Making the Sustainable Development

Goals Work

Haciendo que los Objetivos de

Desarrollo Sostenible funcionen

Artículo de revisión

Received: August 26, 2016

Approved: December 10, 2016

* Gianni Vaggi: Phd en Economía por la Uni-

versidad de Cambridge. Director de la Coo-

peration and Development Network (CDN)

y profesor de los masters en cooperación y

desarrollo de la Universidad de pavia, Uni-

versidad de Belén, Mid-western University

of Nepal y la Universidad de Kenyatta, Nai-

rob. Coordinador of the UNESCO UNITWIN

Network on Cooperation and Development.

Contacto: gianni.vaggi@unipv.it

How to quote: Vaggi, G. (2016). Making the

Sustainable Development Goals Work. Inter-

national Journal of Cooperation & Develop-

ment. 3(2): 35-59

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Abstract

The achievement of the 17 Sustainable Development Goals approved by the UN General Assem-

bly in 2015 will depend on whether or not the last goal, “global partnership for sustainable deve-

lopment,” will work. The paper suggests that the leading principle for eective global partnership

should be the rebalancing of the negotiating power of the dierent stakeholders. Section I briey

sketches some changes to the notion of development and of cooperation since 1950. Section

II describes the process which has led to the SDGs and to the idea of cooperation as a global

partnership. Section III focuses on two major economic changes which have taken place since the

seventies: economic growth in Asia and the rise of international nance. Both of which have huge

implications for the SDGs and for global partnership. Section IV presents three steps which could

help to implement “global partnership for development” according to the principle of rebalancing.

Developing countries need more policy space especially in their trade and scal policies.

Keywords: Development, goals, cooperation, crisis

Resumen

El logro de los 17 Objetivos de Desarrollo Sostenible aprobados por la Asamblea General de las

Naciones Unidas en 2015 dependerá en gran medida del funcionamiento del último objetivo: “Aso-

ciación global para el desarrollo sostenible”. El documento sugiere que el punto principal para una

asociación global efectiva debería ser el reequilibrio del poder de negociación de las diferentes

partes interesadas. De esta manera, en la sección I se describen brevemente algunos cambios

en la noción de desarrollo y cooperación desde 1950. En la Sección II se describe el proceso que

ha conducido a los ODS y a la idea de cooperación como asociación mundial. La sección III se

centra en dos grandes cambios económicos que han tenido lugar desde la década de los setenta:

el crecimiento económico en Asia y el auge de las nanzas internacionales. Ambos hechos tienen

enormes implicaciones para los ODS y para la asociación global. La sección IV presenta tres pa-

sos que podrían ayudar a implementar la “asociación global para el desarrollo” de acuerdo con el

principio de reequilibrio. Los países en desarrollo necesitan más espacio político, especialmente

en sus políticas comerciales y scales.

Palabras clave: Desarrollo, Objetivo de Desarrollo Sostenible (ODS), cooperación, crisis.

Gianni Vaggi

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1. Introduction

The structure of the paper is as follows. Section

II describe in an extremely synthetic way the

main evolution in the notions of development

and of cooperation since the sixties up to the

new Sustainable Development Goals, SDGs.

Of course this is not a comprehensive review

of the two issues, for that one can read the very

helpful work of Tassara 2012. The paper shows

that the notion of development has received a

much broader content than it was in the sixties,

when it was by and large dened in terms of

economic growth. Development is now a mul-

ti-faced phenomenon and it is also focused

on people’s empowerment, there has been a

clear movement towards the individual, micro,

aspects, while the more structural and macro

feature are now less central.

Section III presents a brief view of the evolu-

tion from the Millennium Development Goals,

MDGs, to the SDGs and in focuses on the last

MDG and SDGs, both on global partnership,

which seems to be the new view of cooperation.

But how can this view be implemented? De-

velopment and cooperation do not take place

in the vacuum and must not be confused with

the numerous discussions, proposals, debates

which are being putting forward every day. De-

velopment and cooperation/partnership must

take into account the social, economic and

political structures existing in our world and

we must realistically examine the opportunities

and the constraints of this global ‘environment’.

Therefore section IV brings us down to the real

world and describes two major changes in the

this global economic environment: economic

growth in Asia and the growing role of interna-

tional nance. These two facts greatly inuence

the environment in which the SDGs must be

pursued through global partnership.

