Growth as the Cornerstone of the SDGs

December 05, 2014

I’m pleased to be on this list of “top economist” signatories of an open letter to UN Secretary-General Ban Ki-Moon endorsing the simple idea that economic growth should be the foundation stone on which the other Sustainable Development Goals, especially poverty reduction, are built. (I’m the only non-professor on the list; whether professor or not, and whether economist or not, if you agree, leave a comment below, or tweet this blog post).

Most people can agree that everything on the current list (of 17 proposed SDGs) makes sense; the issue is what gets priority, for domestic and foreign financing, as a means (growth is a means to many ends), and what gets priority for financing as an end, directly (e.g., health and education). In the case of the Millennium Development Goals, ends such as reducing infant mortality got more attention and investment (and more aid money) than what might in some cases have been higher-return investment in means such as growth and infrastructure.  The word on the street is that developing countries now want more attention to the means to achieve many ends.  

Growth is mentioned in the proposed list of 17, but it’s #8 and the central truth of its necessity is obscured by complicated and compromise-driven (I suspect) modifiers: “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”

A simpler goal would be clearer: “Promote economic growth,” or perhaps “Promote poverty-reducing growth.” 

It is growth that ultimately empowers societies and their peoples to find their own solutions; with healthy growth in Africa in the last decade, Africans (Andrew Mwenda, Dambisa Moyo) are asking whether foreign aid is a good thing at all. The same is true at the level of families and people: even if you’re still poor by Western standards, being able to buy a scooter expands not only your access to good jobs but your mental horizons.

I realize endorsing “growth” without any caveats is controversial.  It is true that growth without appropriate pricing of carbon and other pollutants, water, access to fisheries, and other public goods is problematic; climate change and its threat to development outcomes is an apt example. But the fundamental problem is not growth itself but the difficulty of forging appropriate and far-sighted public policies to deal with public goods and other so-called externalities; that difficulty is only worsened by low growth and shrinking opportunities, which weary citizens and discourage legislators from ambitious policy fixes. The historic record suggests that it is growth that creates social demand for environmental services, reduces intolerance, and encourages public and private investment in technological change.  Growth in that sense has beneficent “moral” consequences and so provides far more than merely material benefits.

To endorse growth is not to deny the logic of ending poverty as a worthy goal; it is only to remind that growth has proved (so far) necessary and often sufficient for reducing poverty (in China, in India, in Latin America despite high inequality, and in Africa over the last decade), and to admit that ending poverty is far too modest a goal in today’s world (as Lant Pritchett argues here).  Nor is to endorse growth to ignore the challenge of fair growth (aka inclusive growth aka shared prosperity) or the fact that inequality matters for many reasons including because, in an often vicious circle, it can inhibit growth itself.

If you agree, as our open letter concludes, that a clear commitment to strong, economic growth needs to be at the forefront of the post-2015 development, leave a comment below. If you disagree, well, let’s have that comment too.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.