduced Inequality Sustainable Cities and Communities Responsible Consumption and Production Climate Action Life Below Water Life on Land Peace, Justice, and Strong Institutions Partnerships for the Goals

The SDGs are designed to address a wide range of global challenges, such as eradicating extreme poverty globally, achieving food security, focusing on promoting good health and well-being, inclusive and equitable quality education, etc.

India is ranked #111 in the Sustainable Development Goal Index 2023 with a score of 63.45.

Hence, we hope that this blog helped you understand the key features of an essay on sustainable development. If you are interested in Environmental studies and planning to pursue sustainable tourism courses , take the assistance of Leverage Edu ’s AI-based tool to browse through a plethora of programs available in this specialised field across the globe and find the best course and university combination that fits your interests, preferences and aspirations. Call us immediately at 1800 57 2000 for a free 30-minute counselling session

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SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

• By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment.
• Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms.
• Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.
• Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value-added and labour-intensive sectors.
• Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
• Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead.
• By 2020, substantially reduce the proportion of youth not in employment, education or training.
• By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
• Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.
• Increase Aid for Trade support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries.
• By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization.

Economic growth contributes to sustainable development where it extends benefits to all people, actively reduces inequalities and avoids harm to the environment.

For growth to be inclusive, it must be decent work equally accessible to women and men. With women still less likely to participate in the labour force, and more likely to take the worst jobs in it—insecure, unsafe and poorly paid jobs—inclusive growth remains far out of reach.

Globally, only 63 per cent of women aged 25 to 54 are in the labour force compared to 94 per cent of men of the same age. Women’s participation rate has barely budged in the last 20 years, except in Latin America and the Caribbean, where it rose from 57 per cent to 68 per cent. In Central and Southern Asia, the rate has fallen to 37 per cent.

At current rates of change, the gender gap, which stands at 23 per cent globally, will not close until 2086—or possibly beyond. The estimation only considers better formal jobs, and not the informal, poorer quality ones where many women still work. Patterns of occupational segregation mean some occupations remain dominated by men or women, with the latter tending to be lower in status and pay.

UN Women acts to achieve economic rights and growth for all by promoting decent work, equal pay for equal work, equal access to economic assets and opportunities, and the fair distribution of unpaid care work. Specific support for informal workers helps them claim their rights and have a voice, including through trade unions. Partnership with the private sector, including through the Women’s Empowerment Principles, helps transform business practices in support of gender equality and women’s empowerment.

From where I stand: "I slept in the dog house because I wanted to go to school" Shirley Price, formerly a domestic worker in Jamaica, used to be locked out of the house every night by her employers because she attended evening classes, a memory that haunts her to date. Today, she advocates for domestic workers' rights across the Caribbean, and is campaigning for a national law to protect the rights of domestic workers in Jamaica.

Photo essay: Changing world, changing work While the world of work is changing fast, it needs to change faster to empower women. Women's economic empowerment requires transformative changes that include equal pay for women, increase in labour force participation of women, equally shared unpaid care by men and women, improved conditions for women in the informal sector, and protection against harassment at work.

In Uruguay, care law catalyzes change, ushering services and breaking stereotypes Soledad Rotella, who couldn't afford to send her first two children to daycare, and sometimes left them alone at home so she could earn a living, is now able to send her two-year-old daughter to quality and free day care, thanks to. Uruguay's Care Act. Under the new law, all children, persons with disabilities and elderly persons have the right to get free care. This has helped many women get fulltime jobs without compromising the well-being of their children or family.

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These are the 4 steps we need to make economic growth sustainable, resilient and inclusive

Investments, innovation, policy, and finance all play a central role in defining the economic growth model of the 21st century. Image:  Coleen Rivas/Unsplash

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Hans peter lankes, roberta pierfederici.

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Listen to the article

• Investments, innovation, policy, and finance all play a central role in defining the economic growth model of the 21 st century.
• If we want to create a sustainable, resilient, and inclusive future for all, we must collaborate better on these four major issues.

There is a growing understanding that the deepening crises facing the world come from trends in our societies and economies that are becoming unsustainable. We must tackle the basic structural problems at their source.

The challenge is to recover and rebuild in a way that creates sustained economic growth and transforms our economies while tackling the social and ecological stresses caused by our current economic models. It is also clear that there is now a new and feasible approach to development across the world, which is much more attractive than the dirty and destructive paths of the past. But the world must invest and act quickly to get there.

The wars and hardening geopolitical divisions we are witnessing underscore the precious opportunity to act together, globally, on an agenda in which all countries have an overwhelming interest.

Have you read?

4 charts that show how technology is enabling the transition to low carbon energy, a new yardstick for leaders in the 21st century.

Net-zero and nature-centred transformation, investment-driven growth and innovation, an inclusive approach to tap human talent while managing insecurity, and a process of international collaboration that fosters common goals – this will be the economic growth story of the 21st century. The private sector will take centre stage, with global investment being 80-90% private. And much of the private sector has, with rapidly increasing scale, committed to sustainability, responsibility, and net-zero emissions.

Towards sustainable and resilient economic growth

We described the path forward in a briefing paper to help frame the debate at the World Economic Forum Annual Meeting in Davos in May 2022. Here, we focus on the centrality of investment, innovation, policy, and finance in driving a new economic growth model.

1) Investment in the right kinds of capital and infrastructure

The future of people and the planet will be shaped by the capital investments realized over the next 10-20 years, capital that can drive clean, green, job-rich and much healthier economic growth than what came before. To drive the low-carbon transformation, global investment must increase by around 2–3% of GDP per year above pre-pandemic levels. This investment will be primarily in the private sector, but public investment must complement and catalyse this.

Corporate leaders from the mining, metals and manufacturing industries are changing their approach to integrating climate considerations into complex supply chains.

The Forum’s Mining and Metals Blockchain Initiative , created to accelerate an industry solution for supply chain visibility and environmental, social and corporate governance (ESG) requirements, has released a unique proof of concept to trace emissions across the value chain using distributed ledger technology.

Developed in collaboration with industry experts, it not only tests the technological feasibility of the solution, but also explores the complexities of the supply chain dynamics and sets requirements for future data utilization.

In doing so, the proof of concept responds to demands from stakeholders to create “mine-to-market” visibility and accountability.

The World Economic Forum’s Mining and Metals community is a high-level group of peers dedicated to ensuring the long-term sustainability of their industry and society. Read more about their work, and how to join, via our Impact Story .

Why do we believe that this is possible? Because investment ratios are far below potential, the energy transformation opens up vast new markets, technology is yielding increasingly high returns, and the world continues to produce excess savings that can feed investments. Investments should not be misperceived as costs. They can propel more efficient, cleaner, and inclusive economic growth and create further private sector opportunities, along with many other significant co-benefits (see Table 1).

2) Innovation and systems transformation

Much of the fundamental structural change needed lies in transforming the key systems of energy, transport, industry, cities and land. All require combinations of institutional change, standards and regulation, design and good policy. Fortunately, revolutions in digital and AI enable the management of these systems in new ways.

The potential is immense: By 2030, low-carbon solutions could be competitive in sectors accounting for nearly three-quarters of emissions, compared to one-quarter today (mainly in electricity) and no sectors only five years ago (see Figure 1). Public-sector support and partnership will be crucial for technologies that face high upfront costs and uncertain returns; initiatives such as Mission Innovation, the International Solar Alliance, the Climate Action Platform and the Glasgow Breakthrough Agenda are powerful examples.

How is the World Economic Forum fighting the climate crisis?

The Global Risks Report 2023 ranked failure to mitigate climate change as one of the most severe threats in the next two years, while climate- and nature- related risks lead the rankings by severity over the long term.

The World Economic Forum’s Centre for Nature and Climate is a multistakeholder platform that seeks to safeguard our global commons and drive systems transformation. It is accelerating action on climate change towards a net-zero, nature-positive future.

Learn more about our impact:

• Scaling up green technologies: Through a partnership with the US Special Presidential Envoy for Climate, John Kerry, and over 65 global businesses, the First Movers Coalition has committed $12 billion in purchase commitments for green technologies to decarbonize the cement and concrete industry.
• 1 trillion trees: Over 90 global companies have committed to conserve, restore and grow more than 8 billion trees in 65 countries through the 1t.org initiative – which aims to achieve 1 trillion trees by 2030.
• Sustainable food production: Our Food Action Alliance is engaging 40 partners who are working on 29 flagship initiatives to provide healthy, nutritious, and safe foods in ways that safeguard our planet. In Vietnam, it supported the upskilling of 2.2 million farmers and aims to provide 20 million farmers with the skills to learn and adapt to new agricultural standards.
• Eliminating plastic pollution: Our Global Plastic Action Partnership is bringing together governments, businesses and civil society to shape a more sustainable world through the eradication of plastic pollution. In Ghana, more than 2,000 waste pickers are making an impact cleaning up beaches, drains and other sites.
• Protecting the ocean: Our 2030 Water Resources Group has facilitated almost $1 billion to finance water-related programmes , growing into a network of more than 1,000 partners and operating in 14 countries/states.
• Circular economy: Our SCALE 360 initiative is reducing the environmental impacts of value chains within the fashion, food, plastics and electronics industries, positively impacting over 100,000 people in 60 circular economy interventions globally.

Want to know more about our centre’s impact or get involved? Contact us .

3) Policies to foster investments, innovation and a just transition

A big push on investments and innovation requires credible and supportive policy and governance that can create confidence in future returns. Implementing a price on carbon is central for efficiently shifting production and consumption towards lower-carbon sources. Beyond pricing, rapid changes in the use of coal and petrol will require regulatory action to avoid unacceptably steep price hikes. The design of our towns and cities must be re-shaped towards cycling, pedestrian and public, and shared transport.

Appropriate actions should also be taken to support a just transition, to ensure that the benefits and opportunities of the shift to a new economy are shared widely while helping those affected by economic losses or dislocation.

Fostering Effective Energy Transition 2022

Global risks report 2022, increasing climate ambition: analysis of an international carbon price floor, 4) finance and international cooperation for economic growth.

International cooperation around policies, technology and finance will be crucial to realise the required big push on investment and innovation if action is to be on time and at scale.

Country platforms can provide a focal point and help overcome the main obstacles to greater investments in emerging markets and developing economies (EMDEs), which often include policy and institutional hurdles, a lack of project development capacity, and the absence of reliable channels for large-scale finance.

While many advanced economies have fiscal space or borrowing ability, EMDEs entered the latest crises with high debt and limited resources. Domestic resource mobilization, largely taxes, will have to contribute to incremental finance. But international financial collaboration will be critical.

Donors from developed countries fell short of delivering on the $100 billion goal by 2020, but there is an opportunity to step up and deliver in 2022. Furthermore, as the financing challenge exceeds fiscal capacity by far, the private sector must be enabled to contribute most of the finance.

We identified six key sources of finance that need to scale up, each making specific and important contributions:

Private sector : quantitatively the biggest source of finance, but strongly dependent on the implementation of good policies, country platforms and risk management; the Glasgow Financial Alliance for Net Zero (GFANZ), launched at COP26, creates major potential in this direction.

Bilateral official finance : Concessional finance from bilateral donors is central to international climate priorities, including a just transition, adaptation, and investments in natural capital. Donors should double bilateral climate finance from its 2018 level to $60 billion by 2025.

Multilateral Development Banks : MDBs can play a key role in supporting the development of country platforms and policies to improve the flow and cost of capital by reducing, managing and sharing risk. MDBs will need to triple their climate-related lending from 2018 levels by 2025. The shareholders should insist on the expansion but also stand behind them in support of risk-taking, including growing their capital base.

Multilateral agencies : While the sums are smaller than for MDBs, institutions such as the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the Adaptation Fund can be valuable in mobilizing others.

Philanthropy : Philanthropic organizations are well equipped to provide finance for growth activities that lack market support, such as adaptation and resilience, and they do not create new indebtedness.

Voluntary carbon markets : By helping deliver finance to projects that demonstrate innovative ways of reducing emissions footprints, VCMs can also drive early investment in green technologies that would otherwise lack access to finance; again, these do not create new indebtedness.

These six financing sources are complementary. Combining them within policies and platforms to foster investment could launch the world on a new course of development.

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Economic Growth and Environmental Sustainability

Steve Cohen

There are political and business leaders who do not care if economic growth causes environmental damage and there are environmental advocates who do not believe you can have economic growth without causing environmental damage. In a New York Times piece on the climate and economics discussions at Davos, Mark Landler and Somini Sengupta reported that:

“ Critics pointed to a contradiction that they said the corporate world had been unable to resolve: how to assuage the appetite for economic growth, based on gross domestic product, with the urgent need to check carbon emissions. “It’s truly a contradiction,” said Johan Rockström, director of the Potsdam Institute for Climate Impact Research. “It’s difficult to see if the current G.D.P.-based model of economic growth can go hand-in-hand with rapid cutting of emissions,” he said .”

I find this dialogue a little amazing since it completely ignores the history of America’s success in decoupling the growth of GDP and the growth of environmental pollution. This fact of American environmental and economic life began around 1980, a decade after the creation of the U.S. Environmental Protection Agency (EPA) and continues today. It’s really quite simple: with public policies ranging from command-and-control regulations to direct and indirect government subsidies, businesses and governments developed and applied technologies that reduced pollution while allowing continued economic growth. This is not a fantasy, it is history. In the 1960s you could not see the mountains from downtown Los Angeles; today you can. In the 1960s you could not ride a bike on a path next to the Hudson River; today you can. Until 1985, we New Yorkers dumped raw sewage into the Hudson River. Today, with rare exceptions, we treat our sewage waste. And both Los Angeles and New York City have larger economies in 2020 than they had in 1980. In case you believe this progress was due to deindustrialization, the two largest sources of air pollution are power plants and motor vehicles and we have many more of them today than we had in 1980. Both utilize pollution control technology required by regulation under the law.

Environmental protection itself contributes to economic growth. Somebody makes and sells the air pollution control technologies we put on power plants and motor vehicles. Somebody builds the sewage and water treatment facilities. Just as someone makes money off of solar cells and windmills and whoever invents the 1,000-mile high capacity battery that will power electric cars someday will become very, very rich. And environmental amenities are worth money. The cleaner Hudson made the waterfront more suitable for housing development. And the building boom on New York’s west side followed the clean-up of the Hudson River. An apartment across the street from a park will bring a higher price than the same apartment a block away. The revival of New York’s Central Park raised the value of the already high-end real estate bordering the park. Clean air and water, healthy food and preserved nature all benefit human health and result in far more economic benefit than economic cost.

The climate problem is not caused by economic growth, but by the absence of effective public policy designed to reduce greenhouse gas emissions. There is nothing incompatible with capitalism and environmental protection as long as rules are in place that control the environmental impacts of the products and services we make and use. With those rules in place, a concern for environmental sustainability can and will permeate everyday decision-making in the private, nonprofit and governmental organizations we all benefit from.

I’ve written often about the evolution of the field of management over the past century or so and that a concern for sustainability is the newest trend in the development of more sophisticated organizational management. In the 20th century, we saw the field of management absorb the development of mass production, social psychology, accounting, information management, satellite and cellular communications, globalization and now a concern for the physical dimensions of environmental sustainability. Sustainability managers continue to lead an organization’s marketing, strategy, finance and work processes but they also seek to assess their use of energy, water and other materials and work to reduce waste and environmental impacts. Just as finance staff, reinforced by the Security and Exchange Commission rules learned to identify and reduce self-dealing, conflict of interest and fraud; sustainability staff reinforced by EPA rules look to identify and reduce organizational practices that damage the environment.

On the production side, organizational managers work to increase environmental sustainability, but on the consumption side, consumers are not only buying green but changing patterns of consumption that also help reduce environmental damage. Going to a gym, riding a bike or eating a salad are all activities that add to the GDP. But so does taking your private jet to your ski lodge, driving in your SUV to the ski slopes, and eating a steak. All consumption behaviors are not created equal and do not have the same impact on environmental sustainability. More sustainable lifestyles are emerging and they can be detected in consumption patterns. For example, young Americans seem less interested in owning cars than their older siblings and parents did. Ride-sharing, bike sharing and other transit options have become feasible due to the development of the smartphone. But sitting in an Uber or driving your own car are both economic activities that are counted in the GDP.

These consumption trends are more influenced by changing cultural norms than by public policy, and typically should not be subjects of policymaking. Exceptions might include consumption that has a direct negative impact on others such as driving while intoxicated or smoking in a public space. The environmental impact of consumption can also be reduced by new technologies. For example, streaming music and video has far less environmental impact than videos and discs that used to be manufactured, packaged and shipped before they were used.

It is ironic that some environmentalists along with some climate deniers share the belief that we must trade off economic growth and environmental protection. We can and must accomplish both. A reason that we cannot abandon economic development is that most people in the developed world like the way they live and will not give up their way of life. Asking them to do so dooms environmental advocates to political marginalization and failure. Due to the internet, even very poor people in the developing world see the way we live here, want it, and are demanding that their political regimes help them achieve their dreams. The absence of economic development leads to political instability and the potential for violence. Climate scientists often mention the impact of climate change on political instability and the phenomenon of climate refugees is well documented. But the path to climate mitigation is not through slower economic growth, but through economic growth that is steered toward environmental sustainability and away from gratuitous environmental destruction.

One of the first sustainability books I ever read was Ian McHarg’s Design with Nature. McHarg developed cluster development as an alternative to suburban sprawl. The idea was that rather than providing every home with a quarter acre of land and their own large yard, you would build the housing in the one area of the building site that would cause the least damage to natural drainage and eco-systems and preserve the rest of the land as a parkland for hiking and viewing. It turned out that most of the outdoor access people used in their homes was on their patios, and that suburban yards were not simply ecological disasters, but a burdensome waste for most homeowners. (This past June a wonderful piece summarizing McHarg’s ideas and influence appeared on the City Lab website and it is well worth reading.) McHarg demonstrated that with care, humans could build urban developments that might minimize rather than maximize environmental damage.

Sloppy management, the hunger for easy money and short-term profits, and ideological rigidity lead some to believe the environment must be sacrificed for economic growth. The belief that capitalism is evil and inevitably causes environmental destruction leads others to believe that sustainable economic development is not feasible. My view is that with enlightened design, sustainability management and cutting-edge technology we can harness human ingenuity to the practical problems of environmentally sustainable economic development. We can build and live in sustainable cities and end the climate and ecological crises that seem so overwhelming today.

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Steve, I so appreciate you perspective and using hiding in plain sight history to debunk conventional wisdom.

Can we really reduce resource extraction and pollution (including carbon) and maintain growth as currently measured by gross GDP? Renewable energy needed to replace existing consumption is itself a mass industrialisation operation. If the measure of growth was shifted to well-being, and energy and resource consumption were curtailed, and as you point out radical rational approaches to efficiency were implemented by regulations (driven by well-being measures) then I find it easier to imagine.

I think you are missing one important part of the criticism that capitalism is facing, that is income gap not only within the borders but outside the national borders. Income gap is one of the leading reasons for excessive consumption by some people. Most supporters of capitalism seem to stand against this idea. There is another issue of unfair trade policies and I don’t see most capitalist/ industrialized countries taking any clear stand on this issue in the near future. It also does not help that we keep refusing to acknowledge some quite dire problems capitalism has created that directly led to unsustainable habits. I don’t know whether the solution is reformed capitalism or some other economic system but the first step is not to deny some very fundamental issues with the current system and I will give you hint – look from the perspective of the most underprivileged because without that you are just speaking to your bubble.

Very well said. Often wondering whether it is possible to reform capitalism?

It seems to me that the US simply moved its pollution and production-based emissions elsewhere, such as China. If a US-based company moves its dirty factory to China, then it magically becomes “Chinese pollution” rather than “US pollution.” It’s a neat trick, but let’s not pat ourselves on the back. (We see the same bait and switch tactic used with carbon emissions.)

The point is that, in a global economy, it is incorrect to think in terms of any single country in isolation. The environmental impact of the US economy must be properly accounted by tracing everything we consume all the way back to the extraction of raw resources (e.g., mining, pumping) and every intermediate refinement, production, cultivation, assembly, transport, and processing step along the way…in ALL of the places in the world where it occurs. If such an accounting were made, I can imagine that the US environmental footprint in the world has never stopped growing, even if our own neighborhood is cleaner.

The point is that, in a global economy, it is incorrect to think in terms of any single country in isolation. The environmental impact of the US economy must be properly accounted by tracing everything we consume all the way back to the extraction of raw resources (e.g., mining, oil pumping) and every intermediate refinement, production, cultivation, assembly, transport, and processing step along the way…in ALL of the places in the world where it occurs.

how countries of the Global South can achieve economic development whilst maintaining environmental integrity for future generations.

