The nexus between human development, official development assistance, carbon emissions, and governance in developing countries for the realization of sustainable development goals

Abstract

The paper aims to analyze human development through its interactions with environmental protection, governance, and official development assistance (ODA) in developing countries. This is done to allow the decision-makers of the latter to have an optimal approach to sustainable development goals (SDGs). For this matter, we used data from 56 developing countries for the period from 2005 to 2019 with the novel cross-sectionally augmented ARDL and augmented mean group (AMG). Interactive terms have been used for robustness checks. The results showed that, for low-income countries, ODA harms human development while governance effectiveness has a positive impact. The combination of governance effectiveness and ODA has a positive impact on human development. The same positive impact is found for the combination of governance and carbon emissions on human development. For middle-income countries, the findings showed that carbon emissions have a positive impact on human development. The combination of carbon emissions and ODA has a positive impact on human development. We recommend that; first, low-income countries’ policymakers focus on the achievement of the combination of SDG 16 and SDG 17 with SDG 16 as the central piece for SDGs realization; Second, middle-income countries’ policymakers focus on the achievement of the combination of SDG 8, SDG 16, and SDG 17 with SDG 8 as the central piece for SDGs realization. ODA donors must consider the needs of the countries receiving assistance and ease the conditions for obtaining aid. Moreover, we recommend collaboration focused on technology transfer between developed and developing countries.

Impact Statement

In recent years, the achievement of sustainable development goals has been the aim of many countries. Human development, linked with many sustainable development goals, plays a central role. Moreover, the current context of climate change is taking on a planetary scale, forcing all the governments of the world to consider only development that guarantees the protection of the environment. The 2030 agenda for pursuing sustainable development requires cooperation between all countries of the world while paying particular attention to the developing country. Thus, the objective of this paper is to analyze human development through its interactions with environmental protection, governance, and development assistance in developing countries. This is done to allow the decision-makers of the latter to have an optimal approach to development but also to allow their partners a better allocation of their assistance. For this matter, data for 56 developing countries for the period from 2005 to 2019 with the novel cross-section ARDL and augmented mean group (AMG) were used. Interactive terms have been used for robustness checks. The results showed that, for low-income countries, ODA harms human development while governance effectiveness has a positive impact. The combination of governance effectiveness and ODA has a positive impact on human development. The same positive impact is found for the combination of governance and carbon emissions on human development. For middle-income countries, the findings showed that carbon emissions have a positive impact on human development. The combination of carbon emissions and ODA has a positive impact on human development. For low-income countries, in regards of the positive impact of governance effectiveness on human development, we recommend that decision-makers prioritize the achievement of SDG 16 “peace, justice and strong institutions” and use this objective as a central piece in the achievement of other SDGs, particularly by fighting corruption in all its forms. We recommend as a priority an analysis of the real needs of every country considering its factor endowment not only for the elaboration of good policies but also for the optimal allocation of resources with the aim of achieving SDG 8 “decent work and economic growth”. moreover, low-income countries need cooperation with other countries, reflecting the importance of SDG 17 “partnerships for the goals”. For middle-income countries, carbon emissions, characterizing an increase in economic activity, constitute an important indicator of economic growth and the realisation of SDG 8 “decent work and economic growth”. We recommend that policymakers of middle-income countries focus on the realization of SDG 8 “decent work and economic growth” and use this objective as a central piece in the achievement of other SDGs for human development. Moreover, we recommend to decision-makers in these countries the association of SDG 8 and SDG 17 “partnerships for the goals” (materializing international cooperation) to further optimize human development.

Keywords:

• Human development
• environmental protection
• cross-section ARDL
• development assistance: energy consumption

JEL CLASSIFICATION:

• O2
• I3
• Q5
• C21

REVIEWING EDITOR:

• Goodness Aye, University of Agriculture, Makurdi Benue State, Nigeria

SUBJECTS:

• Agricultural economics
• development economics
• rural development
• econometrics
• economics

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Acknowledgments

B EVOLE PIERRE and B REGINE for their tremendous moral support and encouragement throughout the research process.

Author contribution

Jean Tony Ezako did all the work related to this research paper. Designed the research, did the required investigations, analyzed the data, and wrote the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data available at request to the author.

Notes

1 https://databank.worldbank.org/source/world-development-indicators.

2 https://databank.worldbank.org/source/worldwide-governance-indicators.

3 https://hdr.undp.org/data-center/human-development-index#/indicies/HDI.

4 https://data.oecd.org/oda/net-oda.htm.

5 Green aid or green Overseas Development Assistance (ODA) focuses on the reduction of carbon emissions by encouraging increased investment in efficient energy technologies, energy-saving facilities, CO₂ reservoirs and/or the production of renewable energy.

Additional information

Notes on contributors

Jean Tony Ezako

Jean Tony Ezako, Burundian citizen, holder of a bachelor's degree from the Faculty of Economics and Management of the University of BURUNDI. Moreover, I am passionate about economic research with the aim of contributing to the development of my country, Burundi, and developing countries in general. Thus, this paper on “The nexus between HUMAN DEVELOPMENT, Official development assistance, carbon emissions, and governance in developing countries for the realization of sustainable development goals” is part of a research project consisting of 4 papers that I initiated to focus on the role of financial economics in the development process. The other 3 papers are; analyze of inflation and economic growth relationship in Burundi: Analysis of Official Development Assistance and Total Factor Production relationship in developing countries: Analysis of globalisation and Total Factor Production relationship in developing countries.