Section V faces SDG 17 and provides some

suggestions on how to support to make global

partnership work in the new economic lands-

cape, briey described in Section IV. Here we

nd the general principle which should lead all

the negotiations which are inevitably necessary

in order to engage with the SDGs. The paper

suggests the general principle of re-balancing

of the negotiating powers as the leading way

to try to make global partnership not only fair

but also eective. Re-balancing is a way to put

into action the two principles of universality and

dierentiation which are in the UN declaration

of September 2015. This section provides also

some examples of what re-balancing should be

and it examines some of the topics which are

part of SDG 17 such as trade, scal and indus-

trial policies.

2. The evolution of the notions of

development and of international

cooperation (in a nutshell)

A. In the beginning it was economic

growth

On September 25-27, 2016 the seventieth ses-

sion of the United Nations General Assembly

approved a resolution called Transforming our

world: the 2030 Agenda for Sustainable Develo-

pment with 17 Sustainable Development Goals,

SDGs, and 169 targets, now we have also 241

indicators(see UN, 2015 and UN-ECOSOC,

2016). This resolution, also called Agenda

2030, presents a very wide view of develop-

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Making the Sustainable Development Goals Work

ment and in many ways the SDGs can be re-

garded as sort of contemporary consensus on

what development is all about. Sixty years ago

there were dierent views.

Once upon a time there was economic growth:

development was mainly dened in terms of in-

creases in income per capita and it was by and

large regarded as a one dimensional notion. In

development economics there was, and still is,

a theory explaining that low income countries

will converge to the income per capita of the

high income ones. The accumulation of physi-

cal capital was regarded as the main element

in the explanation of economic growth and So-

low’s 1956 model implies that capital will ow to

low income economies where it is scarce and

hence it can yield higher returns. Technical pro-

gress too will also move freely across countries

and provided that the markets are competitive

and given enough time all countries will tend to

have similar incomes per capita.

If this views were correct there would be no need

for developmental theories and policies, nor

for cooperation activities. Cooperation should

conne itself to the mitigation of the short run

unpleasant occurrences which might be asso-

ciated the long run process of economic grow-

th. Cooperation should provide safety nets and

care for basic needs and human development.

Since the late forties there have been econo-

mic views which are quite skeptical about the

eciency of the market economy and its abi-

lity to bring wellbeing to all countries. These

non-mainstream contributions date back to the

structural change approach of Raul Prebisch

and Hans Singer. In the late sixties and in the

seventies Dudley Seers and the International

Labour Oce, ILO, highlight the importance

of employment and of decent work(see Seers,

1969 and ILO, 1976). Sunna and Gualerzi pro-

vide a very useful reading to these heterodox

economic views on development, which howe-

ver they too focused on the economic compo-

nent of development (see Sunna and Gualerzi

2016, chapters 3 and 5).

Coming back to the more optimistic views about

the economic perspectives of developing coun-

tries it is easy to see that apart from East Asia

the eighties and nineties have not seen much

convergence of most low income countries

towards the living standards of high income

economies. Moreover theoretical studies and

practical experience have shown that economic

growth alone does not guarantee participatory

and sustainable development. There are rapidly

growing countries where social hardships are

multiplying and new forms of poverty are being

created. There are other countries where des-

pite slow growth considerable improvements

have been made in terms human development

and well-being.

Nowadays development is no longer dened in

terms of income per capita only; development is

regarded as a multi-faced phenomenon and as

evolving process. Let us briey point out some

of the major contributions to this new view. It all

started with the debates in the sixties and se-

venties, but it was only towards the end of the

eighties which a general consensus began to

emerge on a broader denition of development,

(more in Vaggi, 2010).

Three major contributions to this change can be

identied.

First, the 1987 Bruntland Report by the United

nations gives a rst denition of sustainable

Gianni Vaggi

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development: a process which can satisfy the

needs of present generations without compro-

mising the possibilities of future generations

(see United Nations, 1987). With this report the

environment dimension and the idea of sustai-

nability become essential aspects of the notion

of development.

Second, in 1990 we have the rst Human Deve-

lopment Report by UNDP with the Human Deve-

lopment Index, which includes not only income,

but also education and health(see UNDP, 1990).