The “climate crisis” is just the most obvious existential risk threatening the “ecosystem services” on which our civilization depends. If our nonstop growth-addicted capitalist economy were a species, then the climate crisis would be what ecologists call a “limiting factor”. It happens to be the most dire but it certainly isn’t the only existential threat to ecosystem services that support our civilization. If we magically fix climate, but fail to kick the nonstop growth addiction habit, then we will exploit the earth’s systems until some other limiting factor threatens to bring down civilization. This is really quite simple. We don’t know how to do capitalism without growth, but in a finite system anything that grows nonstop and forever will kill the host. Part of me feels like us advocates of some sort of “steady state” economy are like reformers urging chain smokers to quit cold turkey. And the nonstop “green” growth advocates tell the smokers they can puff away if they switch to low tar while calling us shills for Big Tobacco. It might be hard to get away from economic growth, and it might be impossible. But as Sarek said to Spock in the Trek reboot, “What is necessary is NEVER unwise.”

There’s no reason why a green revolution shouldn’t create countless jobs. I suspect paid scaremongering propaganda backed by fossil fuel companies has created a false dichotomy. Directing our resources towards repairing our damaged environment, eliminating fossil fuel subsidies and redirecting those subsidies towards clean energy and all the jobs that would go with it seems like a win win solution.

As a concerned fourteen-year-old, I believe we have to digress from making this a political issue. It is at its heart a choice between life or death. Economic growth won’t matter when all that’s left on Earth are dust storms, heat, and a few lucky survivors. It’s our choice to make, and there is only one correct answer to this issue: go renewable or face the consequences.

Mr. Cohen cites lots of facts. but in the end, climate change(planet pollution) is getting worse. Either that, or the climatologists are all wrong.

Decoupling is a dangerous fairy tale fo promote. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0164733

Thank you. This is a counter to the hand-waving piece above.

How about the consequences of economic development processes to the sustainability of natural resources

Both developing and underdeveloped countries have left out the issue of climate change action as they all fail to provide enabling conditions for policy implementation. Land reform policies, industrialisation policies and the use of weapons of mass destruction planned wars that appear more economical than political have grievously affected the environment. Policies sound better during international conferences but their implementation and evaluation remain peripheral to the direct beneficiaries—an outcry to community engagement for policy implementation.

I really needed this for a article I was writing. I wanted to see others perspective. Thank you 🙂

I also like all the reasonings you put. You backup what you have said. All the other articles I’ve been to don’t really specify.

Dude, this is a baldface lie, and it is typical of the level of denial about how the normal operation of any economy akin to what we have thrives on producing endless energy consumming revenue streams of increasingly false value. There is no way to grow MATERIAL production, creating new things while perfectly serviceable older things go to the trash by denied design, I see this every damn day, we lie about, lie, lie, lie, this is madness, anyone who failes to confront the problem of waste and growth and value emptiness is both deluded and furthering the problem, we are drowning in unneeded luxury and convenience and we are worsening our plight furthering the status quo, we seem hell bent on collapse by now. THIS IS A PATENT FALSEHOOD: :” The climate problem is not caused by economic growth, but by the absence of effective public policy designed to reduce greenhouse gas emissions.” Dude, we need to cosume less energy per capita and globally, nothing less will mitigate a thing, why ar\re people so deluded about what we really need to do here, this is AUTO-BIOCIDE by now!!!

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THE SDGS IN ACTION.

What are the sustainable development goals.

The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.

The 17 SDGs are integrated—they recognize that action in one area will affect outcomes in others, and that development must balance social, economic and environmental sustainability.

Countries have committed to prioritize progress for those who're furthest behind. The SDGs are designed to end poverty, hunger, AIDS, and discrimination against women and girls.

The creativity, knowhow, technology and financial resources from all of society is necessary to achieve the SDGs in every context.

Eradicating poverty in all its forms remains one of the greatest challenges facing humanity. While the number of people living in extreme poverty dropped by more than half between 1990 and 2015, too many are still struggling for the most basic human needs.

As of 2015, about 736 million people still lived on less than US$1.90 a day; many lack food, clean drinking water and sanitation. Rapid growth in countries such as China and India has lifted millions out of poverty, but progress has been uneven. Women are more likely to be poor than men because they have less paid work, education, and own less property.

Progress has also been limited in other regions, such as South Asia and sub-Saharan Africa, which account for 80 percent of those living in extreme poverty. New threats brought on by climate change, conflict and food insecurity, mean even more work is needed to bring people out of poverty.

The SDGs are a bold commitment to finish what we started, and end poverty in all forms and dimensions by 2030. This involves targeting the most vulnerable, increasing basic resources and services, and supporting communities affected by conflict and climate-related disasters.

736 million people still live in extreme poverty.

10 percent of the world’s population live in extreme poverty, down from 36 percent in 1990.

Some 1.3 billion people live in multidimensional poverty.

Half of all people living in poverty are under 18.

One person in every 10 is extremely poor.

Goal targets

• By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
• Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable
• By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance
• By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters
• Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions
• Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

SDGs in Action

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Zero hunger.

Zero Hunger

The number of undernourished people has dropped by almost half in the past two decades because of rapid economic growth and increased agricultural productivity. Many developing countries that used to suffer from famine and hunger can now meet their nutritional needs. Central and East Asia, Latin America and the Caribbean have all made huge progress in eradicating extreme hunger.

Unfortunately, extreme hunger and malnutrition remain a huge barrier to development in many countries. There are 821 million people estimated to be chronically undernourished as of 2017, often as a direct consequence of environmental degradation, drought and biodiversity loss. Over 90 million children under five are dangerously underweight. Undernourishment and severe food insecurity appear to be increasing in almost all regions of Africa, as well as in South America.

The SDGs aim to end all forms of hunger and malnutrition by 2030, making sure all people–especially children–have sufficient and nutritious food all year. This involves promoting sustainable agricultural, supporting small-scale farmers and equal access to land, technology and markets. It also requires international cooperation to ensure investment in infrastructure and technology to improve agricultural productivity.

The number of undernourished people reached 821 million in 2017.

In 2017 Asia accounted for nearly two thirds, 63 percent, of the world’s hungry.

Nearly 151 million children under five, 22 percent, were still stunted in 2017.

More than 1 in 8 adults is obese.

1 in 3 women of reproductive age is anemic.

26 percent of workers are employed in agriculture.

• By 2030, end all forms of malnutrition, including achieving, by 2025, the internationally agreed targets on stunting and wasting in children under 5 years of age, and address the nutritional needs of adolescent girls, pregnant and lactating women and older persons
• By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment
• By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality
• By 2020, maintain the genetic diversity of seeds, cultivated plants and farmed and domesticated animals and their related wild species, including through soundly managed and diversified seed and plant banks at the national, regional and international levels, and promote access to and fair and equitable sharing of benefits arising from the utilization of genetic resources and associated traditional knowledge, as internationally agreed
• Increase investment, including through enhanced international cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks in order to enhance agricultural productive capacity in developing countries, in particular least developed countries
• Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round
• Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility.

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Good health and well-being.

We have made great progress against several leading causes of death and disease. Life expectancy has increased dramatically; infant and maternal mortality rates have declined, we’ve turned the tide on HIV and malaria deaths have halved.

Good health is essential to sustainable development and the 2030 Agenda reflects the complexity and interconnectedness of the two. It takes into account widening economic and social inequalities, rapid urbanization, threats to the climate and the environment, the continuing burden of HIV and other infectious diseases, and emerging challenges such as noncommunicable diseases. Universal health coverage will be integral to achieving SDG 3, ending poverty and reducing inequalities. Emerging global health priorities not explicitly included in the SDGs, including antimicrobial resistance, also demand action.

But the world is off-track to achieve the health-related SDGs. Progress has been uneven, both between and within countries. There’s a 31-year gap between the countries with the shortest and longest life expectancies. And while some countries have made impressive gains, national averages hide that many are being left behind. Multisectoral, rights-based and gender-sensitive approaches are essential to address inequalities and to build good health for all.

At least 400 million people have no basic healthcare, and 40 percent lack social protection.

More than 1.6 billion people live in fragile settings where protracted crises, combined with weak national capacity to deliver basic health services, present a significant challenge to global health.

By the end of 2017, 21.7 million people living with HIV were receiving antiretroviral therapy. Yet more than 15 million people are still waiting for treatment.

Every 2 seconds someone aged 30 to 70 years dies prematurely from noncommunicable diseases - cardiovascular disease, chronic respiratory disease, diabetes or cancer.

7 million people die every year from exposure to fine particles in polluted air.

More than one of every three women have experienced either physical or sexual violence at some point in their life resulting in both short- and long-term consequences for their physical, mental, and sexual and reproductive health.

• By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births
• By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as 25 per 1,000 live births
• By 2030, end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and combat hepatitis, water-borne diseases and other communicable diseases
• By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being
• Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol
• By 2020, halve the number of global deaths and injuries from road traffic accidents
• By 2030, ensure universal access to sexual and reproductive health-care services, including for family planning, information and education, and the integration of reproductive health into national strategies and programmes
• Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all
• By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination
• Strengthen the implementation of the World Health Organization Framework Convention on Tobacco Control in all countries, as appropriate
• Support the research and development of vaccines and medicines for the communicable and noncommunicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all
• Substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries, especially in least developed countries and small island developing States
• Strengthen the capacity of all countries, in particular developing countries, for early warning, risk reduction and management of national and global health risks

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Quality education.

Since 2000, there has been enormous progress in achieving the target of universal primary education. The total enrollment rate in developing regions reached 91 percent in 2015, and the worldwide number of children out of school has dropped by almost half. There has also been a dramatic increase in literacy rates, and many more girls are in school than ever before. These are all remarkable successes.

Progress has also been tough in some developing regions due to high levels of poverty, armed conflicts and other emergencies. In Western Asia and North Africa, ongoing armed conflict has seen an increase in the number of children out of school. This is a worrying trend. While Sub-Saharan Africa made the greatest progress in primary school enrollment among all developing regions – from 52 percent in 1990, up to 78 percent in 2012 – large disparities still remain. Children from the poorest households are up to four times more likely to be out of school than those of the richest households. Disparities between rural and urban areas also remain high.

Achieving inclusive and quality education for all reaffirms the belief that education is one of the most powerful and proven vehicles for sustainable development. This goal ensures that all girls and boys complete free primary and secondary schooling by 2030. It also aims to provide equal access to affordable vocational training, to eliminate gender and wealth disparities, and achieve universal access to a quality higher education.

Enrollment in primary education in developing countries has reached 91 percent.

Still, 57 million primary-aged children remain out of school, more than half of them in sub-Saharan Africa.

In developing countries, one in four girls is not in school.

About half of all out-of-school children of primary school age live in conflict-affected areas.

103 million youth worldwide lack basic literacy skills, and more than 60 percent of them are women.

6 out of 10 children and adolescents are not achieving a minimum level of proficiency in reading and math.

• By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes
• By 2030, ensure that all girls and boys have access to quality early childhood development, care and preprimary education so that they are ready for primary education
• By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university
• By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship
• By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations
• By 2030, ensure that all youth and a substantial proportion of adults, both men and women, achieve literacy and numeracy
• By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development
• Build and upgrade education facilities that are child, disability and gender sensitive and provide safe, nonviolent, inclusive and effective learning environments for all
• By 2020, substantially expand globally the number of scholarships available to developing countries, in particular least developed countries, small island developing States and African countries, for enrolment in higher education, including vocational training and information and communications technology, technical, engineering and scientific programmes, in developed countries and other developing countries
• By 2030, substantially increase the supply of qualified teachers, including through international cooperation for teacher training in developing countries, especially least developed countries and small island developing states

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Gender equality.

Gender Equality

Ending all discrimination against women and girls is not only a basic human right, it’s crucial for sustainable future; it’s proven that empowering women and girls helps economic growth and development.

UNDP has made gender equality central to its work and we’ve seen remarkable progress in the past 20 years. There are more girls in school now compared to 15 years ago, and most regions have reached gender parity in primary education.

But although there are more women than ever in the labour market, there are still large inequalities in some regions, with women systematically denied the same work rights as men. Sexual violence and exploitation, the unequal division of unpaid care and domestic work, and discrimination in public office all remain huge barriers. Climate change and disasters continue to have a disproportionate effect on women and children, as do conflict and migration.

It is vital to give women equal rights land and property, sexual and reproductive health, and to technology and the internet. Today there are more women in public office than ever before, but encouraging more women leaders will help achieve greater gender equality.

Women earn only 77 cents for every dollar that men get for the same work.

35 percent of women have experienced physical and/or sexual violence.

Women represent just 13 percent of agricultural landholders.

Almost 750 million women and girls alive today were married before their 18th birthday.

Two thirds of developing countries have achieved gender parity in primary education.

Only 24 percent of national parliamentarians were women as of November 2018, a small increase from 11.3 percent in 1995.

• End all forms of discrimination against all women and girls everywhere
• Eliminate all forms of violence against all women and girls in the public and private spheres, including trafficking and sexual and other types of exploitation
• Eliminate all harmful practices, such as child, early and forced marriage and female genital mutilation
• Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriate
• Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decisionmaking in political, economic and public life
• Ensure universal access to sexual and reproductive health and reproductive rights as agreed in accordance with the Programme of Action of the International Conference on Population and Development and the Beijing Platform for Action and the outcome documents of their review conferences
• Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources, in accordance with national laws
• Enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women
• Adopt and strengthen sound policies and enforceable legislation for the promotion of gender equality and the empowerment of all women and girls at all levels

Climate governance, adaptation...

"The work might be hard, but I...

Clean water and sanitation.

Water scarcity affects more than 40 percent of people, an alarming figure that is projected to rise as temperatures do. Although 2.1 billion people have improved water sanitation since 1990, dwindling drinking water supplies are affecting every continent.

More and more countries are experiencing water stress, and increasing drought and desertification is already worsening these trends. By 2050, it is projected that at least one in four people will suffer recurring water shortages.

Safe and affordable drinking water for all by 2030 requires we invest in adequate infrastructure, provide sanitation facilities, and encourage hygiene. Protecting and restoring water-related ecosystems is essential.

Ensuring universal safe and affordable drinking water involves reaching over 800 million people who lack basic services and improving accessibility and safety of services for over two billion.

In 2015, 4.5 billion people lacked safely managed sanitation services (with adequately disposed or treated excreta) and 2.3 billion lacked even basic sanitation.

71 percent of the global population, 5.2 billion people, had safely-managed drinking water in 2015, but 844 million people still lacked even basic drinking water.

39 percent of the global population, 2.9 billion people, had safe sanitation in 2015, but 2.3 billion people still lacked basic sanitation. 892 million people practiced open defecation.

80 percent of wastewater goes into waterways without adequate treatment.

Water stress affects more than 2 billion people, with this figure projected to increase.

80 percent of countries have laid the foundations for integrated water resources management.

The world has lost 70 percent of its natural wetlands over the last century.

• By 2030, achieve universal and equitable access to safe and affordable drinking water for all
• By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations
• By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally
• By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity
• By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate
• By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes
• By 2030, expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies
• Support and strengthen the participation of local communities in improving water and sanitation management

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Affordable and clean energy.

Between 2000 and 2018, the number of people with electricity increased from 78 to 90 percent, and the numbers without electricity dipped to 789 million.

Yet as the population continues to grow, so will the demand for cheap energy, and an economy reliant on fossil fuels is creating drastic changes to our climate.

Investing in solar, wind and thermal power, improving energy productivity, and ensuring energy for all is vital if we are to achieve SDG 7 by 2030.

Expanding infrastructure and upgrading technology to provide clean and more efficient energy in all countries will encourage growth and help the environment.  

One out of 10 people still lacks electricity, and most live in rural areas of the developing world. More than half are in sub-Saharan Africa.

Energy is by far the main contributor to climate change. It accounts for 73 percent of human-caused greenhouse gases.

Energy efficiency is key; the right efficiency policies could enable the world to achieve more than 40 percent of the emissions cuts needed to reach its climate goals without new technology.

Almost a third of the world’s population—2.8 billion—rely on polluting and unhealthy fuels for cooking.

As of 2017, 17.5 percent of power was generated through renewable sources.

The renewable energy sector employed a record 11.5 million people in 2019. The changes needed in energy production and uses to achieve the Paris Agreement target of limiting the rise in temperature to below 2C can create 18 million jobs.

• By 2030, ensure universal access to affordable, reliable and modern energy services
• By 2030, increase substantially the share of renewable energy in the global energy mix
• By 2030, double the global rate of improvement in energy efficiency
• By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology
• By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing States, and land-locked developing coun

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Decent work and economic growth.

Over the past 25 years the number of workers living in extreme poverty has declined dramatically, despite the lasting impact of the 2008 economic crisis and global recession. In developing countries, the middle class now makes up more than 34 percent of total employment – a number that has almost tripled between 1991 and 2015.

However, as the global economy continues to recover we are seeing slower growth, widening inequalities, and not enough jobs to keep up with a growing labour force. According to the International Labour Organization, more than 204 million people were unemployed in 2015.

The SDGs promote sustained economic growth, higher levels of productivity and technological innovation. Encouraging entrepreneurship and job creation are key to this, as are effective measures to eradicate forced labour, slavery and human trafficking. With these targets in mind, the goal is to achieve full and productive employment, and decent work, for all women and men by 2030.

An estimated 172 million people worldwide were without work in 2018 - an unemployment rate of 5 percent.

As a result of an expanding labour force, the number of unemployed is projected to increase by 1 million every year and reach 174 million by 2020.

Some 700 million workers lived in extreme or moderate poverty in 2018, with less than US$3.20 per day.

Women’s participation in the labour force stood at 48 per cent in 2018, compared with 75 percent for men. Around 3 in 5 of the 3.5 billion people in the labour force in 2018 were men.

Overall, 2 billion workers were in informal employment in 2016, accounting for 61 per cent of the world’s workforce.

Many more women than men are underutilized in the labour force—85 million compared to 55 million.

• Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries
• Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
• Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services
• Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead
• By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value
• By 2020, substantially reduce the proportion of youth not in employment, education or training
• Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms
• Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment
• By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products
• Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all
• Increase Aid for Trade support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries
• By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization

Industry, innovation and infrastructure

Investment in infrastructure and innovation are crucial drivers of economic growth and development. With over half the world population now living in cities, mass transport and renewable energy are becoming ever more important, as are the growth of new industries and information and communication technologies.

Technological progress is also key to finding lasting solutions to both economic and environmental challenges, such as providing new jobs and promoting energy efficiency. Promoting sustainable industries, and investing in scientific research and innovation, are all important ways to facilitate sustainable development.

More than 4 billion people still do not have access to the Internet, and 90 percent are from the developing world. Bridging this digital divide is crucial to ensure equal access to information and knowledge, as well as foster innovation and entrepreneurship.   

Worldwide, 2.3 billion people lack access to basic sanitation.

In some low-income African countries, infrastructure constraints cut businesses’ productivity by around 40 percent.

2.6 billion people in developing countries do not have access to constant electricity.

More than 4 billion people still do not have access to the Internet; 90 percent of them are in the developing world.

The renewable energy sectors currently employ more than 2.3 million people; the number could reach 20 million by 2030.

In developing countries, barely 30 percent of agricultural products undergo industrial processing, compared to 98 percent high-income countries.

• Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all
• Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries
• Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets
• By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
• Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending
• Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States 18
• Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities
• Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020

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Reduced inequalities.

Income inequality is on the rise—the richest 10 percent have up to 40 percent of global income whereas the poorest 10 percent earn only between 2 to 7 percent. If we take into account population growth inequality in developing countries, inequality has increased by 11 percent.

Income inequality has increased in nearly everywhere in recent decades, but at different speeds. It’s lowest in Europe and highest in the Middle East.

These widening disparities require sound policies to empower lower income earners, and promote economic inclusion of all regardless of sex, race or ethnicity.

Income inequality requires global solutions. This involves improving the regulation and monitoring of financial markets and institutions, encouraging development assistance and foreign direct investment to regions where the need is greatest. Facilitating the safe migration and mobility of people is also key to bridging the widening divide.

In 2016, 22 percent of global income was received by the top 1 percent compared with 10 percent of income for the bottom 50 percent.

In 1980, the top one percent had 16 percent of global income. The bottom 50 percent had 8 percent of income.

Economic inequality is largely driven by the unequal ownership of capital. Since 1980, very large transfers of public to private wealth occurred in nearly all countries. The global wealth share of the top 1 percent was 33 percent in 2016.

Under "business as usual", the top 1 percent global wealth will reach 39 percent by 2050.

Women spend, on average, twice as much time on unpaid housework as men.

Women have as much access to financial services as men in just 60 percent of the countries assessed and to land ownership in just 42 percent of the countries assessed.

• By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average
• By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status
• Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard
• Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality
• Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations
• Ensure enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions
• Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies
• Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements
• Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes
• By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent

Sustainable cities and communities

More than half of us  live in cities. By 2050, two-thirds of all humanity—6.5 billion people—will be urban. Sustainable development cannot be achieved without significantly transforming the way we build and manage our urban spaces.

The rapid growth of cities—a result of rising populations and increasing migration—has led to a boom in mega-cities, especially in the developing world, and slums are becoming a more significant feature of urban life.

Making cities sustainable means creating career and business opportunities, safe and affordable housing, and building resilient societies and economies. It involves investment in public transport, creating green public spaces, and improving urban planning and management in participatory and inclusive ways.

In 2018, 4.2 billion people, 55 percent of the world’s population, lived in cities. By 2050, the urban population is expected to reach 6.5 billion.

Cities occupy just 3 percent of the Earth’s land but account for 60 to 80 percent of energy consumption and at least 70 percent of carbon emissions.

828 million people are estimated to live in slums, and the number is rising.

In 1990, there were 10 cities with 10 million people or more; by 2014, the number of mega-cities rose to 28, and was expected to reach 33 by 2018. In the future, 9 out of 10 mega-cities will be in the developing world.

In the coming decades, 90 percent of urban expansion will be in the developing world.

The economic role of cities is significant. They generate about 80 percent of the global GDP.

• By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums
• By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons
• By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries
• Strengthen efforts to protect and safeguard the world’s cultural and natural heritage
• By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations
• By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management
• By 2030, provide universal access to safe, inclusive and accessible, green and public spaces, in particular for women and children, older persons and persons with disabilities
• Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning
• By 2020, substantially increase the number of cities and human settlements adopting and implementing integrated policies and plans towards inclusion, resource efficiency, mitigation and adaptation to climate change, resilience to disasters, and develop and implement, in line with the Sendai Framework for Disaster Risk Reduction 2015-2030, holistic disaster risk management at all levels
• Support least developed countries, including through financial and technical assistance, in building sustainable and resilient buildings utilizing local materials

The beginning of the end for p...

"I want my old life back."

Responsible consumption and production.

Achieving economic growth and sustainable development requires that we urgently reduce our ecological footprint by changing the way we produce and consume goods and resources. Agriculture is the biggest user of water worldwide, and irrigation now claims close to 70 percent of all freshwater for human use.

The efficient management of our shared natural resources, and the way we dispose of toxic waste and pollutants, are important targets to achieve this goal. Encouraging industries, businesses and consumers to recycle and reduce waste is equally important, as is supporting developing countries to move towards more sustainable patterns of consumption by 2030.

A large share of the world population is still consuming far too little to meet even their basic needs.  Halving the per capita of global food waste at the retailer and consumer levels is also important for creating more efficient production and supply chains. This can help with food security, and shift us towards a more resource efficient economy.

1.3 billion tonnes of food is wasted every year, while almost 2 billion people go hungry or undernourished.

The food sector accounts for around 22 percent of total greenhouse gas emissions, largely from the conversion of forests into farmland.

Globally, 2 billion people are overweight or obese.

Only 3 percent of the world’s water is fresh (drinkable), and humans are using it faster than nature can replenish it.

If people everywhere switched to energy efficient lightbulbs, the world would save US$120 billion annually.

One-fifth of the world’s final energy consumption in 2013 was from renewable sources.

• Implement the 10-year framework of programmes on sustainable consumption and production, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries
• By 2030, achieve the sustainable management and efficient use of natural resources
• By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses
• By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment
• By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
• Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle
• Promote public procurement practices that are sustainable, in accordance with national policies and priorities
• By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature
• Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production
• Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products
• Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities

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Climate action.

There is no country that is not experiencing the drastic effects of climate change. Greenhouse gas emissions are more than 50 percent higher than in 1990. Global warming is causing long-lasting changes to our climate system, which threatens irreversible consequences if we do not act.

The annual average economic losses from climate-related disasters are in the hundreds of billions of dollars. This is not to mention the human impact of geo-physical disasters, which are 91 percent climate-related, and which between 1998 and 2017 killed 1.3 million people, and left 4.4 billion injured. The goal aims to mobilize US$100 billion annually by 2020 to address the needs of developing countries to both adapt to climate change and invest in low-carbon development.

Supporting vulnerable regions will directly contribute not only to Goal 13 but also to the other SDGs. These actions must also go hand in hand with efforts to integrate disaster risk measures, sustainable natural resource management, and human security into national development strategies. It is still possible, with strong political will, increased investment, and using existing technology, to limit the increase in global mean temperature to two degrees Celsius above pre-industrial levels, aiming at 1.5 ° C, but this requires urgent and ambitious collective action.

As of 2017 humans are estimated to have caused approximately 1.0°C of global warming above pre-industrial levels.

Sea levels have risen by about 20 cm (8 inches) since 1880 and are projected to rise another 30–122 cm (1 to 4 feet) by 2100.

To limit warming to 1.5C, global net CO2 emissions must drop by 45% between 2010 and 2030, and reach net zero around 2050.

Climate pledges under The Paris Agreement cover only one third of the emissions reductions needed to keep the world below 2°C.

Bold climate action could trigger at least US$26 trillion in economic benefits by 2030.

The energy sector alone will create around 18 million more jobs by 2030, focused specifically on sustainable energy.

• Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries
• Integrate climate change measures into national policies, strategies and planning
• Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning
• Implement the commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly $100 billion annually by 2020 from all sources to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation and fully operationalize the Green Climate Fund through its capitalization as soon as possible
• Promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing States, including focusing on women, youth and local and marginalized communities

Life Below Water

The world’s oceans – their temperature, chemistry, currents and life – drive global systems that make the Earth habitable for humankind. How we manage this vital resource is essential for humanity as a whole, and to counterbalance the effects of climate change.

Over three billion people depend on marine and coastal biodiversity for their livelihoods. However, today we are seeing 30 percent of the world’s fish stocks overexploited, reaching below the level at which they can produce sustainable yields.

Oceans also absorb about 30 percent of the carbon dioxide produced by humans, and we are seeing a 26 percent rise in ocean acidification since the beginning of the industrial revolution. Marine pollution, an overwhelming majority of which comes from land-based sources, is reaching alarming levels, with an average of 13,000 pieces of plastic litter to be found on every square kilometre of ocean.

The SDGs aim to sustainably manage and protect marine and coastal ecosystems from pollution, as well as address the impacts of ocean acidification. Enhancing conservation and the sustainable use of ocean-based resources through international law will also help mitigate some of the challenges facing our oceans.

The ocean covers three quarters of the Earth’s surface and represents 99 percent of the living space on the planet by volume.

The ocean contains nearly 200,000 identified species, but actual numbers may lie in the millions.

As much as 40 percent of the ocean is heavily affected by pollution, depleted fisheries, loss of coastal habitats and other human activities.

The ocean absorbs about 30 percent of carbon dioxide produced by humans, buffering the impacts of global warming.

More than 3 billion people depend on marine and coastal biodiversity for their livelihoods.

The market value of marine and coastal resources and industries is estimated at US$3 trillion per year, about 5 percent of global GDP.

• By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including marine debris and nutrient pollution
• By 2020, sustainably manage and protect marine and coastal ecosystems to avoid significant adverse impacts, including by strengthening their resilience, and take action for their restoration in order to achieve healthy and productive oceans
• Minimize and address the impacts of ocean acidification, including through enhanced scientific cooperation at all levels
• By 2020, effectively regulate harvesting and end overfishing, illegal, unreported and unregulated fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biological characteristics
• By 2020, conserve at least 10 per cent of coastal and marine areas, consistent with national and international law and based on the best available scientific information
• By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation
• By 2030, increase the economic benefits to Small Island developing States and least developed countries from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism
• Increase scientific knowledge, develop research capacity and transfer marine technology, taking into account the Intergovernmental Oceanographic Commission Criteria and Guidelines on the Transfer of Marine Technology, in order to improve ocean health and to enhance the contribution of marine biodiversity to the development of developing countries, in particular small island developing States and least developed countries
• Provide access for small-scale artisanal fishers to marine resources and markets
• Enhance the conservation and sustainable use of oceans and their resources by implementing international law as reflected in UNCLOS, which provides the legal framework for the conservation and sustainable use of oceans and their resources, as recalled in paragraph 158 of The Future We Want

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Small island developing states and pathways t..., life on land.

Human life depends on the earth as much as the ocean for our sustenance and livelihoods. Plant life provides 80 percent of the human diet, and we rely on agriculture as an important economic resources. Forests cover 30 percent of the Earth’s surface, provide vital habitats for millions of species, and important sources for clean air and water, as well as being crucial for combating climate change.

Every year, 13 million hectares of forests are lost, while the persistent degradation of drylands has led to the desertification of 3.6 billion hectares, disproportionately affecting poor communities.

While 15 percent of land is protected, biodiversity is still at risk. Nearly 7,000 species of animals and plants have been illegally traded. Wildlife trafficking not only erodes biodiversity, but creates insecurity, fuels conflict, and feeds corruption.

Urgent action must be taken to reduce the loss of natural habitats and biodiversity which are part of our common heritage and support global food and water security, climate change mitigation and adaptation, and peace and security.

Around 1.6 billion people depend on forests for their livelihoods.

Forests are home to more than 80 percent of all terrestrial species of animals, plants and insects.

2.6 billion people depend directly on agriculture for a living.

Nature-based climate solutions can contribute about a third of CO2 reductions by 2030.

The value of ecosystems to human livelihoods and well-being is $US125 trillion per year.v

Mountain regions provide 60-80 percent of the Earth's fresh water.

• By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains and drylands, in line with obligations under international agreements
• By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally
• By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world
• By 2030, ensure the conservation of mountain ecosystems, including their biodiversity, in order to enhance their capacity to provide benefits that are essential for sustainable development
• Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity and, by 2020, protect and prevent the extinction of threatened species
• Promote fair and equitable sharing of the benefits arising from the utilization of genetic resources and promote appropriate access to such resources, as internationally agreed
• Take urgent action to end poaching and trafficking of protected species of flora and fauna and address both demand and supply of illegal wildlife products
• By 2020, introduce measures to prevent the introduction and significantly reduce the impact of invasive alien species on land and water ecosystems and control or eradicate the priority species
• By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts
• Mobilize and significantly increase financial resources from all sources to conserve and sustainably use biodiversity and ecosystems
• Mobilize significant resources from all sources and at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance such management, including for conservation and reforestation
• Enhance global support for efforts to combat poaching and trafficking of protected species, including by increasing the capacity of local communities to pursue sustainable livelihood opportunities

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Peace, justice and strong institutions.

We cannot hope for sustainable development without peace, stability, human rights and effective governance, based on the rule of law. Yet our world is increasingly divided. Some regions enjoy peace, security and prosperity, while others fall into seemingly endless cycles of conflict and violence. This is not inevitable and must be addressed.

Armed violence and insecurity have a destructive impact on a country’s development, affecting economic growth, and often resulting in grievances that last for generations. Sexual violence, crime, exploitation and torture are also prevalent where there is conflict, or no rule of law, and countries must take measures to protect those who are most at risk

The SDGs aim to significantly reduce all forms of violence, and work with governments and communities to end conflict and insecurity. Promoting the rule of law and human rights are key to this process, as is reducing the flow of illicit arms and strengthening the participation of developing countries in the institutions of global governance.

By the end of 2017, 68.5 million people had been forcibly displaced as a result of persecution, conflict, violence or human rights violations.

There are at least 10 million stateless people who have been denied nationality and its related rights.

Corruption, bribery, theft and tax evasion cost developing countries US$1.26 trillion per year.

49 countries lack laws protecting women from domestic violence.

In 46 countries, women now hold more than 30 percent of seats in at least one chamber of national parliament.

1 billion people are legally ‘invisible’ because they cannot prove who they are. This includes an estimated 625 million children under 14 whose births were never registered.

• Significantly reduce all forms of violence and related death rates everywhere
• End abuse, exploitation, trafficking and all forms of violence against and torture of children
• Promote the rule of law at the national and international levels and ensure equal access to justice for all
• By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime
• Substantially reduce corruption and bribery in all their forms
• Develop effective, accountable and transparent institutions at all levels
• Ensure responsive, inclusive, participatory and representative decision-making at all levels
• Broaden and strengthen the participation of developing countries in the institutions of global governance
• By 2030, provide legal identity for all, including birth registration
• Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements
• Strengthen relevant national institutions, including through international cooperation, for building capacity at all levels, in particular in developing countries, to prevent violence and combat terrorism and crime
• Promote and enforce non-discriminatory laws and policies for sustainable development

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Partnerships for the goals.

The SDGs can only be realized with strong global partnerships and cooperation. Official Development Assistance remained steady but below target, at US$147 billion in 2017. While humanitarian crises brought on by conflict or natural disasters continue to demand more financial resources and aid. Many countries also require Official Development Assistance to encourage growth and trade.

The world is more interconnected than ever. Improving access to technology and knowledge is an important way to share ideas and foster innovation. Coordinating policies to help developing countries manage their debt, as well as promoting investment for the least developed, is vital for sustainable growth and development.

The goals aim to enhance North-South and South-South cooperation by supporting national plans to achieve all the targets. Promoting international trade, and helping developing countries increase their exports is all part of achieving a universal rules-based and equitable trading system that is fair and open and benefits all.

The UN Conference on Trade and Development (UNCTAD) says achieving SDGs will require US$5 trillion to $7 trillion in annual investment.

Total official development assistance reached US$147.2 billion in 2017.

In 2017, international remittances totaled US$613 billion; 76 percent of it went to developing countries.

In 2016, 6 countries met the international target to keep official development assistance at or above 0.7 percent of gross national income.

Sustainable and responsible investments represent high-potential sources of capital for SDGs. As of 2016, US$18.2 trillion was invested in this asset class.

The bond market for sustainable business is growing. In 2018 global green bonds reached US$155.5billion, up 78 percent from previous year.

• Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection
• Developed countries to implement fully their official development assistance commitments, including the commitment by many developed countries to achieve the target of 0.7 per cent of ODA/GNI to developing countries and 0.15 to 0.20 per cent of ODA/GNI to least developed countries ODA providers are encouraged to consider setting a target to provide at least 0.20 per cent of ODA/GNI to least developed countries
• Mobilize additional financial resources for developing countries from multiple sources
• Assist developing countries in attaining long-term debt sustainability through coordinated policies aimed at fostering debt financing, debt relief and debt restructuring, as appropriate, and address the external debt of highly indebted poor countries to reduce debt distress
• Adopt and implement investment promotion regimes for least developed countries  
• Enhance North-South, South-South and triangular regional and international cooperation on and access to science, technology and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, in particular at the United Nations level, and through a global technology facilitation mechanism
• Promote the development, transfer, dissemination and diffusion of environmentally sound technologies to developing countries on favourable terms, including on concessional and preferential terms, as mutually agreed
• Fully operationalize the technology bank and science, technology and innovation capacity-building mechanism for least developed countries by 2017 and enhance the use of enabling technology, in particular information and communications technology  

Capacity building

• Enhance international support for implementing effective and targeted capacity-building in developing countries to support national plans to implement all the sustainable development goals, including through North-South, South-South and triangular cooperation  
• Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development Agenda
• Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports by 2020
• Realize timely implementation of duty-free and quota-free market access on a lasting basis for all least developed countries, consistent with World Trade Organization decisions, including by ensuring that preferential rules of origin applicable to imports from least developed countries are transparent and simple, and contribute to facilitating market access  

Systemic issues

Policy and institutional coherence

• Enhance global macroeconomic stability, including through policy coordination and policy coherence
• Enhance policy coherence for sustainable development
• Respect each country’s policy space and leadership to establish and implement policies for poverty eradication and sustainable development  

Multi-stakeholder partnerships

• Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries
• Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships  

Data, monitoring and accountability

• By 2020, enhance capacity-building support to developing countries, including for least developed countries and small island developing States, to increase significantly the availability of high-quality, timely and reliable data disaggregated by income, gender, age, race, ethnicity, migratory status, disability, geographic location and other characteristics relevant in national contexts
• By 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement gross domestic product, and support statistical capacity-building in developing countries

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Sustainable Development Goals Integration

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Assessing the Relationship between Poverty and Economic Growth: Does Sustainable Development Goal Can be Achieved?

1 Guangxi Investment Group Co., Ltd, Nan Ning Shi, China

Shahid Bashir

2 Business Studies Department, Namal Institute Mianwali, Mianwali, Pakistan

Mohamed Marie

3 Faculty of Commerce, Cairo University, Giza, Egypt

Associated Data

The data that support the findings of this study are openly available on request.

Income inequality, poverty, and economic growth are defined as an economy's exposure to exogenous shocks arising out of poverty. The study used various econometric estimations to measure the effect of inequality and poverty on economic development during 1990 to 2016 in Vietnam. Various econometric estimation tests confirmed the presence of a long-run association between inequality and poverty, and economic growth is the matter of poverty headcount ratio in Vietnam. When we added the investment-to-GDP ratio and the number of years in education, it decreases by -0.144. This is reduced to -0.05 when log population growth rate was added while the employment, the coefficient decreases to -0.04 and becomes statistically insignificant. We found a negative impact of poverty and we reassess the hypothesis's emphasis on inequality and poverty and their combining effect of inclusive economic growth. Interestingly our results verify the previous findings that inequality and poverty show a negative impact on economic growth. The negative impact of poverty and inequality on economic growth appears to be concentrated at the high poverty level. These findings recommend that poverty reduction policies should be beneficial in encouraging economic growth even if they do not decrease income inequality.

Introduction

Inclusive growth, poverty alleviation, and sustainable development are associated with each other, while poverty reduction is considered a sustainable development principle. Poverty in all shapes remains a vulnerable challenge facing humanity (Park and Mercado 2018 ; Omar and Inaba 2020 ). The Sustainable Development Goals (SDGs) are a daring pledge to finish poverty in all forms and dimensions through 2030. Worldwide life-threatening poverty deep-rooted in 2020 due to the interruption of the COVID-19. During the pandemic of COVID-19 and the worldwide economic recessions, the pace of poverty alleviation is slow down as compared to the desired level. Poverty-fighting losing its battle during this COVID-19 pandemic; it is likely that development will be set back for decades (Ouechtati 2020 ). Poverty is pushing millions of people into food shortage and lack of other necessities of life in Vietnam.

From an economic point of view, for two decades, Vietnam's GDP has increased by about 6–7 percent annually, with GDP per capita increasing from about $500 in 1990 to around $2000 in 2018 (Nguyen et al. 2020 ). Poverty has also been substantially decreased from 2014 to 9.8 percent in 2016, for instance through 4% (Do et al. 2021 ). The alleviation of poverty in Vietnam stimulates the private sector to raise the level of its consumption and the quality of life, in addition to the standard of living, in addition to the rise in the market for electricity (Feeny et al. 2021 ). The worldwide pandemic’s economic downturn may raise global poverty about 8% of the total human population or half a billion people, especially in the developing world (UNU-WIDER, 2020). Therefore, it's hard to end poverty by 2030 due to the global pandemic economic recession. In order to arrest the above mention problem and if we achieve an intended plan to target zero poverty according to the SDGs, there is a dire need for policy and decision-makers to reformulate their strategies and efficiently allocate their resources for the proposed objective for Vietnam poverty reduction. There is a dire need to develop and plan practical policy endorsements to shape the development plans on poverty alleviation, especially in the developing world (Erlando et al. 2020 ; Deutsch et al. 2020 ; Zhang et al. 2019 ), while (Li et al. 2020 ).

Poverty in Vietnam is a multifaceted phenomenon and thus is driven by a wide range of factors (Mohsin et al. 2021 ). According to the economic definition of poverty, a person is considered poor if they are unable to maintain a subsistence level of living (Neaime and Gaysset 2018 ). However, poverty alleviation cannot be defined in material terms alone but also encompasses various elements of social development (Mushtaq and Bruneau 2019 ). Development is how well-being and quality of life are improved by giving exposure and freedom that can be relished. Human beings, at their core, are desirous of social, cultural and political freedom, which, if given, helps foster self-efficacy that further aids welfare to an individual and social level (Gutiérrez-Romero and Ahamed 2021 ). The great efforts are needed from the integrated planning and government spending in Vietnam that will enable the economic project to kick off of poverty, as well as the local participation in the implementation and usage of different sources of financing. Availability of public safety, primary education, quality healthcare and sound infrastructure nurtures a sense of security and also paves the way to enhanced production capacity as well as greater employability which improves income and well-being of individuals (Nanda 2019 ).