Third, in September 2000 the United Nations

present the Millenium Development Goals,

MDGs, eight goals which provide a widely ac-

cepted denition of development, including the

ght against poverty, health, education, envi-

ronment and gender.

More recently the very notion of Gross Domes-

tic Product has been criticized as an appropria-

te indicator of the standard of living of people.

The research work focuses on the denition of

well-being, perhaps the most famous report is

the Stiglitz, Sen and Fitoussi Report of 2008

(see Stiglitz et al., 2008).

Environmental sustainability receives a lot of at-

tention, see for instance the work of Dasgupta

at Cambridge (see Dasgupta and Duraiappah,

2012). In 2012 we have also the rst World Ha-

ppiness Report by a team led by Jerey Sachs

(see Helliwell et al., 2013).

Poverty too is no longer dened in terms of in-

come only, but more in general as ‘deprivation’

and ‘exclusion’ or the lack of capabilities, in the

sense of lack of the possibility to decide and to

choose about one’s life. Since 2010 we have

the Multidimensional Poverty Index by OPHI,

the Oxford Poverty and Human Development

Initiative (see Alkire et al., 2013).

All these approaches to development share

some major similarities; we single out two of

them. First, development corresponds to the

enlargement of opportunities and possibilities of

choice by the people. Second, development it is

a process which is appreciated in a positive way

by the people who are involved in it. The evolu-

tion of the notion of development and the emer-

gence of that of ‘human development’ have been

greatly inuenced by the work of Nobel Laureate

Amartya Sen (see Sen, 1985 and 1999).

The idea of the Sustainable Development Goals

emerged in 2011 during the preparatory works

for the 2012 Rio+20 conference thanks to a pro-

posal by Colombia and Guatemala(see Loewe

and Rippin, 2015, pp. 2, 4). The COP 21 Paris

meeting of December 2016 has been the nal

event linking development to climate change

and environmental sustainability. However the

notion of sustainability has already received a

broad denition, which is not limited to the envi-

ronmental aspect(see for instance Sachs 1999).

B. International cooperation

Dierent views of development have been ac-

companied by dierent ideas about how to

achieve it.

The eighties and nineties have been the period

of the Washington Consensus, a term coined

by John Williamson to indicate ten major points

which characterized the IMF-World Bank re-

commendations to developing countries(see

Williamson, 1990). These policies have been

the key elements of the Structural Adjustment

Programs of the IMF and the World Bank. The-

se standardized policies were considered to be

necessary and sucient to trigger economic

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Making the Sustainable Development Goals Work

growth in very dierent countries; it was a ‘one

recipe ts all’ approach. It is worth noticing that

these policies were also the result of a rather

optimistic view and limited view about the fact

that market forces alone could generate econo-

mic growth and development.

The structural adjustment policies received

strong criticisms. The idea of a post-Washing-

ton Consensus derives from a paper by Joseph

Stiglitz in 1998 (see Stiglitz, 1998), when he

was Senior Vice-president of the World Bank. In

the paper Stiglitz advocates the need for more

articulated and less economic focused policies,

he also highlights the fact that development has

to be interpreted in terms of broader goals, not

just income.

In January 1999 the then President of the World

Bank James Wolfenshon launched the Com-

prehensive Development Framework, CDF(see

Wolfenshon, 1999 and http://web.worldbank.

org/archive/website01013/WEB/0__CON-3.

HTM). This very ambitious, but by now rather

forgotten, approach proposes a new methodo-

logy to approach development and the related

policies. Development is dened in terms of

many aspects and the analysis includes many

dierent actors: the nation states, international

organizations, civil society, the business sector.

In a two dimensional table there is an attempt

to identify the actors who could be more eec-

tive in pursuing each development aspect. In a

way this approach anticipates SDG number 17,

which deals with “...global partnership for sus-

tainable development”.

Below there is a very fats description of some

major intentional forums which have shaped a

widespread view on cooperation and partner-

ship: I am not interested in the precise descrip-

tion of the dierent contributions, but just to

show how the idea of cooperation has evolved

towards the notion of global partnership.