Even with the affirmation of poverty as a social issue, some nations and countries fall below the poverty breadline. According to the ASEAN development report (Alvaredo and Gasparini 2015 ). According to the World Bank reports (2016), approximately 766 million people globally live below the poverty line with earnings less than $1.90 per day. Historical and political landscape plays an important role in shaping the structure of poverty in specific areas (Aghaei and Lin Lawell 2020 ; Balaji 2020 ).

A family in Vietnam is announced poor because most family members do not eat grains daily, do not eat roots or vegetables and fruits, dairy and eggs a few times a week. A household faces deprivation if they do not have enough food and any home sleep hungry or eats small meals during one year (Mutsonziwa and Fanta 2019 ). A family is considered poor if it experiences one full day of hunger during the last one of the year. The kind of fuel utilized for cooking is considerable for the health of a family unit, especially for ladies who are only engaged with cooking in Pakistan. On the off chance that for cooking, solid waste material, for example, dairy animal’s fertilizer, firewood, or coal, is utilized. The health of family unit individuals who take in such a domain for long stretches can be antagonistically influenced (Karim and Noy 2016 ) and (RI P 2018 ). Besides cooking, fuel additionally impacts nature. In a roundabout way, this measurement compares to MDG's Goal 7 to ensure environmental sustainability.

A family is announced poor on the off chance that for cooking, it utilizes wood, cow waste, or coal and heating they used solid fuel or wood. Possession of land, regardless of whether it is non-horticultural/urban or country/agrarian arrive, is a vital and profitable resource. Crosswise over rural ASEAN, the majority of the family units are related to the agricultural sector. They hold small farms and gain jobs via subsistence cultivation (Karim and Noy 2016 ). Along these lines, land possession, be it rural or non-rural, is considering as an imperative dimension of family units' welfare; what is more, it is incorporated as a different dimension in this examination. This measurement depends upon farming areas. Family units are first proclaimed poor or non-poor in measurement. A family is announced poor in rural land possession and does not possess livestock if they have less than one-acre land for crops (Awad-warrad and Muhtaseb 2017 ). If households have squatting, possession of land is considering poor. If the soil cover of land is not good and land is steep, then it means that households face deprivation in this dimension. If the family unit does not afford seeds and compost/ fertilizers, no access to sufficient water and labour force for crops in every growing season is pronounced poor. Non-farm belonging assesses a family’s non-wealth earning capabilities; they contact credit history, wealth, and saving (Lau et al. 2015 ).

Empirically, the current study addressed two simple questions: is there any negative association between economic growth and income inequality while measures the robust analysis of poverty (calculated US$1.90 income /day) by taking an explanatory variable for the economy's growth? Secondly, the relationship between economic growth and inequality associated with the level of poverty? To address these two questions, we measure the cross-country growth econometric estimation analysis for controlling poverty, inequality, and interaction. In order to control endogeneity, we employed a generalized method of moments, including numerous improvements to cope with an unbalanced panels model to regress the underlying variables.

Empirically, (i) we measured that poverty through regressions analysis that provides the effect of inequality and poverty on economic growth. Particularly, we evaluated the negative impact of inequality and poverty on economic growth based on poverty headcount ratio, the incidence of poverty, education, employment, investment to GDP ratio and Gini coefficient. (ii) We reassessed that when poverty is less than 30%, a statistically insignificant association between economic growth, inequality and poverty is noted. (iii) The contribution of this study is to see the objectives include exploring solutions to the problems of poverty in the policy. These problems are caused by the stability of the financial and economic sector in a low-rate regime. The study also focuses on catalyzing the given challenges due to resource dependence in the developing country.

The rest of the study is organized as follows; Sect. 2 constitutes the background and literature review. Section 3 presents the data and methodology. Section 4 provides findings and discussion, while Sect. 5 concludes the study while presenting policy implications.

Background and Brief Review of Literature

Vietnam household's level probability estimation is higher than a threshold variable of about 0.5 (Duong and Nghiem 2014 ). Based on Dutta's measure, the mean susceptibility is 17.50% in 2000, 13.70% in 2005, and the lowest mean about 9.12 in 2007. The average mean values that Vietnamese households had probability values of poverty falling in starting the year of 2000 and 13.70% next year in 2005 and continuous declined to 19.14% in 2007. That means the mean vulnerability values from (Tiep et al. 2021 ) measure are lesser than Dutta's measure for all study years. Based on a surveys report, the absolute poverty rates are 22.91% in the year 2000, the following year 18.40% in 2005, and last year 15.34% in 2007 and (Kouton 2021 ). These different statistical figures on absolute poverty and vulnerability indicate that vulnerable households might not be disadvantaged simultaneously and that low-income families are not inherently vulnerable (World Bank 2019 ).

According to World Bank, technically reported a 24.6% opinion reduction in poverty per headcount index. This result demonstrates that Vietnam was among the fastest reported poverty reduction achievements in early 1990 and mid-2005. Growth has also been relatively wide: actual incomes and well-being have increased in Vietnam. All urban and rural regions' 55% population of minorities is below the poverty line and 39% unemployment ratio with a Gini coefficient of 12.345% (Aparicio et al. 2020 ). During the change, but often slightly, the primary social indicators, including life expectancy, child mortality, and education, have been almost equally improved from 5 to 10% every year (Nguyen et al. 2020 ). Between 1999 and 2005, some nutrition measures enhanced rapidly, and children between the ages of five fell from 53% to 35.8%. However, others decreased much more slowly, for example, overweight children under five years. In Vietnam, average lifespan and child mortality were relatively high from 1990 to 200, but modest (relatively low) increases (from 85% in 1998 to 90% in 1999). Vietnam was also relatively high in the period between 1985 and 1999. After all, in these above measurements, the well before era from the pre‐1980s marks have speedy progress (Pham and Riedel 2019 ). Yet, success in poverty reduction has been unequal in several dimensions. Urban and rural inequality was high in 2006, but geographical changes were also significant for extreme poverty, 3.9% in urban versus 22.3%, rural areas, food poverty, 1.3%, and 9.6% (Thanh Binh and Van 2019 ). In Vietnam, northern regions show a high poverty ratio of about 48.0%, and food level poverty is 31.1%. In every household, 5.7% and 3.7% were reported to have extreme poverty and food poverty, respectively. The lowest poverty rate in each year’s survey (38.6% in 2008) and the most rapid decline in poverty, which decreases 3.3% each year during the 2008–2008 period.

Confirming the negative link between economic development and poverty: in the long term, sustainable economic growth leads to poverty reduction. In general, our 25-year research in Vietnamese provinces tests the relationship among 06 macroeconomic variables from 2012 to 2015: economic growth, (ii) the poverty rate; (iii) the rate of unemployment; (iv) the amount of public expenditure; (v) the value of export & import; (vi) public investment in the Vietnamese provinces. Firstly, the impact of public spending on economic growth is positive. Second, it has a negative impact on jobs, as well as export and import. Thirdly, the effect of public spending on unemployment is substantial and optimistic. Fourthly, poverty is negative, as is unemployment, export and import, and public expenditure.

Inequality and poverty might interrelate, having a negative impact on economic growth. As Bui and Nguyen ( 2017 ) concluded, an inequality can destabilize institutional efficiency that spreads economic security. Economic growth estimation, including control for inequality and incomes but not poverty, might not successfully capture drawback that reduces the growth. The impact of poverty can be distinct along with the effects of inequality. Furthermore, Ravallion (2002) argued that poverty negatively impacted consumption growth, and consequently, less poverty decreases with economic growth.

Methodology and Data Description

Non-baking financial institution and economic growth.

An alternative approach with neo-classical production functions has been used to measure the relationship between inequality, poverty, and economic growth. The neo-classical growth model was created by Solow and Swan (1956). This is done to achieve the study's objective regarding an estimate of how Vietnam's economic growth is affected by the individual welfare of non-banking financial institutes. This model explains how inputs of production functions, such as Capital series (K), aggregate Labor (L), and technological parameter (A), measure up to the total production of the economy (Xin-tu et al, 2021 , Afzal et al, 2017 , Youdeowei et al, 2019 ).

This growth rate of output per capita shown through the given Solow Swan growth model is dependent on the growth model parameters. Factors such as non-banking financial institutes, deposit interest rate, inflation and financial development determine the aggregate productivity ( A ) (Nguyen et al. 2021 ) and (Dang 2019 ). Hence, the following can be assumed:

According to Model 1, y represents the natural log of real gross domestic product (GDP) per capita, Gini shows Gini coefficients and P 0 has been taken as poverty headcount ratio through mediating role of education which represents the years of schooling, population growth rate and employment rate,

where  i  shows the country and, Gini shows Gini coefficients, pov shows the level of poverty, InvGDP shows investment to GDP ratio, P 0 shows poverty headcount ratio, Edu represents the years of schooling, Popgr signifies population growth rate, and Emp shows employment rate. We then measure the empirical estimation regression model to check the effect of inequality and poverty on economic growth. μi  and ρt are country-specific fixed effects and the time dummies on the empirical model. To ensure robustness and accuracy in empirical estimation, we used various underlying variables for the growth elements. Poverty headcount and Gini coefficient are based on World Bank's definition (US$1.90/day). We then examine the econometric estimation to measure the impact of poverty (Dang Thi Hoa et al. 2019 ).

The development of the hypothesis based on the econometric model is constructed. Due to a small range in the data set, an estimate of three models with different independent variables is available in the table mentioned above. According to the pre-requisition of the OLS, the data is normally distributed or stationary in the case of normally distributed time-series data (Pesaran et al. 2013 ).

Equations  3 and 4 explains how Y t depends on its lagged value Y t-1 .

Subtract Y t-1 from both sides of the Eq.  3 ,

To overcome the first difference and system of econometric estimation techniques by taking the first difference of model (1) to eliminate country fixed effects by taking an accurate lagged Y and X values as econometric estimation instruments. The transformation of the first difference characterizes the problematic features recommended by (Pham et al. 2019 ). According to the hypothesis, the series consists of a unit root problem and is non-stationary if we reject the null hypothesis. The econometric estimation equation for model 1 is as follows (Wang 2020 ):

The series is stationary regardless of the null hypothesis being rejected. While applying the econometric estimation technique for more productive results, the model parameters have been assessed for inequality and economic growth (Vieira et al, 2021 ). To measure the impact of inequality and poverty on economic development, empirical estimation regression model education × employment, and poverty × Gini has been added. Same as the original estimation model, the poverty headcount and Gini coefficient have been considered based on World Bank's definition (US$1.90/day). We then examine the econometric estimation to measure the impact of poverty and its association with inequality on economic growth (Nkoro and Uko 2016 ).

We collected data from the World Bank Indicator (WBI), and the statistical handbook of Vietnam has been collected for the period between 1990–2016. Further, the following data sources have been used to collect the data for empirical estimation, Vietnam finance ministry, Vietnam state bank, and statistical year-book of Vietnam.

Results and Discussions

Econometric analysis.

This section introduces the econometric estimation about the measurement of inequality, poverty and economic growth. Results show the potential consequences for nominal GDP data (national income accounts) and economic development. Vietnam's GDP at fixed cost has recorded a growth of 1.259%. This GDP growth can be accompanied by an increase in public spending, an advanced level of economic activity, an increase in household income, and, thus, an increase in savings. Investment in three studies of reducing tariffs by 50%, 75%, and 100%, respectively, is appreciated by 2.35%, 1.171%, and 4.683%. This spending intensification is attributed to an acceleration of institutional sales and a consequent boost in savings (Chaudhuri et al. 2017 ). Government consumption has risen by 0.282%, 0.136% and 0.607% over three separate periods of time, while private consumption has increased by 0.686%, 0.333% and 1.458%, respectively. This growth in demand is attributed to an increase in institutional sales and a reduction in the prices of both manufactured products and imports in the domestic currency, as their value is recognized. The incomes of all sixteen household groups as categorized in this model display a promising trend due to all three simulations, i.e., a 50%, 75%, and 100% decrease in the tariff rate. However, from household to household, the rate of rising varies. The growth rate of income growth for rural farmworkers is higher than that of household income growth for all other groups. It is recorded as 1.202% in model 1 (50%), 0.581% in model 2 (75%), and 2.582% in model 3 (100%) for poor household forms, while 1.142%, 0.553%, and 2.448%, respectively, are recorded for extreme poor household type performance. It is reported as 1.202% in model 1 (50%), 0.581% in model 2 (75%), and 2.582%in model 3 (100%) for poor household types, while for extreme poor household style results, 1.142%, 0.553%, and 2.448%, respectively, are recorded.

One percent rise in the Gini coefficient results in a 0.183%-point decrease in the five-year average growth rate centered on the regression of no restrictions. Table ​ Table1 1 shows that this is reduced to -0.05 when we added the log population growth rate. When we added the employment, the coefficient decreases to -0.04 and becomes statistically insignificant. The GDP growth rate of 4% is used to assess a country's development progress over a specific time as a critical macroeconomic indicator. In the past ten years amid the global financial and sovereign debt crisis, the Vietnam economy's growth has been stable with an average of 2% to 3% growth rate of 6.29%. In today's economic challenges, this is a significant accomplishment. At the sense levels of 95%, model 1 is statistically significant (sig. F-test = 0.038). However, the Adjusted R 2 is poor (2.8%), which shows inefficient GDP growth changes. Our findings show that public spending with sig-test < 1% and correlation coefficient 0.258 > 0 positively affects economic development. This means that the higher the government spending level, the higher the growth rate. The key factor of economic growth is an investment.

Impact of inequality on economic growth

In a variety of theoretical and empirical studies, economic growth and investment relationship were studied. Public investment in developed countries accounts for a small proportion of all economic investments by private sector funding and investment in risky fields. On the other hand, the economy plays an important role in all economic activities in developing countries. Even though the nature of our study is macro-level, we hypothesized that inequality is negatively associated with economic growth by using numerous channels. Existing studies in this line of research argued that inequality might conclude that under-investment in schooling, physical capital and health yielded lower economic growth.

This under-investment might be associated with a shortage of resources such as poverty instead of inequality. This argued that observing poverty as an additional channel can slow economic growth. Furthermore, since Vietnam's population is a small fraction of China's, the Southeast Asian nation's accomplishments have accounted for just about 3.2% of the decrease in global poverty since 1990.  A more comprehensive image of poverty alleviation is given by comparing progress around these three international poverty lines (Fu et al. 2021 ). The following animation illustrates how, from 1990 to 2018, poverty rates in China have been improved. This implies that the per capita country with the highest GDP may or may not be the highest. As technology progresses, the per capita GDP of these countries will also increase significantly (Westmore 2018 ). Technology can be a ground-breaking force that can help to reduce the level of poverty in countries.

This results in a substantial proportion of all public spending. The outcome of the regression is therefore essential to the economy in Vietnam. There is little effect on Vietnam's economic growth (sig. t-test > 0.05) due to other dependent variables of job rate, poverty rate, government expending, and export and importation value. These findings do not reveal the negative correlation between economic growth and unemployment. The significance level of model 2 (sig. F test = 0.000) is statistically relevant at 99%. Adjusted R 2 is 39.6%, which means that the impact on the change in the unemployment rate is reasonably successful. 03 independent poor rate variables; the importance of exports and importations, and the significance level of public investment is essential at 99% (t-test < 1%). There is a negative relationship between the poverty rate and the unemployment rate for export and import values. The higher the rate of poverty, the lower the rate of unemployment. Many reports show that the unemployment rate is positive about poverty. Moreover, the negative relationship between export and import’s value and unemployment means that exports' production reduces unemployment by creating many jobs. Our findings show that government spending has a significant and optimistic impact on provincial unemployment in Vietnam (a significance level of 99%).

Meanwhile, numerous previous study reports on the negative relationship between economic development and unemployment. The level of poverty is linked with economic growth and development, including the existence of education and employment. It means that macroeconomic indicators heavily influence the country's poverty level, (Table ​ (Table2). 2 ). The non-poverty incidence also shows an association with underlying variables such as poverty headcount, education, employment and investment. At the same time, the degree of inequality is associated with economic growth and development, employment, and investment to GDP ratio. In the meantime, schooling poverty headcount, education, employment and investment are related to economic growth and development.

Effect of poverty on GDP growth (Dependent variable, 5 Years GDP growth)

 ∗  ∗  ∗ , ∗  ∗ , ∗ indicates significance at 0.1, 0.5 and 0.10 percent, respectively

Results in Table ​ Table3 3 find that high economic growth has helped to reduce the unemployment in their Vietnam study. The significance level of model 2 (sig. F test = 0.000) is statistically relevant at 99%. Adjusted R 2 is 54.3%, which indicates that the shift in poverty rate is reasonably successful. The rate of unemployment, the volume of exports and imports, and 03 independent variable public expenditures with a production of 99% (T-test < 1%). Their relationship with poverty is negative. The greater the rate of poverty, the higher the rate of unemployment. The findings from Model 2 and several previous research findings are supported. This leads to economic development and poverty reduction through growth in exports and public investments. In 2016, the unemployment rate in Vietnam was significantly influenced by the provincial level (sig. t-test > 0, 05). Therefore, the findings do not show the correlation between economic growth and poverty rate (with the explanatory variable of economic growth).

Impact on inequality on growth (restricting the sample)

The econometric model has no control variable with a very small p-value implying the rejection of the null hypothesis . The findings of the proposed methodological framework show that the poverty assessment (US$1.90/day) yielded the poverty interaction and inequality relationship between GDP and poverty is around 84%. In contrast, the coefficient at lagged GDP cannot be taken as a pure "conjunction" parameter. Meanwhile, there is a 43% relationship between injustice and poverty, including poverty-related indicators.

We have done the Arellano and Bond (1991) test to check the serial correlation at first-differenced errors and it shows no significance for serial correlation at second and third level first-differenced errors. It is necessary to mention that the instrument numbers generally reduce when we add multiplication of education × employment to check the coming effects at poverty. It is due to the unavailability of data for a specific period. Results scrutinizes whether the original relationship between economic growth and inequality is continuously observed in the new sample. We observe control variable in the new sample in Table ​ Table4. 4 . The new and changing sample sizes did not show any impact on this fundamental relationship.

Regression Analysis (Dependent: growth)

Robustness Analysis

In this section, we evaluated robustness analysis. We assessed whether inaccurately measured Gini coefficients impact the study's major findings to ensure the robustness analysis. We then undertake further robustness analysis. These outcomes considerably rise in our econometric estimation sample size and we reassess whether the results change due to counting these provinces. Table 5 explains the robustness analysis.

Impact on inequality on 10 years growth (Through restricting the sample)

Lastly, we combine these two robustness analyses and include comparatively rich provinces by describing the definition of no poverty poverty. However, we measure some minor variations due to these changes, while our applicable conclusions are robust. Unfortunately, inequality data are poorly measured and therefore. The outcomes are nearly identical to the study of (Omar and Inaba 2020 ; Islam et al. 2017 ). We consequently recommended that there is no impact of roughly evaluated inequality on our results.

In the ASEAN area, the poverty rate is on the decline, and according to the World Bank, Vietnam has been the most effective in decreasing poverty. Thailand has driven the $1.25 and $2 (PPP) measures, comparing poverty lines through countries. The official poverty lines, in 2005 PPP dollars/person/day, are as follows: Malaysia $3.02; Cambodia $1.88; Philippines $1.84; Malaysia $3.02; Cambodia $1.88; Thailand ($1.75), Lao PDR ($1.48), Indonesia ($1.43), and Vietnam ($1.43). Consequently, the $1.25 standard developed in Africa is too poor to be implemented in the ASEAN region (Quy 2016 ). The World Bank's poverty definition is $1/$1.08/$1.25 a day (PPP). In the near past years, the single dependence is on monetary welfare interventions (Li et al. 2019 ). According to the most recent World Bank revisions, the most significant observations are that global poverty has decreased 745 million Asians benefited from the increase of 54.7% in 1990 to 20.7% in 2014. As a result, Asia's early achievement of the MDG first milestone (having severe global poverty) would not have been feasible without it. According to the recent World Bank revisions, chronic poverty in Southeast Asia has decreased by 31% (Ouechtati 2020 ). If current patterns persist, Asia, including Southeast Asia, would have eradicated severe poverty (a poverty rate of less than 3%) by the year 2025. Li et al. ( 2020 ) calculate an Asia-specific extreme poverty line based on the World Bank's extreme poverty line. Using a technique close to that of the World Bank, the authors calculate a severe poverty line for Asia of $1.51 per individual per day (PPP). Using this recent Asia-specific severe poverty line, the analysts estimate that extreme poverty will rise 9.8 percentage points in 2010 (from 20.7% to 30.5%), resulting in a 343.2 million increase in the number of deprived (Shuai et al. 2021 ).

In contrast, Bangladesh’s imported oil dependence reduced from 26 to 21% over the last ten years. 70% of the urban Indian population consumes LPG for cooking, while only 19% of the population in these areas uses firewood, chips, and dung cake to generate energy to cook food. However, 30% of the country’s population is deprived of modern cooking methods due to the country’s energy poverty. One-third of the world's population uses accommodations provided by the South Asia area, despite making up only 3.4% of the planet's total land. Governance is a significant element in energy poverty. Inadequate governance, especially concerning distribution and transmission of energy systems, leaves residents unable to get and afford an adequate supply of energy. South Asia's theft and (T&D) losses surpass the global average, standing at 34% compared to the 8% reported for the globe. T&D Losses from transmission and maintenance due to an energy-poor society.

The proportion of total fossil fuel energy consumption in India was 68.69%, making it the world's most energy-consuming country ( Nguyen et al. 2018 ).

In 2015, Sri Lanka and Pakistan used 0.31 and 0.34 (per million persons) of energy. In 2015, 44% and 36% of the dependency rate were recorded for India and Pakistan (Qasim et al. 2020 ) and, (Ma et al. 2019 ).

A percentage of GDP was taken to calculate the expenditures for research and development (R&D). Nepal remained stagnant in terms of energy intensity despite the small decline in 2012. India and Pakistan had an energy intensity of 5.37 and 4.19, respectively, showing a decrease from 2001 to 2015.

Conclusion and Policy Recommendation

The study used the econometric estimation to measure the impact of inequality and poverty on economic growth from 1990 to 2016 in Vietnam. Various econometric estimation tests confirmed the presence of a long-run association between the impact of inequality and poverty on economic growth in the matter of poverty headcounter ratio in Vietnam. Empirically, the current study addressed two simple questions: The current study answers the question of “is their negative correlation exists between economic growth and income inequality while poverty has been taken as the US$1.90 income per day?”. Our study shows the following findings,

• (i) The empirical estimation based on the negative impact of inequality and poverty on economic growth is based on poverty headcount ratio, the incidence of poverty, education, employment, investment to GDP ratio and Gini coefficient. The result shows the negative impact of poverty and combining impact on inclusive economic growth. Interestingly, our results verify the previous findings that inequality and poverty negatively impact economic growth. The negative effect of poverty and inequality on economic growth appears to be concentrated at the level of high poverty.
• (ii) Our findings verify the general arguments that the negative impact of inequality on economic growth raises the level of poverty. These findings recommend that poverty reduction policies encourage economic growth even if they do not decrease income inequality. This paper provides new insights into the important economic indicators and the relationship between these indicators, such as poverty, inequality, and economic growth. The major findings show that the structure of inequality is harmful and destructive to economic growth. Results reveal that inequality interrelates greater poverty levels.
• (iii) Our results do not implicate that inequality and poverty have a positive impact on economic growth. Therefore, countries need to decrease inequality. Also, poverty and inequality's effect on the construction of social cohesiveness and institutions is low. The policy suggestion of this study implies that decreasing inequality solitary may not progress economic growth scenarios. As an alternative, poor economies might find ways to reduce poverty, providing more benefit to economic growth instead of re-arrangement that does not decrease poverty.

Following policies are recommended to improve the non-banking financial institutes to attain a higher level of economic growth in Vietnam. To achieve the sustainable inflation rate target, the government state bank of Vietnam should maintain an inflation rate of up to 5–6%. (c) The political stability in Vietnam is one of the important factors through which we can achieve economic development by reducing the volatility in inflation and interest rate, and finally unpredictability in the economic growth to invest in Vietnam. So, stability in the economic policies and the interest rate directly increases foreign capital flow from foreign countries to host countries, stimulating the non-banking financial institutes in Vietnam. In the end, a wide range of research is felt necessary to make the LR policies for the establishment of modern financial institutions in the non-banking sector, which will serve as a sound base for economic growth in Vietnam.

The overall development of all economic entities in society dictates the development of a country. Economic growth, the prosperity of a country, and its participation in raising funds for excess and deficit sectors are driven primarily by the country's financial system (Jalali-Naini and Naderian 2020 ) and (Afonso et al. 2016 ). In most countries, particularly developing countries, institutions have a crucial role in raising funds. Nevertheless, to ensure a stable and concrete financial system, it is crucial to develop banking and non-banking financial institutions, which, in turn, support the economic growth and prosperity of a country's entire national system (Mersland and Øystein Strøm 2009 ). Non-banking financial institutions allow financial systems to withstand the economic crisis while reinforcing economic power. The gap in financial intermediaries is filled with the help of a wide range of products and services provided by the NBFIs, while it also plays a significant supporting role in commercial banks (Jalali-Naini and Naderian 2020 ).

Author contribution

YU ZHU contributed to conceptualization, data curation, methodology, writing—original draft, data curation, and visualization.  Dr. Shahid Bashir contributed to visualization, supervision, and editing. Mohamed Marie contributed to writing—review & editing and software.

This research is partly funded by University of Economics Ho Chi Minh City, Vietnam.

Data availability

Declarations.

The manuscript has not been submitted to more than one journal for simultaneous consideration. No data, text, or theories by others are presented in our manuscript. We don’t have any conflict of interest.

We do not have any person's data in any form.

We do not have any individual person’s data in any form.

We declare that there is no conflict of interest.

Publisher's note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Contributor Information

Yu Zhu, Email: nc.ude.cur@uyuhzoaix .

Shahid Bashir, Email: [email protected] .

Mohamed Marie, Email: ge.ude.uc.cof@ieram_demahom .

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The path to sustainable and inclusive growth

In this episode of the Inside the Strategy Room podcast, three coauthors of a recent McKinsey Quarterly article articulate the scope and potential solutions for one of the biggest challenges of our times: fostering economic growth for the good of all. Tracy Francis, a member of McKinsey’s global leadership team, leads the firm’s consumer-packaged-goods and retail work across Latin America. Anu Madgavkar is a member of the McKinsey Global Institute (MGI) and leads work on labor markets and human capital , technology’s economic impact, and inclusive growth. Sven Smit is cochair of MGI and coauthor of the bestselling book Strategy Beyond the Hockey Stick . 1 Chris Bradley, Martin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities and Big Moves to Beat the Odds , Hoboken, NJ: John Wiley & Sons, 2018. This is an edited transcript of the discussion. For more con­versa­tions on the strategy issues that matter, follow the series on your preferred podcast platform .

Sean Brown: What was the impetus for this article?

Sven Smit: We wanted to introduce what is likely to be a challenge ten times greater than the pandemic, which is creating a path to sustainable and inclusive growth. Three dimensions together will drive our future prosperity, but we lead with growth because sustainability and inclusion will not be possible without growth. The aspiration around economic growth needs to be not only about increasing wealth but broader well-being. That growth can spur inclusion by creating equal opportunity and broad-based progress, lowering inequality, and raising the dignity of work. While growth, inclusion, and sustainability are often framed as trade-offs, we think about them as “and,” not “or.” We need all three for this equation to work.

Sean Brown: Why is growth so important to promoting the other two elements?

Sven Smit: First, growth leads to work. Growth increases our incomes and our standards of living. It increases security and resilience, poverty alleviation, and education, so there are many positive associations. But growth touches on inequality because skills bias leads to a dispersion of income, so growth also promotes the wealth of the people at the bottom of society. Growth has a footprint effect on sustainability, but it also makes it possible to finance decarbonization investments—in fact, the impact of economic growth on environmental footprint is smaller than the leverage it provides to finance a reduction in that footprint.

Growth increases incomes, security and resilience, poverty alleviation, and education, so there are many positive associations. But growth touches on inequality because skills bias leads to a dispersion of income. Sven Smit

Sustainability investments lead to new jobs and business models, but at the same time an energy transition typically hits the poorest first, negatively affecting inclusion. So the picture is complex.

Sean Brown: How has economic growth affected inclusion and sustainability in the past and what impact do you see it having in the future?

Anu Madgavkar: We sometimes get lost in the ups and downs of cycles, but the world’s per capita GDP is 40 percent higher now than it was 20 years ago. Over the next two to three decades, GDP could more than double, so we are far from reaching the limits of growth.

This progress has delivered powerful benefits, particularly to poor populations, lifting more than a billion people out of poverty [Exhibit 1]. Economic sufficiency is a primary measure of inclusion, so growth has been a positive force for inclusion. While the poverty challenge remains immense, the number of people who need to be lifted out of extreme poverty today is lower than the number that had been lifted out in the past couple of decades, largely as a result of growth.

Growth is also important to sustainability. To make the step-up investments needed to achieve net-zero emissions by 2050, we estimate that a $3.5 trillion of incremental annual investment will be required—60 percent higher than what we spend currently. That’s a very large number that policy makers and business leaders struggle to wrap their heads around. For example, it’s more than the average annual increase in public debt. But growth can help us finance and sustain that level of investment. Compare the incremental investment required relative to the corporate profit pool: today, that invest­ment is about 50 percent of global corporate profits, but in a high-growth scenario that boosts corporate profits, the figure drops to about 20 percent, making those step-up investments more feasible.

The number of people who need to be lifted out of extreme poverty today is lower than the number that had been lifted out in the past couple of decades, largely as a result of growth. Anu Madgavkar

Having said that, growth is not automatic. The economy did not always come out from past recessions with strong and sustained growth. But we are seeing businesses doubling down on the growth agenda, so the conditions could arise to enable us to enter an age of renewed economic progress.

Sean Brown: How does this global picture translate to national economies?

Anu Madgavkar: The global picture ultimately comprises individual economies, and this is where the connection between growth, inclusion, and sustainability comes through. Case in point: in emerging economies where 50 to 60 percent of the population still lacks electricity at home, the arrival of electrification and rising incomes will produce a surge in energy consumption. For such countries, it is almost impossible to sacrifice the aspiration of raising incomes in order to forestall that steep increase in resource consumption. Every country will have to set its own threshold for what its population can accept and afford in making climate-related transitions.

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Tracy Francis: To help bring this to life, my colleagues and I recently talked about the sustainability challenge in India. It was news to some that Indians burn lignite [the lowest quality of coal usually used in electricity generation] in their kitchens, and therefore moving to anthracite, or black coal, would be a benefit to those populations. What sustainability means in Australia or North America is quite different from what it means in developing economies. I live in Brazil, a country that has had periods of very high growth, but that growth increased inequality in an already extremely unequal society. We have also had periods of lower growth when inequality significantly improved.

What sustainability means in Australia or North America is quite different from what it means in developing economies. I live in Brazil, a country that has had periods of very high growth that increased inequality in an already extremely unequal society. Tracy Francis

Anu Madgavkar: Companies also face these questions because their specific footprint on the world will guide their priorities in sustainability, inclusion, and growth [SIG]. For a large retailer, the biggest priority may be the reskilling agenda because if they equip a large workforce for the challenges of the future, they will contribute a lot to the “I” dimension. Companies with large resource and material footprints, on the other hand, may need to double down on the “S” dimension.

Sean Brown: What role does the productivity rate play in whether we get the growth necessary to boost both inclusion and sustainability?

Anu Madgavkar: Productivity growth is the biggest driver of economic growth. It is the only sustainable, long-term way to grow an economy, tap into demand, and do so in a competitive way. But the long-term trend on productivity growth in many economies has been flat to declining. What’s more, aging demo­graphics suggest that workforce expansion will not be a big lever for economic growth in the next 20 to 30 years. MGI research shows that bottom up, sector by sector, there is potential to increase productivity growth by between 1.5 and 2 percent annually, but a fundamental by-product of productivity growth are shifts in the nature of work.

Technology is a big driver of productivity, but technological changes imply changes in skills workers need. Sean Brown: Income and wealth inequality has been rising globally. How can we prevent future growth from further exacerbating this disparity?

Anu Madgavkar: Growth lifts entire economies, so the primary effect of growth is positive for inclusion. However, the benefits of that growth are not distributed equally. We have, for example, skills-oriented inequality. The supply of needed skills is not keeping pace with the demand. In the different skill and pay strata, we find much faster growth in demand for high-skill workers, which plays out in faster wage growth, while demand for the middle-skill and middle-pay segment has declined, so wages have flatlined. On one level, this is a huge opportunity: if we can move workers up the skills pyramid, there are better-paying jobs waiting for them. But if that supply does not grow fast enough, we will see rising inequality.

Sean Brown: Are there structural limits to how many people can be retrained before you see diminishing marginal returns in productivity growth, because there won’t be enough jobs for this expanded skilled workforce?

Anu Madgavkar: Two hundred years ago, we would have asked the same question and given the same fallacious answer that there are limits to how much we can upskill people. When people thought of the transition out of agriculture, they never imagined that today 40 percent of the population in rich countries would have a college degree and be doing very different jobs. There are not many limits, in my view, because it’s hard to predict what jobs the future will bring. We need to focus on building adaptability, empathy, and interpersonal relationships—these are the skill sets that will equip the world for the future.

Sven Smit: We should also bring automation into the equation. Automation could bring higher productivity without necessarily requiring much upskilling. What if every stonemason had a brick-laying machine that handled the difficult pieces? Their jobs would be different but not more difficult. Take driving assisted by digital maps—that makes the job easier and can increase the productivity. It’s the mix of automation and human skills that will bring us to the next level of productivity.

Sean Brown: Do you think education systems need to change beyond offering specific skills training?

Anu Madgavkar: We need to radically rethink education. It’s not just about accelerating skills training; it’s about building the cognitive and interpersonal skills that people will need. We have to think generationally, and it’s not clear that education systems around the world are building that adaptability and creativity that people will need to remain relevant in the workforce. It is not just a challenge for the educational system—every company also needs to create experiences that help workers learn, not only through explicit training but methods and practices through which people unconsciously learn. From a CEO’s perspective, probably the biggest near-time oppor­tunity is to strengthen that organizational capital—the processes, the practices—because the learning you enable in your workforce will sustain productivity and income growth.

Sean Brown: Has growth generally translated into higher standards of living?

Anu Madgavkar: Growth leads to rising consumption, but the supply side needs to align with the demand. In segments such as clothing, furnishing, or communications, consumers have benefited from price declines thanks to globalization and new technologies, which has been enormously beneficial from an inclusion perspective. Education, housing, and healthcare, on the other hand, have not benefited as much from technology and globalization, and many markets see inflation eating up to 70 percent of the average household’s income gains [Exhibit 2]. In those areas, growth has not promoted inclusion, but fixing this problem is a huge opportunity for businesses. Innovations in construction techniques, for example, could help ease housing supply and address some of the price inflation.

Sean Brown: What impact do you see population growth having on sustainability?

Anu Madgavkar: As an economy grows in GDP per capita, its impact on the planet also grows steeply because consumption increases on many fronts: energy, water, food—or the complexity of the nutrition basket—housing. Some of the fastest-growing countries also have rapidly growing populations, so their overall demand for resources will grow. This reality has repercussions for the planet as a whole. Many inclusion strategies are country specific, but we need a global approach because the rising population and per capita income in lower-income countries will significantly affect the planet.

Additionally, the energy transition will be more disruptive for some groups. For example, the transition could erode three-quarters of what oil-producing countries earn from fossil fuel production. Low-income households, in both rich and poor countries, may be unable or unwilling to pay for the higher energy costs resulting from the shift away from fossil fuels. And, as we discussed, a big concentration of the need for those investments is in developing countries that are impaired financially. Navigating through this in a way that is least disruptive to the growth and inclusion agenda will be a critical part of the puzzle. And sustainability can bolster growth, too. If we get the financing right and minimize the pain for all population segments, we could see strong growth as we create more green jobs and productivity rises. We could also see significant mitigation of risks related to acute climate events that harm productive assets and GDP.

Sean Brown: You paint a complex picture with many interconnected parts and high costs. How do we pay for it all?

Tracy Francis: We don’t pretend to have all the answers, but it is a worthy and necessary challenge for us as an institution and for leaders in business and society. Developing countries need $500 billion of financing for climate change adaptation by midcentury. I live in a developing country, and after a couple of years of a pandemic the government doesn’t have much money to invest. Should we think about transfers between countries and financing across generations? Are those currently in the workforce prepared to pay for what needs to happen over the next 20, 30, 40 years?

The second question is around inequality. In the global knowledge economy, what happens when workers in developed economies can easily access skills training and other economies cannot? Oil-producing countries are looking at a 75 percent decrease in per capita income, and those countries have some of the largest youth populations in the world. We can all imagine that this transition has to be smooth, with help from other countries, or it will have a difficult situation.

Finally, we face growth headwinds. How do we jump-start productivity in the context of an energy transition? How do we navigate labor supply constraints? We currently have an upside-down labor market, where people are available but not returning to the workforce. We have to think through what needs to change around each of these elements for sustainable, inclusive growth to become a reality.

Sean Brown: In your article, you make six recommendations that point to the paths ahead. What are some of the main steps?

Tracy Francis: We set up six challenges and six metrics as a way of getting a pulse on whether we are moving toward the goal. One is reducing the $3.5 trillion transition costs of decarbonization through technology and innovation. If we target shaving 20 percent off that number through innovations, that would make a substantial difference. On reskilling, we estimate that by 2030 we need 100 million workers retrained, so let’s start tracking that. Basic things such as housing, healthcare, education, digital access, and energy need to be affordable and available for all and we need to track that as well.

Sean Brown: What is the role of individual business leaders in addressing these challenges?

Tracy Francis: Business leaders should think about three areas. Is your aspiration right and are you moving fast enough on addressing sustainability, inclusion, and growth? Secondly, have you worked out what your organization should prioritize versus what will require a broader consensus? Finally, how can the conflict between this long-term narrative and short-term business realities be addressed?

Sean Brown: What role should governments play in ensuring that corporate management teams make these goals organizational priorities?

Anu Madgavkar: The channels through which inclusion and sustainability surface on the agenda alongside productivity growth come down to national economic frameworks. In many emerging economies, a central requirement is the concept of contested leadership, whereby incumbents are not occupying large amounts of the economy and resources in a highly protected manner but are subject to the forces of competition enabled by broad access to capital. Such conditions promote upward mobility in the size and productivity of firms and a healthy churn where incumbents that are no longer productive are eased out and new, more efficient businesses take their place. We looked at about 100 emerging economies and found that the one common thread connecting the high-growth economies that delivered well on inclusion and sustainability was a higher level of contested leader­ship. Vibrant capital markets are the life blood of such economies, but they also need laws, respect for contracts, and deregulation of markets.

Sean Brown: What incentives should corporate leaders have to pursue sustainable, inclusive growth?

Tracy Francis: This is squarely on the CEO agenda. Earlier this year, we sent a letter to CEOs that talked about this concept, and I was very happy with the response. Everyone we have spoken to said, “Yes, this is the challenge of our times.” It sounds daunting. We talk about how important it is to be optimistic, and we are optimistic as an institution because we see that data on how the world faced substantial challenges in the past. We think it is important to be positive, with an educated, open-eyed optimism. We are not looking for perfection, we are not looking for bolts of lightning to come from the sky, but we are looking for optimistic persistence and resilience at taking on this challenge.

People talk about stakeholder capitalism, but I don’t think the incentive structure has caught up with that ideal. Having said that, CEOs are acutely aware that if they do not meet expectations on these topics, the court of public opinion is growing stronger.

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Sustainable Development Essay

500+ words essay on sustainable development.

Sustainable development is a central concept. It is a way of understanding the world and a method for solving global problems. The world population continues to rise rapidly. This increasing population needs basic essential things for their survival such as food, safe water, health care and shelter. This is where the concept of sustainable development comes into play. Sustainable development means meeting the needs of people without compromising the ability of future generations. In this essay on sustainable development, students will understand what sustainable development means and how we can practise sustainable development. Students can also access the list of CBSE essay topics to practise more essays.

What Does Sustainable Development Means?

The term “Sustainable Development” is defined as the development that meets the needs of the present generation without excessive use or abuse of natural resources so that they can be preserved for the next generation. There are three aims of sustainable development; first, the “Economic” which will help to attain balanced growth, second, the “Environment”, to preserve the ecosystem, and third, “Society” which will guarantee equal access to resources to all human beings. The key principle of sustainable development is the integration of environmental, social, and economic concerns into all aspects of decision-making.

Need for Sustainable Development?

There are several challenges that need attention in the arena of economic development and environmental depletion. Hence the idea of sustainable development is essential to address these issues. The need for sustainable development arises to curb or prevent environmental degradation. It will check the overexploitation and wastage of natural resources. It will help in finding alternative sources to regenerate renewable energy resources. It ensures a safer human life and a safer future for the next generation.

The COVID-19 pandemic has underscored the need to keep sustainable development at the very core of any development strategy. The pandemic has challenged the health infrastructure, adversely impacted livelihoods and exacerbated the inequality in the food and nutritional availability in the country. The immediate impact of the COVID-19 pandemic enabled the country to focus on sustainable development. In these difficult times, several reform measures have been taken by the Government. The State Governments also responded with several measures to support those affected by the pandemic through various initiatives and reliefs to fight against this pandemic.