In march 2002 in Monterrey Mexico a confe-

rence was held on Financing for Development,

from which the so called Monterrey consensus

emerged. Developing countries should imple-

ment the appropriate policies and reforms, abo-

ve all good governance, but the rich countries

should concretely help mainly by committing

more and more predictable and stable resour-

ces, aid.

In 2016 only ve of countries reach

the 0.7 percent of GDP earmarked for aid, which

has been the UN target since the seventies(see

OECD, 2015). From November 29 to December

2, 2008 a second conference on Financing for

Development was held in Doha. A Third confe-

rence of Financing for Development was held

by the UN in Addis Ababa on July 2015 in pre-

paration for the September General Assembly(-

see UN-AAAA, 2015).

Since 2003 ve High Level Forums have been

held in order to dene the best practices in in-

ternational cooperation. The major topic of all

these conferences has been aid eectiveness,

which has however been examined from die-

rent points of view. The 2005 Paris declaration

recommends the donor to have more accoun-

table programs, to adopt coherent aid policies

and to coordinate among themselves. In 2008

the third high level forum produced the Accra

Agenda for Action in which the notion of coun-

try ownership is underlined.

In 2011 Busan the fourth High Level Forum on

Aid Eectiveness ended up with the Busan

Partnership for Eective Development Co-ope-

In Monterrey emphasis was also laid on the theme

of global public goods which include knowledge and re-

search(see also Sumner and Lawo, 2013, p.35).

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ration, which focuses on development eec-

tiveness and not just aid eectiveness. This

approach requires having shared evaluation

tools between all partners, including partners

in the ‘South’. The involvement of civil society

is another important issue and more attention

is dedicated to the development outcomes of

policies rather than to input indicators only.

In April 2014 in Mexico City there was the First

High-Level meeting of the Global Partnership

for Eective Development Co-operation, which

was in fact a follow up of all the previous High

Level Forums and where the emphasis was on

the partnership aspect of international coope-

ration(see UN-FHLM, 2014). All these forums

prepared the way to SDG 17, the one dealing

with global partnership.

The outcome of these debates about develo-

pment and cooperation can be described with

two words: empowerment and ownership.

Empowerment is the process of enhancing the

capacity of individuals or groups to make choi-

ces and to transform those choices into desired

actions and outcomes (Alsop et al., 2006, p.10)

Thus empowerment is the possibility to enlarge

one’s opportunities and her set of choices.

Ownership is the ability of developing countries

and of people to take the development pro-

cess into their own hands. Country ownership

appears both in the Paris Declaration and in the

Accra Agenda for Action(see above).

² Country ownership has also been used to indicate

the alignment of the countries to the conditionalities of the

Structural Adjustment Programs and Poverty Reduction

Strategy Papers of the nineties, see Buiter, 2007. For the

point of view of civil society organizations on country own-

ership see Interaction, 2011.

Country ownership means that there is sucient

political support within a country to implement its

developmental strategy, including the projects,

programs, and policies for which external part-

ners provide assistance. (see http://web.world-

bank.org/archive/website01013/WEB/0__CON-

5.HTM)

The country has to be in the driving seat, but of

course is not just a problem of the central govern-

ment’s ability to take decisions, it requires the in-

volvement of all stakeholders: local governments,

Civil Society Organizations, communities etc.

3. From the Millenium Development

Goals to the Sustainable Develop-

ment Goals

The MDGs played a very important role in hi-

ghlighting the major development challenges

confronting developing countries and the entire

world. Extreme poverty, was at the forefront with

the one dollar a day story which derives mainly

from Martin Ravaillon’s work rst exemplied

in the 1990 World Development Report (see

World Bank, 1990, pp.27-9). The one dollar a

day threshold has now become 1.90 at 2011

PPP, Purchasing Power Parities, prices.

It might look strange that at the time in which

the denitions of development and of poverty

are being enlarged and enriched MDG 1 refers

to income poverty. However we must remember

that from 1980 to 2000 three main regions in the

world, Latin America and the Caribbean, Middle

East and North Africa and Sub-Saharan Africa

had no increase at all in income per capita, with

many countries experiencing a signicant decli-

ne. It was the lost decades period, mainly due to

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Making the Sustainable Development Goals Work

the debt crisis which erupted in Mexico in 1982.