How to Practise Sustainable Development?

The concept of sustainable development was born to address the growing and changing environmental challenges that our planet is facing. In order to do this, awareness must be spread among the people with the help of many campaigns and social activities. People can adopt a sustainable lifestyle by taking care of a few things such as switching off the lights when not in use; thus, they save electricity. People must use public transport as it will reduce greenhouse gas emissions and air pollution. They should save water and not waste food. They build a habit of using eco-friendly products. They should minimise waste generation by adapting to the principle of the 4 R’s which stands for refuse, reduce, reuse and recycle.

The concept of sustainable development must be included in the education system so that students get aware of it and start practising a sustainable lifestyle. With the help of empowered youth and local communities, many educational institutions should be opened to educate people about sustainable development. Thus, adapting to a sustainable lifestyle will help to save our Earth for future generations. Moreover, the Government of India has taken a number of initiatives on both mitigation and adaptation strategies with an emphasis on clean and efficient energy systems; resilient urban infrastructure; water conservation & preservation; safe, smart & sustainable green transportation networks; planned afforestation etc. The Government has also supported various sectors such as agriculture, forestry, coastal and low-lying systems and disaster management.

Students must have found this essay on sustainable development useful for practising their essay writing skills. They can get the study material and the latest updates on CBSE/ICSE/State Board/Competitive Exams, at BYJU’S.

Frequently Asked Questions on Sustainable development Essay

Why is sustainable development a hot topic for discussion.

Environment change and constant usage of renewable energy have become a concern for all of us around the globe. Sustainable development must be inculcated in young adults so that they make the Earth a better place.

What will happen if we do not practise sustainable development?

Landfills with waste products will increase and thereby there will be no space and land for humans and other species/organisms to thrive on.

What are the advantages of sustainable development?

Sustainable development helps secure a proper lifestyle for future generations. It reduces various kinds of pollution on Earth and ensures economic growth and development.

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A Literature Review of Pandemics and Development: the Long-Term Perspective

• Original Paper
• Published: 27 January 2022
• Volume 6 , pages 183–212, ( 2022 )

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• Beniamino Callegari   ORCID: orcid.org/0000-0001-5513-7299 1 , 2 &
• Christophe Feder   ORCID: orcid.org/0000-0002-1239-513X 3 , 4  

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Pandemics have been a long-standing object of study by economists, albeit with declining interest, that is until COVID-19 arrived. We review current knowledge on the pandemics’ effects on long-term economic development, spanning economic and historical debates. We show that all economic inputs are potentially affected. Pandemics reduce the workforce and human capital, have mixed effects on investment and savings, but potentially positive consequences for innovation and knowledge development, depending on accompanying institutional change. In the absence of an innovative response supporting income redistribution, pandemics tend to increase income inequalities, worsening poverty traps and highlighting the distributional issues built into insurance-based health insurance systems. We find that the effects of pandemics are asymmetric over time, in space, and among sectors and households. Therefore, we suggest that the research focus on the theoretical plausibility and empirical significance of specific mechanisms should be complemented by meta-analytic efforts aimed at reconstructing the resulting complexity. Finally, we suggest that policymakers prioritize the development of organizational learning and innovative capabilities, focusing on the ability to adapt to emergencies rather than developing rigid protocols or mimicking solutions developed and implemented in different contexts.

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Introduction

As the COVID-19 emergency appears to slowly and unevenly recede in the wake of medical breakthroughs and the development of more effective prevention and treatment protocols, the question of the long-term impact of the pandemic grows more urgent. There is little doubt that this global health crisis found economists mostly unprepared, as the analysis of the pandemic’s effects has hardly found its way into the discipline’s most central publication avenues (Noy and Managi 2020 ). However, this does not mean that the economic analysis of pandemics is starting from scratch, as economists and economic historians have never ceased to expand our knowledge on the subject.

The connection between pandemics and economic theory has historically been so relevant that it has directly contributed to labeling economics as the ‘dismal science’. Cipolla ( 1974 ) illustrates how reflections on the plague and its consequences led many scholars to develop Malthusian ideas on the complex long-term relationships between population growth, economic growth, and diseases, well in advance of the Essay on the Principle of Population (Malthus 1798 ). However, the Industrial Revolution and the concomitant development of medical knowledge led to a decreased incidence of catastrophic plagues in the West, and a corresponding decline in the interest in pandemics on the part of economists (Easterlin 1995 ). The demographic boom of the West and the visible lack of corresponding pestilence and famine further discredited Malthusian perspectives, leading to a disconnection between the demographic and economic disciplines. Furthermore, from 1900 to 2019, pandemics were either eclipsed by more disruptive events or had a relatively limited economic impact (Garrett 2008 ; Lee and McKibbin 2004 ; Noy and Managi 2020 ). Finally, the marginalist revolution greatly focused economists’ attention on purely economic elements, eliminating from the discipline those elements perceived as spurious, like the study of pandemics’ effects (Schumpeter 1954 ), relegating it to a debate of mainly historical interest.

The expansion of economic analysis beyond its traditional boundaries that has occurred in the last two decades has gradually re-included the consequences of pandemics within economic theory, although most contributions remain on the periphery of academic debate and are relatively hidden (Arora 2001 ; Dunn 2006 ; Weil 2014 ). As Noy and Managi ( 2020 ) observed, the inherently multidisciplinary nature of pandemics, combined with its poor fit with what are called “hard” methods, have both conspired to make the contribution made by economists to the analysis of pandemics modest. The efforts of economists have been greatly augmented by the continuous work done by economic historians to understand the impact of past pandemics on the long-term development of various socioeconomic systems. Yet, while the total contribution to the economic analysis of the long-term impact of pandemics is significant, it is scattered across different journals, disciplines, academic approaches, and debates, making a review work necessary in order for all these contributions to become accessible.

This paper reviews the long-term economic effects of pandemics, defined as health shocks arising from infectious diseases with global diffusion. Within the definition of long-term effects, we include both those mechanisms that are immediately present and persist for a significant amount of time and those effects that arise in the long term. Due to the focus of our analysis, transient short-term effects are not part of our study. To the best of our knowledge, few literature reviews have studied the connection between pandemics and economic development. Bleakley ( 2010 ) critically reviews how diseases, rather than pandemics specifically, affect human capital formation and income growth at the micro and macro levels. Costa ( 2015 ) describes how health improvements affect economic growth, with a specific focus on the US, concluding that improved health is not sufficient to foster growth. Finally, Boucekkine et al. ( 2008 ) formally analyze how and which growth models are better able to mathematically describe the epidemics’ effects. Moreover, some scholars have also reviewed the long-term economic effects of particular health shocks, like the preindustrial epidemics (Alfani 2021 ), Spanish flu (Beach et al. 2021 ), HIV (Gaffeo 2003 ; Zinyemba et al. 2020 ), and modern pandemics (Bloom et al. 2021 ). We differ from these works because we analyze the long-term impact of pandemics in general on economic development. A similar approach has been adopted by Gries and Naudé ( 2021 ) and Callegari and Feder ( 2021a ), but with an entrepreneurship and not a macroeconomic focus.

Our broad approach has led us to review a large number of studies in order to identify recurrent results across very different pandemic events. Pandemics could affect aggregate demand, aggregate supply, and productivity growth (Basco et al. 2021 ; Dieppe 2021 ; Guerrieri et al. 2020 ; Jinjarak et al. 2021 ; Rassy and Smith 2013 ; World Bank 2020 ). Recalling the Solovian framework, we divide the long-term pandemic economic effects into three categories: labor and human capital; investments and physical capital; and knowledge and innovation. We find that all productive inputs are affected in the long term by the pandemic. More specifically, labor and human capital are negatively affected directly by health shocks. However, the intensity of this effect is heterogeneous among countries, labor markets, and industries. Investments and physical capital are affected by pandemics through complex, interacting, and often contrasting mechanisms, leaving long-term effects ambiguous and usually marginal and non-linear. However, the asymmetric impact of pandemics on the capital market and household income leads to the poverty trap and highlights the weakness of the health insurance system in coping with these shocks. Finally, pandemics could positively affect innovations in public and private institutions and bring about relevant technological changes in industries. The scope and direction of these socioeconomic changes appear to mediate the long-term effects of pandemics, determining both their direction and scope. However, relevant and radical institutional changes are necessary if the impact of pandemics on development is to be positive. We therefore suggest that scholars should develop meta-analysis to understand the complex tapestry of long-term pandemic mechanisms. Many policy implications follow directly: an efficient public intervention must be characterized in the long term by flexibility, pro-market orientation, and design customization.

The paper is structured as follows. Section 2 explains the selection methodology used in the review. Sections 3 , 4 , and 5 describe, respectively, the long-term effects of pandemics on: labor and human capital; investment and physical capital; and knowledge and innovation. Section 6 critically discusses the survey and summarizes the main lessons drawn from the literature for researchers and policymakers. Section 7 concludes.

Methodology

This literature review aims to illustrate, compare, and discuss the mechanisms through which pandemics affect long-term economic development. To achieve this goal, we adopted the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) methodology (Moher et al. 2009 ). First, we defined a list of keywords that express the main aspects of the “pandemic” and “economic development” concepts. Second, we identified which data sets to search: JSTOR, IDEAS/RePEc, Google Scholar, and EconLit. We excluded working papers and unpublished articles from our search, to ensure that the mechanisms presented are accepted by the scientific community. Moreover, we restricted our focus to the fields of economics and economic history, to ensure the economic relevance of the mechanisms described. Finally, we excluded papers focused on the COVID-19 pandemic, as it is too early for a comprehensive evaluation of its long-term effects. Applying these criteria, we obtained a first sample of more than 4800 potential articles. Important contributions were not missed due to excessively strict methodological adherence, we also parsed the references lists of the most influential contributions within our initial corpus, identifying in this way 178 additional relevant manuscripts to potentially include in our review.

From this corpus of potential articles, we operated a further selection by analyzing their abstracts and, in uncertain cases, by searching the main body of the paper concerned for evidence of relevant discourse, thereby identifying 805 potential contributions. We then proceeded to evaluate the selected articles for inclusion according to their relevance to our research topic and their relative originality, evaluated in terms of the mechanisms analyzed. We then proceeded to summarize the resulting papers according to their research questions and aims, their theoretical references, their methodology, and their results, focusing on the featured economic mechanisms, in order to identify the structure of our corpus in terms of the main debates, the empirical object of study, the methods applied, and the theoretical foundations. In this way, after eliminating redundant contributions, we selected 88 articles, each describing specific mechanisms through which pandemics may affect the economic system in the long term. Finally, we identified a criterion to organize the resulting mechanisms, inspired by the well-known Solovian model of long-term growth, dividing them into the following three broad categories: labor, capital, and innovation.

We then identified a corpus of high-quality contributions, each offering a specific contribution to the academic debate in terms of one or more relevant mechanisms, supported by either theoretical or empirical arguments. Figure  1 summarizes the main steps of the selection process by using a PRISMA diagram.

The PRISMA process

Labor and Human Capital

The most intuitive and direct effect of pandemics is the adverse shock to the population and the labor market. Delfino and Simmons ( 2005 ) propose a Lotka-Volterra model showing that a negative demographic effect could become persistent if the pandemic is not eradicated. The magnitude of this effect is, however, mediated by contextual factors. Alfani ( 2013 ) shows that, in southern Europe, the plagues of the XVII century had higher mortality and territorial pervasiveness compared with those affecting northern Europe in the same period and the southern Europe plagues of the previous century. Furthermore, the rate of mortality and territorial pervasiveness was heterogeneous among Italian regions and cities. Using a long-term perspective, Rodríguez-Caballero and Vera-Valdés ( 2020 ) find that pandemics reduced the unemployment rate persistently from 1854 to 2016 in Italy, Spain, the Netherlands, the UK, and the US. They also observe that, in the UK, pandemics reduced the GDP per capita over 1270–2019, and that this effect was increasingly persistent in the last 300 years. Fiaschi and Fioroni ( 2019 ) have built a model which shows how pandemics’ impact on growth trajectories is mediated by the production structure and the mortality reduction brought by technological progress. Bloom and Sachs ( 1998 ) observe that the mortality and morbidity of pandemics are highest in tropical regions. They explain that differences in climate and nature, together with anthropomorphic factors, affect the spread of the virus over the population. However, this direct effect on labor and population could decline in the long term.

The long-term effects of pandemics on the labor supply also depend on their impact on fertility. By analyzing 15 relevant infectious diseases from 75 countries between 1940 and 2000, Acemoglu and Johnson ( 2007 ) find that pandemics reduce demographic equilibria in the long term through their impact on fertility rates. Birth rates are influenced directly, as the pandemic reduces the number of fertile women, and indirectly, as future life expectancy influences decisions to have children in the long term. They empirically confirm that the higher mortality of those affected by infectious diseases sharply reduces births and slightly reduces the share of the young in the population because of their lower life expectancy. Lorentzen et al. ( 2008 ) show that a pandemic affects not only fertility, i.e. the number of births, but also the net fertility, i.e. the fertility of the surviving population. Parents care about the number of surviving newborns: higher infant mortality increases births. Moreover, parents invest time and money in their children, who become irreplaceable when they grow up. Therefore, higher adult mortality increases fertility, even more than infant mortality. Finally, given the family budget constraint, parents must choose between the quantity and quality of their children. Consequently, the uncertainty of the pandemic reduces the investment rent in human capital, leading parents to rationally prefer quantity to quality. The authors find empirical support for these hypotheses, observing that the probability of contracting malaria negatively affects adult and infant life expectancy, and that both expectations improve the fertility rate.

Fertility mechanisms interact with human capital accumulation. Lagerlöf ( 2003 ) describes an overlapping-generations model where adults confront the children’s quality-quantity trade-off. Infant survival is negatively affected by both the chance of random pandemics and population density, which both increase the risk of contagion, but is positively affected by human capital (higher medical knowledge), which is cumulative in time and positively affected by population density (knowledge spillovers). They find that, when pandemics are frequent, where the decision to have children is concerned, parents prefer quantity to quality; human capital does not increase; and population density remains low. When sufficient human capital has accumulated, however, the growth path of the economy is no longer affected by new pandemic waves. Consequently, only if, by chance, pandemics do not strike for a sufficiently long time, will parents then increase their investments in future generations, thus reaching the human capital threshold necessary to achieve robust growth trajectories. Gori et al. ( 2020 ) integrate all previously described mechanisms in a three-stage overlapping-generations growth model, including adolescent, adult, and elderly agents. In this model, only the elderly are sexually inactive and are, therefore, not exposed to HIV infection. The probability of dying from the pandemic is negatively associated with human capital endowment and positively associated with the number of virus-spreaders. The pandemic increases both infant and adult mortality. Adult mortality reduces both labor supply and life expectancy. If life expectancy is reduced below a certain threshold level, parents prefer to have more children; otherwise, they prefer to invest in human capital. Parameterizing the model for the Sub-Saharan African countries, Gori et al. ( 2020 ) find that HIV reduces labor supply and human capital but increases fertility. Cervellati and Sunde ( 2015 ) model an economy where parents confront the children’s quality-quantity trade-off, given the child mortality and the inborn ability of the offspring. Also in this model, higher human capital leads to an improvement in both medical care and adult life expectancy: intensive economic growth follows an initial quasi-stagnation. Cervellati and Sunde ( 2015 ) observe, like Lorentzen et al. ( 2008 ), that adult mortality and human capital affect the economic dynamics more than fertility and child mortality. Cervellati and Sunde ( 2011 ) combine Lorentzen et al. ( 2008 )‘s life expectancy effects on mortality and fertility with the Acemoglu and Johnson ( 2007 )‘s model and find non-monotonic patterns of demographic growth. Before the demographic transition, more newborns could compensate for higher mortality, leaving the overall demographic effect ambiguous; after the demographic transition, parents prefer quality over quantity in regard to children, making pandemic demographic effects definitively negative in the long term.

A pandemic’s negative demographic impact reduces the number of available workers. However, its long-term impact is mixed. Gori et al. ( 2020 ) and Dauda ( 2019 ) provide a comprehensive literature review of the complex link between HIV and growth. They conclude that, while strong evidence exists for a negative link at the micro level, the empirical support for the macro effects is weaker. Keogh-Brown et al. ( 2010 ) find four ways in which the pandemic can affect the work supply. Death and infection of workers result in a temporary reduction of the workforce, partially persistent in the long term. However, they observe that these effects could be mitigated by migration (see also Alfani 2013 ), labor market inefficiencies (see also Bloom and Mahal 1997 ), and inventories. Using a structural econometric model of the UK to estimate the economic effects of a modern pandemic, they conclude that it would reduce production and increase firms’ costs, leading to the emergence of inflation in the long term. Voigtländer and Voth ( 2013 ) describe a model where pandemics reduce population but increase labor in the manufacturing sectors. Since the land supply remains constant, labor productivity increases, and therefore survivors’ wages are higher than they would be without the pandemic in the long term. If the welfare increase is sufficiently high, the demand for manufactured goods increases trade and population density. Moreover, manufactured goods are easily taxable, thus enabling the financing of more wars. All these mechanisms increase the transmission of disease, leading to long-term demographic stagnation. Using data on the Black Death, the calibrated model correctly approximates the growth of both the European urbanization and per capita GDP from 1000 to 1700.

Historical research provides further support for the hypothesis. Herlihy ( 1997 ) confirms that wages and the demand for manufactured goods increased after the Plague; however, he observes higher lethality for adults than for both the young and the elderly. The Black Death first reduced the number of available workers and the length of their productive life. Additionally, the Plague took away both the skill and experience of previous workers and the parent’s investment in the education of their children. Moreover, high turnover increased labor demand, further reducing the productivity of new workers in the long term. Low labor supply increased wages, as land rents decreased. Finally, consumption grew quantitatively, shifting qualitatively towards higher-quality goods, leading to the emergence of a positive long-term impact on the real wages and welfare of the survivors. Pamuk ( 2007 ) supports all Herlihy ( 1997 )‘s results. Moreover, he finds that the great difference in economic growth between North and South Europe, which is observed only some centuries later, originates from the Black Death of the fourteenth century. Indeed, if at first the Plague increased wages across Europe, afterwards, when the population began to grow again, the real wages remained persistently higher in North Europe. The higher flexibility of institutions and guilds allowed a better economic and social response to the Black Death in the North, for example by obtaining lease contracts more advantageous for farmers, or making it easier for women to enter the labor market, and then structurally and radically changing the fertility rate and demographic trends in those countries. Alfani and Percoco ( 2019 ) produce empirical evidence that the plagues that infested Italy in the XVII century also led to long-term reductions in real wages. Indeed, although the population remained below pre-plague levels for more than two centuries, the reduction of skills (as well as of capital and technologies) was particularly large for various reasons. First, these plagues were particularly severe compared with the outbreaks in other European countries. Second, these plagues hit all population strata equally, including the poor, nobles, and bourgeois alike. Moreover, the demographic impact was not compensated by migration flows. Finally, the destruction of human capital reduced the competitiveness of the Italian economy.

Economists disagree on the intensity of the long-term effect of pandemics on the accumulation of human capital. Bleakley ( 2010 ) shows that the effect of the pandemic on schooling is uncertain due to the simultaneous decrease in both benefits (following lessons is more difficult) and opportunity costs (labor productivity is lower). Moreover, he observes that the pandemic could already have negative effects on the intellectual development of the child during gestation. Almond ( 2006 ) supports this argument using 1960–80 decennial microdata to analyze the long-term effects on those US children who were conceived during the Spanish flu. He observes that, if the mother was infected during pregnancy, then her offspring had lower educational attainment and a higher probability of being physically disabled. Both factors reduce their future wages and then increase their participation in illegal activities and, more generally, harm their socioeconomic status 40, 50, and 60 years after the pandemic. Parman ( 2015 ) resizes the effect, affirming that in the US the Spanish flu did not affect human capital in aggregate because parents redirected their investments towards older siblings. Meyers and Thomasson ( 2021 ) show that in 1916 the negative effect of polio on human capital differed between the US states and also depended on the age of students and the family income. However, the effect is usually nonlinear on age and more damaging to the richest because of the specific characteristics of polio.

The relationship between pandemics and human capital accumulation has been studied not only in the US. Odugbesan and Rjoub ( 2019 ) show that, for 26 sub-Saharan African countries from 1990 to 2016, the link between a pandemic and human capital is negative and bidirectional due to persistent short-term effects. Using two Tanzanian databases, Wobst and Arndt ( 2004 ) show that the HIV pandemic has decreased human capital (and then wages and income per capita) in at least four ways. First, the pandemic has directly and persistently reduced labor supply and skills availability. Second, the number of teachers has also decreased, worsening the quality of the process of accumulation of human capital. Third, the lower labor supply has increased the demand for new workers, raising the opportunity cost of education for the young, thus reducing the need for human capital investments. Finally, the pandemic has also reduced the long-term demand for education through an increase in the number of orphans. Novella ( 2018 ) confirms the last link using a Zimbabwean survey for 2007–8. This revealed that orphans leave (secondary) school early and hence enter the labor market early compared with non-orphans. The worst effects emerge when both parents are dead or when the household is blended, i.e., when orphans and non-orphans live together. He also observes that this lower household income after a parent’s death only partially explains the lower investment in the orphans’ human capital. Evans and Miguel ( 2007 ) extend previous results for Kenya. Analyzing an extensive database of over 20,000 children, they observe that not only are orphans more likely to quit primary school, but the probability is higher in those cases where the mother dies and/or their academic performance was already weak. Therefore, they conclude that the inability to pay school fees and the need to find work seem less significant in the long term than the lack of emotional support and the presence of psychological trauma. Fortson ( 2011 ) models the schooling decision that maximizes the expected present value of lifetime utility, considering that HIV reduces its discount rate. He uses data of 15–49-year-olds covering the birth cohorts 1952–91 in 15 sub-Saharan African countries in order to confirm that HIV reduces longevity and human capital investments persistently in the long term. Moreover, the author suggests that both orphans and non-orphans are affected by pandemics, and that decreased schooling provision does not play a key role. Many scholars have analyzed the effects of HIV on educational achievements. Bell and Gersbach ( 2009 ) confirm all previous results by using an overlapping-generations model where both parents and children decide how much to invest in human capital. Moreover, they observe that (i) selective health and educational policies are more effective than comprehensive ones; and (ii) simultaneous health and educational policies are more (less) efficient than sequential ones if disease mortality is above (below) a threshold level.

Young ( 2005 ) combines two fertility effects with the orphan effect. First, if the virus is sexually transmitted, e.g. by HIV infection, then unprotected sexual activities and births are reduced. Second, the labor supply contraction, induced by the pandemic, improves wages and then reduces the mothers’ fertility. Third, lack of parental guidance reduces the human capital of orphans. These emerging long-term effects are mixed. Calibrating the model with South African microdata, he finds that: the female labor supply is more elastic than the male labor supply; fertility effects always prevail in the long term despite pessimistic assumptions; and per capita income tends to increase. Some scholars find that, in addition to human capital, pandemics depress other types of intangible capital. Aassve et al. ( 2021 ) show that the Spanish flu decreased social capital for many generations in the US. They use a long-term social trust survey and discover that: (i) the immigrants born after the Spanish flu and their heirs have lower social trust than those born before; and (ii) the effect is higher for those from countries with less uncensored information on pandemic effects. Using a behavioral experiment in Uganda, McCannon and Rodriguez ( 2019 ) find that grown-up orphans tend to have lower social capital. The probability of prosocial behavior is lower because orphans are more pessimistic about the community’s social contributions. McDonald and Roberts ( 2006 ) analyze data for 112 countries from 1960 to 1998 to determine how much HIV and malaria affect health capital and, consequently, income per capita growth in the long term. They observe that the degree of HIV prevalence in a country negatively affects health capital directly and economic growth indirectly. Moreover, they observe that this mechanism is significant in Africa, through both HIV and malaria, and in Latin America, only through HIV, but not in OECD and Asian Countries. Focusing on sub-Saharan Africa, Odugbesan and Rjoub ( 2019 ) confirm that income plays a key role in explaining the long-term effects of a pandemic. However, the direction of their results is reversed: the bidirectional link between a pandemic and human capital for upper-middle-, low-middle-, and low-income countries is, respectively, negative, positive, and insignificant.

Finally, the majority of effects described in this section are generally more severe in low-income countries. Here, reduced access to medical care, undernourishment, and the presence of other diseases could induce a poverty trap (Beach et al. 2021 ; Bloom et al. 2021 ; Lorentzen et al. 2008 ). A Malthusian equilibrium with low income, underinvestment in schooling and health, and high fertility emerge for tuberculosis (Delfino and Simmons 2005 ) but only partially for malaria (Bloom and Sachs 1998 ; Gallup and Sachs 2001 ). Moreover, the poverty trap is unclear for HIV, where both positive and negative pandemic effects on income distribution could emerge (Bloom and Mahal 1997 ; Bloom and Sachs 1998 ; Mahal 2004 ). Alfani ( 2021 ) suggests that high-mortality pandemics, like the plague, could reduce poverty by either exterminating the poor or redistributing income to the poor. Vice versa, Karlsson et al. ( 2014 ) suggest that low-mortality pandemics, like the Spanish flu, increase poverty due to pandemic-induced unemployment, inability to work for long periods, and general loss of income. As these effects are particularly severe and persistent for poor households, pandemics could aggravate inequality. Therefore, the long-term effects of pandemics on income distribution appear to depend on the medical profile of the disease.

Investments and Physical Capital

While pandemics affect the long-term dynamics of labor supply and human capital also through durable short-term mechanisms, their impact on capital and savings arise in the long term specifically. Acemoglu and Johnson ( 2007 ) argue that, since land and physical capital are not affected in the short term, the lower levels of labor supply and human capital reduce GDP but have an unclear effect on per capita income. Since pandemics reduce GDP and income growth, they also reduce physical capital accumulation, thereby triggering a long-term negative loop between GDP and capital. The authors hypothesize that, in the long term, GDP per capita should drop in high-income countries but not in low-income countries, where land is more relevant than physical and human capital, and the negative loop effect is weaker.

Bai et al. ( 2021 ) confirm that the long-term pandemic effect differs among countries. They show that infectious diseases in the last 15 years have increased permanent volatility in the US, UK, China, and Japan capital markets. However, public policies of correct timing and intensity could reduce the effect. Ru et al. ( 2021 ) find that countries that have already experienced similar pandemics react better and more readily to future pandemics, especially if past pandemics have led to deaths. Analyzing the 65 largest financial markets in the world, the authors note that countries with firsthand SARS experienced the deepest fall in the stock market during the COVID-19 pandemic. This reaction is positively correlated to the pandemic’s mortality. Donadelli et al. ( 2017 ) confirm that, from 2003 to 2014, disease-related news had adversely affected the returns of the pharmaceutical stock market. Analyzing 102 pharmaceutical firms listed on the US stock market, the authors note that investors were too optimistic about the future liquidity of pharmaceutical sector flows after the shock. This irrational behavior has a positive and persistent effect on the returns of the pharmaceutical stock portfolio. Cakici and Zaremba ( 2021 ) extend the previous results outside the pharmaceutical sector. They observe that pandemics induce irrationality among investors, impacting assets across countries and firms heterogeneously. Analyzing 19 international stock markets, they observe that the stock trend signals to investors the firms’ resilience and ability to react to negative shocks, leading to increased future share performance. Summarizing, the literature analyzing the effects of pandemics on equity markets concludes that these health shocks induce irrational behavior of investors, causing positive and negative long-term effects, heterogeneous among countries, sectors, and firms.

Consensus among scholars is lacking in regard to both the size and direction of the long-term pandemic effects on investments and physical capital. Cuddington ( 1993a ) observes that pandemics affect labor demand and capital markets. The total effect on wages is uncertain: supply shock increases wages, but the demand shock reduces them, because infected workers are less effective, as they need to take sick leave and are less productive. Pandemics also affect domestic capital accumulation because health care costs reduce savings. Therefore, the total impact on capital per capita, GDP, and GDP per capita is uncertain; however, calibrating the model with Tanzanian data, he finds that both GDP and GDP per capita sharply decreased from 1985 to 2010. Cuddington and Hancock ( 1994 ) confirm the result for Malawi, although the lower number of infected people reduced the long-term effects on the economy. Moreover, Cuddington (Cuddington 1993b ) observes that previously predicted effects also hold when formal and informal productive sectors coexist, and formal wages are sticky. Basco et al. ( 2021 ) affirm that the Spanish flu in Spain was primarily a demand shock but confirm that the pandemic impact on the real return of capital is ambiguous in the long term. Although at the theoretical level Karlsson et al. ( 2014 ) confirm the ambiguity of the long-term effect of the Spanish flu on the per capita return on capital, this ambiguity is not observed in the empirical analysis of the Swedish counties. Indeed, by analyzing the effects in the decade following the pandemic, the authors estimate no statistically significant effect on earnings per capita, but clear negative effects emerge on capital returns per capita. Finally, Jinjarak et al. ( 2021 ) show that the H3N2 pandemic reduces GDP, consumption, and the investments of 52 countries.

Other scholars demonstrate that the effect of pandemics is heterogeneous among sectors, a trait shared with most disasters (Halkos and Zisiadou 2019 ). In Egypt, pandemics depleted the rural workforce necessary for the maintenance of the crucial centralized irrigation system, which remained in a state of disrepair, hampering the well-being of the region for centuries (Borsch 2005 , 2015 ). Herlihy ( 1997 ) shows that the rise in wages following the Black Death increased demand for more nutritious and elaborate goods, diversifying consumption and improving welfare. Similarly, Pamuk ( 2007 ) shows that the Plague increased the demand for luxury goods in particular. Moreover, he observes a reduction in interest rates and increased investments, although with asymmetric components. Indeed, Alfani ( 2013 ) shows that the XVII century plague depressed Italian industries, in particular, the wool, flax, silk, and construction sectors, due to the loss of skills and the impossibility of procuring raw materials. Alfani and Percoco ( 2019 ) highlight that the shift of investments from urban to rural activities in this period reoriented the post-plague Italian manufacturing sector towards the production of semi-finished and low-quality goods. Summarizing, scholars observe that short-term changes in the relative composition of both demand and supply structures can lead to long-term sectoral effects.

Similar sectoral asymmetric effects have been recorded for more recent pandemics. Analyzing the potential effects of SARS in Asia, Lee and McKibbin ( 2004 ) find that countries specializing in trade and the tertiary sector are more damaged by both temporary and persistent pandemic shocks. Indeed, in these sectors, close contact with other people is often necessary. The retail and tourism sectors are particularly vulnerable. Gallup and Sachs ( 2001 ) provide further support by showing that Mediterranean and Caribbean countries benefited from the rapid and stable development of the tourism industry after the eradication of malaria. Finally, Mahal ( 2004 )‘s literature review on HIV effects shows a similar, although weaker, effect for sub-Saharan tourism. Moreover, the author shows that health, transport, and the primary sectors are also negatively affected by HIV. Pandemics affect the health sector by increasing costs for healthcare services and insurance. Moreover, he shows that workers in the transport and primary sectors belong to the social classes most affected by HIV. Oster ( 2012 ) finds that export is an essential explanation of the spread of HIV in Africa because more truckers and miners, among others, stay away from home for more extended and more numerous periods. As a result, they and their partners are more likely to engage in risky sexual intercourse, putting themselves and their stable partners in danger. She also affirms that trade could further aggravate the effect in the long term, as additional income could increase the amount of money spent on prostitution, or mitigate it, if money is spent on preventive measures. Using a quasi-experimental variation, Adda ( 2016 ) confirms that the new transportation networks and inter-regional trade accelerated disease diffusion in France from 1984 to 2010. Delfino and Simmons ( 2005 ) combine the effect of capital and labor, using a Lotka-Volterra predator-prey model where only healthy individuals are productive. The authors observe that the introduction of capital makes the path more complex, but that the economy still cyclically converges to a stationary equilibrium. Indeed, when labor supply decreases, GDP decreases. Therefore, both savings and investments are lower, and GDP per worker also decreases. Lower welfare reduces health services consumption, but the impact on the disease transmission is uncertain: it increases as the share of infected rises, but it decreases as the contagion period became shorter. When the labor supply increases again, the cycle restarts. Augier and Yaly ( 2013 ) show that complex growth paths could emerge even in a model where the pandemic affects only capital accumulation. The authors describe an overlapping-generations model where the pandemic increases premature deaths, and then only the survivors will use savings previously accumulated. The government proposes a funds system that redistributes rents among the survivors. Young people must decide how much to invest in this public fund, and how much to spend on health or other goods, knowing that better health reduces the chance of dying prematurely. They observe that the pandemic, capital, and health investments are linked in an articulated and recursive way: (i) the pandemic causes health investment to drop; but (ii) health investment reduces the diffusion of the pandemic; (iii) capital directly affects the investment; and then (iv) it indirectly affects the spread of the pandemic. Therefore, the economy converges to a long-term equilibrium only when contagion rates are low. Finally, Stiglitz and Guzman ( 2021 ) show that pandemics act as an unanticipated technology shock, generating unemployment that government intervention can effectively counteract. In the long term, uncertainty does not decline, thus further increasing the desirability of government intervention.

In Section 3 , we showed that, after a pandemic, life expectancy decreases because a healthy lifespan becomes more uncertain than before, leading to decreased investments in human capital. Similarly, scholars observe that the pandemic also reduces investments in physical capital. Lorentzen et al. ( 2008 ) show that the indirect effects of malaria on life expectancy are higher on physical rather than on human capital investments. Analyzing different databases and case studies, Gallup and Sachs ( 2001 ) conclude that the effects on per capita and total income are negative because both foreign investments and the revenues from tourist and business travelers are drastically lower in those countries affected by malaria. Analyzing the effects of HIV on 43 Asian countries from 1990 to 2015, Fawaz et al. ( 2019 ) conclude that investments and savings are usually inversely related to that pandemic. However, they show that both the sign and the intensity of the effect could differ depending on how far-sighted people are. Additionally, in low income countries, the negative effect of investment is independent of gender, but the pandemic affects men’s saving propensity more than women’s. Vice versa, in high income countries, when life expectancy decreases because of pandemic mortality, men save more but do not increase their investments, while women save less but invest more. Bloom and Mahal ( 1997 ) also focus on savings behavior, using it to explain the insignificant effect of HIV on the income per capita growth rate in 51 countries from 1980 to 1992. First, they observe that poor people are most affected by HIV, and that expensive medical treatments further aggravate their disadvantaged situation. However, social and economic mechanisms partially compensate for the high costs of official health services. Second, higher care costs cause both consumption and savings to drop. Moreover, lower life expectancy may increase precautionary savings in favor of surviving family members. Garrett ( 2008 ) studies the economic and social effects of the influenza pandemic 1918–9 in the US, analyzing newspaper articles and academic papers to draw lessons for modern pandemics. He observes that health care is relevant only with ideal health systems that certainly do not collapse after a pandemic, no matter how serious it is. Moreover, he concludes that, although a higher percentage of life insurance mitigates the adverse financial effects of a pandemic on households, the wealthiest households that will need it least will also be the more protected. Gustafsson-Wright et al. ( 2011 ) show that, in the case of pandemics, the private insurance system can be unfair and distortive, even in countries like Namibia, where the quality of public health care is relatively high, and most people have health insurance. The poor who cannot afford health insurance suffer from higher medical expenditure during a pandemic. There are no substantial effects on medical expenditure and family income until the virus starts affecting working capabilities; then, the economic consequences for the poorer strata worsen severely.

The comprehensive review from Hallegatte et al. ( 2020 ) confirms that poor people are disproportionately affected by natural hazards and disasters. Pandemics are no exception. Gaffeo ( 2003 ) provides additional support for the idea that pandemics can lead households into a poverty trap. Higher care costs and physical weakness reduce income capacity: for poor households, this leads to malnutrition, further reducing their physical capabilities, and increasing the pandemic’s morbidity and mortality. Physical and human capital trends reinforce this adverse and cumulative loop. Finally, he observes that pandemics worsen market failures for health insurance and local credit availability. Due to adverse selection and moral hazard, the higher uncertainty and information asymmetries inherent to pandemics lead to higher insurance premiums and reduced access to credit for the needy. Habyarimana et al. ( 2010 ) show that, while private firms could invest in their workers’ medical care, they are unlikely to do so. They describe the case of the pioneering firm Debswana Diamond Company in Botswana, which, since 2001, has invested in a program to improve the health of its workers affected by HIV. They observe that the treatment works, but the investment is unprofitable as the costs are too high, supporting the idea that African firms can only bear a small share of their workers’ health costs, if any.

While the previous literature shows that a pandemic increases income inequalities, Odugbesan and Rjoub ( 2019 ) argue that pandemics could hinder sustainable development. In this connection, these authors analyze the link between HIV and both public and private adjusted net savings, as an indicator of sustainable economic development, for 26 sub-Saharan African countries from 1990 to 2016. They show that HIV negatively and unidirectionally affects saving, and that the effect is particularly intense for upper-middle- and low-income countries. HIV also negatively affects the perception of government efficiency in low-middle-income countries. Odugbesan and Rjoub ( 2020 ) show that, for 23 sub-Saharan African countries from 1993 to 2016, the adverse relationship is bidirectional because the HIV control program and sustainable development compete for the same public spending budget. Keerthiratne and Tol ( 2017 ) show that the financial impact of disasters, pandemics included, is country- and time-specific. Moreover, Chakrabarty and Roy ( 2021 ) propose a model where the future pandemic uncertainty reduces government allocation of non-health expenditures in favor of the health ones. In 143 countries from 2000 to 2017, they found that higher-debt countries present a public misallocation and delay due to public constraints. A similar effect also emerges in low-income countries, but this is due to asymmetric information. Bai et al. ( 2021 ) show that, up to a point, the effects of pandemics could be efficiently mitigated with fiscal and monetary policies. Finally, Cavallo et al. ( 2013 ) confirm that governments and institutions could play a key role in the economic effects of a pandemic. Using a database from the Centre for Research on Epidemiology and Disasters, they observe that natural disasters, such as a pandemic, have a long-term negative economic impact only when they simultaneously cause a high number of deaths and are followed by institutional and political revolutions.

Knowledge and Innovation

Historians have identified numerous cases of pandemics being catalysts of significant, systemic change. In his comprehensive overview of the impact of the Black Death on Europe, Herlihy ( 1997 ) argues that it led to larger economic diversification, improved technology, and better lives, breaking the XIII century Malthusian deadlock by directing technological change towards the now cheaper input, i.e. capital. Although educational institutions were gravely hit, with one-sixth of European universities closed, as a long-term reaction to this short-term impact, a number of new educational institutions were built in reaction to the dearth of scholars. The new universities adopted more flexible curricula, contributing to the revival of classical studies. The need to face the Plague also forced the acceptance and diffusion of anatomical studies, fostering the development of the scientific approach in medicine. Epstein ( 2000 ) offers a similarly positive account, underlining how the Black Death brought much needed renewal. European feudalism was locked in a low-growth pattern, not because of lacking innovative capabilities, or market institutions, but rather due to the intensity of seigniorial rights, and the jurisdictional power of towns and lords, which were used to maximize the extraction of resources, mostly for military purposes, greatly hampering development. The scarcity of workforce caused by the Plague shock reduced the bargaining power of the landowner in favor of the worker. The resulting political and economic struggle is described as a process of “creative destruction”. The centralization process was greatly accelerated, leading to the consolidation of internal markets, the standardization of legal procedures and business norms, and the progressive rationalization of hierarchies. As a result, in the long term, transaction costs and economic uncertainty declined significantly, as testified by the structural decline in interest rates, which quickened the pace of innovation and trade growth. One of the long-lasting consequences of the pandemic for Europe was a more centralized, less predatory authority, able to support the process of economic development.

The institutionally “liquidationist” account of pandemics also applies to other centuries. For example, Alfani ( 2013 ) observes how plagues irrevocably affected the balance of power in Italy, favoring the rise of the House of Savoy, which eventually led to the Italian unification. Pamuk ( 2007 ) describes how the Plague created local skilled labor scarcity, incentivizing migration and fostering the dissemination of knowledge in the long term. Higher wages stimulated the substitution of land and capital for labor, creating conditions favorable to the implementation and diffusion of labor-saving innovations across all economic fields: the printing press, firearms, and high-capacity maritime transportation can all be linked to this general trend. Voigtländer and Voth ( 2013 ) offer what is perhaps the more optimistic view of the long-term impact of the Black Death, arguing that the positive impact of the persistently high European mortality rates dwarfed the effects of technological change for the entire 1500–1700 period. Clark ( 2007 ) provides a useful counterfactual, analyzing how the Far East, relatively less affected by plagues, maintained a growth regime characterized by both low income and low mortality. Not all plagues, however, are described in such a positive light.