It was obvious to regard the ght against inco-

me poverty as a priority; as a matter of fact the

World Bank dedicated to poverty two World De-

velopment Reports, that of 1990 and again that

of 2000/2001(see World Bank, 1990 and World

Bank, 2000/2001).

Since the 2012 Rio+20 conference there have

been a lot of debates on the post 2015 goals,

let me recall three preparatory UN documents.

The rst document is the May 2013 report by

the United Nations, The report of the High-Le-

vel Panel of Eminent Persons on the Post-2015

Development Agenda, which includes 12 goals

and 54 targets(see UN-HLP, 2013). This report

stresses the fact that all goals should be exa-

mined having in mind ve transformative shifts:

leave no one behind, sustainability, jobs and in-

clusive growth, peace and institutions and glo-

bal partnership(see ibid.). The ve ‘transforma-

tive shifts’ provide an indication of the priorities

and above all of the relevant dimensions which

should shape future policies and actions; the

shifts appear in the September 2015 UN Reso-

lution but not with the same emphasis.

Leave no one behind implies that attention

should focus on the most disadvantaged and

marginalized groups and people, with very

important implication for policies in any type

of goal: health, education, environment, food,

energy, water, megacities etc . This ‘shift’ does

not appear as a separate goal in the nal UNGA

resolution of 2015, but it is quite often mentio-

ned all along that declaration.

Jobs and inclusive growth asks for a reconside-

ration of the production and consumption mo-

del and recognize that people do achieve more

opportunities and become more independent

mainly through access to decent growth. Mo-

reover this shift is a warning about the fact that

not any type of growth may be inclusive. SDG

number 8 includes some of these recommen-

dations.

Sustainability, is clearly a cross-cutting issue

for all goals.

Of course there must be eective and open ins-

titutions, but in the post 2015 period peace will

be a challenge in itself and cannot be limited

to good governance, transparency, etc. Building

peace provides a broader vision of institutions.

A second document is the report of the Open

Working Group for Sustainable Development

Goals presented in July 2014. The Open Wor-

king Group was established following the

Rio+20 Conference; which is basically the text

which will end up into the September 2015 Re-

solution(see UN-OWG, 2014).

The third document is the Synthesis Report

presented by the UN Secretary-General on De-

cember 4

2014 and entitled The road to dig-

nity by 2030. The report suggests to maintain

the 17 goals but they are now clustered into six

essential elements: dignity, people, prosperity,

planet, justice, partnership(see UN-SR, 2014,

p.16-19).

The three documents represent the most im-

portant contributions to the nal Resolution of

September 2015, which re-groups the goals

into ve areas of critical importance: People,

Planet, Prosperity, Peace, Partnership, the ve

Ps. Moreover the 2015 Resolution establishes

that sustainability has three dimensions: econo-

mic, social and environmental, all to be pursued

at the same time.

Gianni Vaggi

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Agenda 2030 is often criticized because there

are too many goals which do overlap and some

goals are extremely ambitious: zero poverty by

2030.

There is also a confusion between ends

and means, between those targets which could

be regarded as being a nal desired outcome,

like end hunger, gender equality, and those

goals which are indeed instrumental to achieve

the former ones, such as energy, infrastructures.

Notice that from the 2000 MDGs to the 2015 UN

Resolution the last goal always refers to partner-

ship. In the MDGs goal number 8 reads: Develop

a global partnership for development. There are

6 targets and 16 indicators which include issues

such as the increase of aid, the extension of mar-

ket access, debt sustainability. MDG 8 has been

quite often criticized because many targets and

indicators are very dicult to measure and in ge-

neral it provides a generic commitment to achie-

ve the other goals. The story of MDG 8 is howe-

ver rather interesting because originally there

was no goal number 8. As late as June 2000 in a

publication by OECD, World Bank, IMF and UN

called A better world for all the goals were still

seven(see OECD, 2000). MDG 8 was introdu-

ced later at the request of developing countries

which wanted the goals to be the responsibility

of all countries including the rich ones.

SDG 17 reads: Strengthen the means of imple-

mentation and revitalize the global partnership

for sustainable development, with 19 targets(-

see UN, 2015). SDG 17 seems to refer more to

the quantitative aspect, that is to say to nan-

cial support. The 2014 Synthesis Report was

more specic asking for “better regulation and

more stability in the international nancial and

³ Among the several comments see Maxwell, 2014

and Engel and Knoll, 2014. On the progress and improve-

ments of SDGs over MDGs see Fukuda-Parr, 2016.

monetary system”(see UN-SR, 2014, p.22, n.