Alfani and Percoco ( 2019 ) document the significant negative impact of the plague of 1629–30 on the long-term development of the Italian cities and the Italian economy. In addition to the mechanisms already explored in the previous sections, the authors argue that the significant losses suffered by the urban economic elite, who controlled most of the advanced manufacturing activities, caused an “ingenuity shock”, i.e. decreased both the availability and the willingness of the surviving elite to innovate in the urban industry, preferring agricultural investments instead. The latter took a dramatic hit in terms of production capabilities, which recovered only after decades. The exceptionally late recovery slowed the process of recovery and urbanization, weakening the Italian competitive position vis-à-vis Northern Europe in manufacturing. The almost uniform lack of wage increases signals how the long-term reduction in supply capabilities was not a consequence of lacking a skilled workforce, but rather a significant long-term change in the pattern of capitalist investments. This argument is important to underline how general, systemic renewal might encompass significant relative changes. The hypothesis that the plague did not damage, and perhaps even fostered, European development as a whole, is entirely consistent with the description of significant short- and long-term harm being wrought to large sections of the continental socioeconomic system. This is also consistent with Pamuk ( 2007 )‘s description of the divergence between North and South Europe, which emerged in response to the Plague as a consequence of the greater entrenchment of Southern political and economic elites, and the associated slower degree of institutional flexibility and, consequently, innovation and knowledge diffusion. In his recent overview of the subject, Alfani ( 2021 ) provides further evidence for the relevance of institutional change and policy choices on the long-term impact of pandemics on economic distribution and growth, illustrating how pandemics create opportunities for institutional change while also creating issues that, if not effectively tackled, can severely worsen the economic conditions of the poorer sections of the population.

On the negative side of the debate, Bar and Leukhina ( 2010 ) argue that epidemics have the capability to disrupt knowledge transfer across generations, leading to significant reductions in total factor productivity growth over time. They show that the long-term loss is moderated by the possibility of knowledge diffusion from regions that were spared negative health shocks, implying that the scope of this negative mechanism would be much greater in the case of a pandemic. Karlsson et al. ( 2014 ) document the impact of the Spanish flu on the Swedish economy, finding a long-term negative effect on capital income and a positive effect on the rate of poverty, both possibly driven by a significant persistent loss of skilled workers and consequently a decline in labor productivity. Jinjarak et al. ( 2021 ) show that the H3N2 epidemic can have permanent negative effects on productivity. Indeed, also when the productivity rate returns to its pre-shock level, some opportunities are lost or delayed forever, and then the innovation path will be always lower than without pandemics. Chen et al. ( 2021 ) even state that epidemics have the worst impact on innovation among natural disasters. Indeed, they affirm that epidemics reallocate public expenditure from innovation to health, reducing patent applications and innovation in 49 countries over 1985–2018. In Eastern Europe, feudal lords reacted to epidemics by re-enslaving the peasantry, greatly hampering the diffusion and implementation of new agricultural techniques, and locking the regions in a relative underdevelopment pattern called “second serfdom” (Domar 1970 ; Robinson and Acemoglu 2012 ). Similarly, the plagues affecting the Roman Empire and its successor states led to persistent socioeconomic degradation, aided by conservative political reforms introduced by the surviving elites (Duncan-Jones 1996 ; Sarris 2002 ; Little 2007 ; Harper 2016 ).

Yet pandemics are also great opportunities for the creation and diffusion of new knowledge. Bresalier ( 2012 ) documents how the Spanish influenza pandemic of 1918–9 was a turning point in the modernization of British medicine, leading to the establishment of key institutions and organizations that would shape the long-term development of medical research and healthcare, chief among them the Medical Research Council. The latter led to a wider active involvement of the state in sanitary matters. In general, the author shows that the pandemic’s effects were instrumental in developing the modern medical research system. Hopkins ( 1988 ) provides a description, similar in spirit, of how the successful smallpox eradication campaign conducted by the World Health Organization led to organizational learning, and the development and institutionalization of best practices, thereby greatly enhancing global medical response and prevention capabilities. Furthermore, large shocks, such as pandemics, can create windows of opportunity for change. This is echoed by Cohen ( 2019 )‘s review of the same episode, concluding that, while research and innovation activities played a key role in ensuring the campaign’s success, these efforts were at first greatly hindered by inappropriate practices and institutional routines. Only when the involved organizations implemented new and improved procedures did technological solutions become truly effective. While the scale differs, the argument echoes Pamuk ( 2007 )‘s. Wallace and Ràfols ( 2018 ) show that the avian flu highlighted how both excellence-based funding schemes and economic interests contribute to unduly restrict the field of active research as compared with the broad range of scientific opinions offered by experts, resulting in the development of a limited selection of techniques from the available knowledge base.

Analyzing the impact on the knowledge generation of vaccination subsidies, Finkelstein ( 2004 ) observes that, apart from the direct health impact from the eradication of illnesses, higher expected profitability might lead to socially wasteful competition for market share in the long term. Empirical evidence supports the hypothesis that the outcome depends on the state of the technological frontier and market conditions, as expressed by vaccination rates. In most cases, subsidies appear to lead to purely wasteful competition, but, in the case of the flu, there is evidence of increased product quality and demand, with the associated dynamic benefits outweighing static gains. Consistently, Kremer ( 2000 ) pointed out that market failures are endemic in the markets for both vaccine provision and vaccine research. While this opens up opportunities for policy intervention, it simultaneously underlines the challenges involved in the design of truly effective instruments. Similar challenges are described by Keohane ( 2016 ), in which innovative financial practices developed in the long term as a reaction to large shocks, including pandemics. He argues that “risk transfer for disease is a vital public good that the market has not otherwise provided” (ibid,130), and that new preventive and preparedness measures could be financed through the issue of catastrophe bonds. While these catastrophe bonds are expensive, the benefits of increased resilience in the face of health shocks might be a net gain, especially if the costs are somewhat lessened by pooled funds international initiatives. Although significant overlapping exists in terms of health-crisis preparedness and the organizational capacity of response, such an approach is probably more effective for estimating regional epidemic risks. Such instruments may be particularly useful in light of Confraria and Wang ( 2020 )‘s finding of persistent radical disparity between the disease burden carried by African countries and the amount of medical research dedicated to specifically African issues relative to global efforts.

The discussion so far has been focused on mechanisms that connect pandemics to the development of knowledge and practice, and from those to their economic and financial impact. Easterlin ( 1995 ) provides an original analysis based on a different viewpoint. Analyzing the steep decline in mortality that took place in northwestern Europe in the nineteenth century, he maintains that both the industrial and the health revolutions have a common root: the ascendancy of the scientific approach leading to technological change in both areas. The argument implies, on the one hand, that economic growth is not the main driver of life expectancy improvements, and, on the other, that improvements in health and life expectancy do not have a direct effect on economic outcomes, a position compatible with the relatively weak empirical evidence available (Acemoglu and Johnson 2007 ). The cause of structural change is argued to be found in the extraordinary stream of innovations implemented during the period, supported by a swarm of Schumpeterian “entrepreneurs”, only marginally motivated by profitability. Both those revolutions were triggered by the acceleration in the accumulation of usable empirical knowledge through the establishment and diffusion of the scientific method, the difference in timing to be imputed to the difficulty of developing and implementing the scientific solution. Deaton ( 2004 ) similarly argues that knowledge transfer, in the form of both effective practices and useful information, is key for explaining different national patterns of mortality decline and life expectancy increase, pointing out how globalization could benefit developing countries in this respect.

The argument is further expanded by Easterlin ( 1999 ), who showed that, while private firms have been crucial in fostering economic development, their role in improving health and especially infectious disease control practices has been marginal at best. Indeed, the preventive measures improve life expectancy more than the therapeutic ones, but firms rarely adopt them. However, the actions of households and governments are more important for disease prevention. The role of government is especially relevant because public action is necessary for both health education and prevention programs. Easterlin shows how irreplaceable effective knowledge and healthy practices are in the process of preventing and curing diseases, but how ineffective markets, contracts, and private property institutions have been in fostering their historical development, due to a number of related market failures. In fact, medical practitioners and public servants working towards the diffusion of salubrious norms have often found themselves hindered by economic actors defending their profitable, if deleterious, business. In his account of the US development, Gordon ( 2016 ) confirms both the decisive role of scientific advances and the importance of government intervention and regulation for the drastic improvement in health and life expectancy that took place in the nineteenth and twentieth centuries. However, Birchenall ( 2007 ) proposes an alternative explanation for the manifestly weak correlation between contemporaneous income growth and mortality, highlighting the significant long-term impact of income growth in terms of improved adult health and life expectancy, and subsequent mortality reduction. The argument is supported by a model illustrating how sustained economic growth, no matter the source, is sufficient to escape the Malthusian equilibrium, leading to drastically lower mortality in the process. Cervellati and Sunde ( 2015 ) provide further support by developing a model based on unified growth theory, also characterized by an inevitable take-off triggered by sufficient technological progress.

From the historical description emerges a complex interplay of negative and positive relations between health and business practices, driven by the contrast between short- and long-term interests, on the one hand, and private and public interests, on the other. This complexity is faced by Mokyr ( 2010 ) in his attempt to outline the principles of an evolutionary approach to the study of the development of useful medical knowledge. He begins by highlighting the two key idiosyncratic characteristics of such a knowledge field: the largely inelastic character of its demand, as all humans value their lives and health under all circumstances, and the relevance of negative exogenous shocks, such as the spread of pandemics. Medical knowledge maps to a set of instructions and recipes capable of guiding action, called techniques. According to context-specific selection criteria, only a subset of related techniques will actually be implemented for a given set of knowledge. While the actual usage of techniques is rival, knowledge can endlessly accumulate with only limited downsides. The evolutionary process of knowledge is mostly based on persuasion mechanisms; on the contrary, the related techniques are evaluated on their relative effectiveness. However, persistent empirical failure might not be sufficient as a selection mechanism, if no better technique is available on the basis of the socially accepted set of useful knowledge. This is particularly likely in the case of singleton techniques, based on the limited empirical knowledge that “this works”, and is therefore incapable of adaptation to sudden change. The shift towards scientific knowledge ensures that techniques are based on a more nuanced understanding of natural phenomena, enabling quicker and more efficient adaptation to exogenous shocks. Limits are provided by the path-dependency of knowledge development, which is only indirectly affected by the usefulness of related techniques. While this might result in the generation of “useless” knowledge, degrading response capacity in the present, sudden exogenous changes might lead to equally sudden revaluations. Summarizing, pandemics are a simultaneous shock to both practices and the underlying knowledge, as their often dramatic impact is sufficient to create opportunities for shifting entire development trajectories. The emergence of new knowledge and practices can be further amplified by diffuse and profound institutional change, which in turn may lead to significant upheavals, positive or negative. Owing to the complex nature of the outcomes, however, normative judgment lies beyond the capabilities of purely theoretical analysis.

The first key result of this review is that in the analysis of pandemics’ long-term economic consequences, historical and epidemiological characteristics are key (Donadelli et al. 2021 ; Meyers and Thomasson 2021 ). The extraordinary mortality associated with the Black Death is the most crucial factor in explaining its exceptional long-term consequences for European and global socioeconomic development (Pamuk 2007 ; Voigtländer and Voth 2013 ). Research on the consequences of HIV has rightly focused on its sexual transmission (Young 2005 ; Oster 2012 ; Fawaz et al. 2019 ; Gori et al. 2020 ) and the intergenerational consequences of increased mortality among working-age adults (Wobst and Arndt 2004 ; McDonald and Roberts 2006 ; McCannon and Rodriguez 2019 ). Therefore, the results offered by a general economic analysis of pandemics should be considered a wide collection of potential mechanisms, their empirical applicability and relative importance to be carefully weighed on a case-by-case basis. This does not imply that knowledge is not cumulative in this field, but rather that application of past knowledge should account for contextual factors in order to determine the likely long-term impact of a specific pandemic.

Our review of the literature goes one step further. By aggregating the pandemics by their effects on various economic factors, we observe some recurring trends, allowing some useful general conclusions to emerge. Table  1 provides a comprehensive overview of papers published in English focused on the relationship between pandemics and economic development. Following this paper’s structure, we organize the papers according to the mechanisms investigated into three broad categories: labor and human capital; physical capital and investments; and knowledge and innovation. We show that diseases can potentially affect all the productive factors of an economy in the long term. Most of the articles focus on the pandemic impacts on labor and human capital, all finding negative long-term impacts. However, some authors show that this effect could be partially mitigated in specific geographical areas, workers’ categories, and industrial sectors. The long-term effects on investment and physical capital are ambiguous: many papers show contrasting and complex mechanisms that do not allow us to know a priori the overall economic effects of pandemics on long-term investment trajectories. Notably, all papers which show long-term positive effects of pandemics on economic development focus on knowledge and innovation. However, negative cases also exist, leading many scholars to observe that the effect is potentially mixed, its direction dependent on necessary but not always implemented institutional changes.

The following general picture of the effects of pandemics on economic development emerges from our analysis. First, pandemics tend to reduce population and labor supply in both the short and the long term. This increases labor productivity, and therefore average wages. However, pandemics also hinder human capital accumulation, reducing productivity and per capita income growth. The negative effect is further compounded by the associated loss of knowledge, skills, experience, and innovative capabilities. Investments and savings are also negatively affected, leading to potential long-term hysteresis and the emergence of new, lower-income equilibria.

The pandemic shock can also break old patterns, opening new innovative trajectories previously inaccessible. The aggregate impact of these long-term mechanisms on the economic system is dependent on the relative relevance of, mostly harmful, adaptive mechanisms vis-à-vis potentially fruitful innovative responses. When the latter dominate the picture, negative long-term effects are overwhelmed by the benefits captured by radically new socioeconomic models of production, trade, and consumption. Therefore, the key factor determining the long-term impact of pandemics is identified with the innovation processes to which they give rise, and particularly the necessary accompanying processes of institutional change. While these effects are more difficult to capture using traditional economic methods, they are highlighted by historical analysis and should not be ignored by researchers and policymakers alike (Callegari and Feder 2021b ; Jena et al. 2021 ; Mandel and Veetil 2020 ).

Another important conclusion that can be drawn from this review is that most short-term outcomes, such as the immediate reduction in labor supply (Bloom and Sachs 1998 ; Alfani 2013 ), can bring, in the long term, significantly different consequences in both scope and quality when compared with the transient short-term effects (Delfino and Simmons 2005 ; Acemoglu and Johnson 2007 ; Basco et al. 2021 ). Several specific long-term mechanisms also emerge (e.g., Herlihy 1997 ; Young 2005 ; Augier and Yaly 2013 ), whose impact can hardly be overstated (Lorentzen et al. 2008 ; Voigtländer and Voth 2013 ). Therefore, it is unsurprising that attempts to produce comprehensive quantitative measurements of the economic consequences of pandemics appear to be affected by a significant downward bias (Lee and McKibbin 2004 ; Mahal 2004 ; Keogh-Brown et al. 2010 ). The exceptional nature of the shock brought by the Black Death of 1347–52 has obscured the economic consequences of the other late-medieval plagues, of which we know little. Lack of strong empirical evidence should be understood in the context of the complexity of the phenomena involved, and therefore not be interpreted at first sight as sufficient for falsification purposes. At the same time, however, the mechanisms at work in the most deadly pandemics should not be assumed to apply in exactly the same way to weaker, shorter, or smaller case episodes: the complexity of the phenomena under analysis cannot be reduced to a single formal model. Research on the long-term impacts of pandemics should be understood as a collaborative effort, with single researchers and teams focusing on different, yet compatible, mechanisms. A comprehensive picture can only emerge from subsequent efforts to produce cohesive overviews of the entirety of the debate rather than from a single model, no matter how ambitious.

Some lessons for policymakers also follow. The first is that, in light of the idiosyncratic characteristics of pandemics, precise and detailed analyses of their long-term effects are only possible ex-post. Therefore, preparations for such events should focus on reactive capabilities to ensure that: research efforts can be quickly and adequately supported; their results are credibly communicated to the authorities and the general public; and scientifically-founded counter-measures are rapidly implemented. These characteristics apply to both health measures and economic policy. Furthermore, when these dramatic events occur, the effective public intervention should be timely (Bai et al. 2021 ; Martin et al. 2020 ; Rodríguez-Caballero and Vera-Valdés 2020 ; Stiglitz and Guzman 2021 ) and designed starting from the general characteristics that emerged in this review, and then directed over time by distinctive challenges brought by the specific health shock. The second lesson is that symmetric health shocks will lead to asymmetric economic long-term consequences, as country-specific institutional settings mediate most effects. The tendencies towards the uncritical adoption of global solutions should be tempered by concern for the specific features of local socioeconomic systems, leading to a preliminary process of policy customization. Resistance and push-back from below should not be interpreted automatically as regressive tendencies, but rather as symptoms of the need for policy adaptation to local concerns. Finally, the third lesson is that, while pandemics require careful and extensive public intervention, what matters most in the long term is to avoid crushing the innovative response capabilities of the private sector. A virtuous process of creative destruction may emerge only if public intervention does not attempt to restore the old socioeconomic regime, potentially now unsustainable, at all costs, trampling adaptive bottom-up initiatives in the process. Consequently, while initial efforts should be aimed towards counteracting immediate shocks, they should eventually be complemented by measures aiming to support the positive qualitative developments triggered by the pandemic and curb emerging negative trends. Thus, a potential positive role for policy action can be expected to persist well beyond the outbreak period, focusing on enabling and supporting positive private responses through processes of institutional change.

Conclusions

The COVID-19 pandemic has made evident the need to study the overall economic effects of global health shocks. This literature review collects the main contributions that describe the long-term impact of a pandemic, in order to better understand the lessons from the current economic literature on this topic, and then to better address and analyze the effects on economic development of COVID-19 and of future risks of pandemics. The contributions are organized by discussing, in turn, the mechanisms affecting: labor and human capital; investments and physical capital; and knowledge and innovation. We conclude that pandemics could affect aggregate demand, aggregate supply, and productivity (Jinjarak et al. 2021 ). More precisely, we show that a pandemic reduces labor supply and human capital accumulation in the long term; that the complex interaction of these contrasting and idiosyncratic mechanisms on investments and savings is theoretically indeterminate; and that pandemics, when accompanied by supporting institutional change, can greatly benefit innovation and knowledge development. However, a detailed analysis of the pandemic’s specific characteristics, the affected economic systems, and their response remains necessary to understand which mechanisms can be expected to prevail and which policies should be implemented. The key factors determining their long-term impact are the associated processes of institutional change. We finally identify some general lessons for both researchers and policymakers. The research focuses on the theoretical plausibility and empirical significance of specific mechanisms that should be complemented by meta-analytic efforts aimed at reconstructing the resulting complexity. Policymakers should prioritize developing organizational learning and innovative capabilities, focusing on the ability to quickly adapt to emergencies, rather than developing rigid protocols calibrated over previous pandemics.

We expect the emergence of three new strands of literature in the near future. The first field of research will be on the long-term economic impact of the COVID-19 pandemic (Jordà et al. 2021 ; Poblete-Cazenave 2021 ; Tokic 2020 ). Such research will contribute to testing previously identified mechanisms reviewed here, while potentially also leading to the identification and theorization of new ones (Cacault et al. 2021 ; Silverio-Murillo et al. 2021 ; Costa Junior et al. 2021 ; Favilukis et al. 2021 ; Pagano et al. 2021 ). We also expect significant interest in comparing the impact of COVID-19 with previous pandemics, in order to highlight the relative importance of their respective defining features. The second field of research will be on the public and private responses to the effects of pandemics. The heterogeneity of both the method and timing of the institutional responses for the same health shock can be used to effectively test their efficiency and reduce the impact of future pandemic and epidemic waves (Adolph et al. 2021 ; Caserotti et al. 2021 ; Chakrabarty and Roy 2021 ; Croce et al. 2021 ; Martin et al. 2020 ). The ongoing debate on structural changes as a response to COVID-19 can be seen as a first step in increasing academic attention to the problem of the prediction of possible future pandemics and the precautionary measures to be taken in dealing with these events (Büscher et al. 2021 ; Dosi et al. 2020 ; Leach et al. 2021 ). Finally, we expect a more extensive interaction between, and cross-fertilization of, the medical and economic literatures (Avery et al. 2020 ; Murray 2020 ; Verikios 2020 ). This combination will be needed to better understand how a specific feature of the virus impacts economic development. A taxonomy of pandemics is necessary to group them correctly and then clarify how the different mechanisms move in and impact economic development. In general, we expect the academic debate on the long-term economic impact of pandemics to be renewed and reinforced in the coming years. This survey has the ultimate goal of preparing the basis for this inevitable and intellectually challenging new generation of scientific contributions on the long-term economic effects of pandemics.

Data Availability

Not applicable.

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Callegari, B., Feder, C. A Literature Review of Pandemics and Development: the Long-Term Perspective. EconDisCliCha 6 , 183–212 (2022). https://doi.org/10.1007/s41885-022-00106-w

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