95) and it even suggested the possibility of

nancial transaction taxes(ibid, p.25, n. 112).

Moreover the Synthesis Report requested the

implementation of “comprehensive and ade-

quate nancial regulations in all countries, as

the risk of another global nancial crisis has not

be suciently reduced”(ibid. p. 25, n. 114). The-

se recommendations did not nd their way into

the 2015 nal Resolution.

Goal 17 confronts itself with a major issue

which is the main topic of this paper: how to

give concrete content to the term ‘global part-

nership’. This implies raising the necessary re-

sources to support the SDGs which could be an

enormous amount of money(see Greenhill and

Prizzon, 2012). However partnership for deve-

lopment is not just about funds and above all

it does not take place in a vacuum, it must be

implemented in a specic economic and social

international environment. “Global partnership”

cannot ignore some major changes that have

taken place in the world economy since the ni-

neteen-eighties. We highlight two of them:

-economic growth in Asia

-the rising role of international nance.

Both facts have a structural nature; they are

here to stay and they have huge implications for

the new goals; it is only by taking into account

these facts that international cooperation activi-

ties and policies can be set in a realistic context.

We will briey see some positive and some ne-

gative aspects of both facts.

For a wider discussion of both changes see Vaggi,

2015. On Asian growth and the beautiful image of the

“ying geese” model see UNCTAD, 1996. For a history of

this model see Kasahara, 2013. Akyuz,2015 provides an

interesting analysis of nancial markets and developing

countries.

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Making the Sustainable Development Goals Work

4. The economy strikes back: from

G7 to G……?

A. The bright side of economic growth

Let us mention three features on the positive

side.

First, at the world level MDG 1, halving the

number of those living in extreme poverty,

less than 1.90 dollar a day at 2011 Purchasing

Power Parities, PPP, prices, has been achieved

thanks to economic growth in Asia and in China

in particular. According to the so called absolute

poverty line of 1.90 dollar a day in at 2011PPP

prices most of the poor people now live in mi-

ddle income countries(see Sumner, 2013, p.1,

Sumner and Lawo, 2013).

Second, the so called ‘South’ now has some

global powers, China, perhaps India, and some

regional powers, Brazil, South Africa and Rus-

sia, though since 2013 all three of them have

been going through an economic slowdown.

Emerging economies are not all the same, but

the old divisions into rich and poor countries, into

and north and south and the tri-partition into rst,

second and third world need to be replaced by a

more articulated geography. The world has mo-

ved from G7 to G20 and the capitalist economy

is still reshaping economic relations. Between

1995 and 2012 south-south trade has doubled

its share in world exports. Now there are more

players on the ground and with all diculties and

complications there are real possibilities for sou-

th-south cooperation and the SDGs strongly em-

phasize the universal aspect of the development

challenges rather than the north-south coopera-

tion, see Sanahuja, 2016. This does not mean

that any type of economic relationship between

developing countries should be automatically

classied as South-South cooperation. Accor-

ding to the Economic Commission for Latin Ame-

rica and the Caribbean, better known as CEPAL,

“the prevailing relationship between China and

Latin America and the Caribbean has been of a

North-South nature” (ECLAC 2016, p.14).

Third, since 1998 private ows to developing

countries have become more and more impor-

tant; Foreign Direct Investment and remittan-

ces are the largest nancial ows to developing

countries, with 600 and 450 billion of US dollars

respectively in 2014. Remittances include only

the ocially registered ones, hundreds of billions

are assumed to enter developing countries in an

unocial way. International aid is around 130

USD billion. Private benefactors and philanthro-

py ows have also increased enormously in the

rst fteen years of the new millennium.

B. However....on the dark side

Unfortunately some negative economic facts

characterize the international economic situa-

tion and could jeopardize the progress towards

the new SDGs.

First, since 2007-2088 a major nancial cri-

sis has hit the rich countries generating large

variability and major turbulences in nancial

markets. International nance is characterized

by systemic risk; the best description of this

situation is in the work of Hyman Minsky, who

foresaw the potential damages of uncontrolled

nance more than forty years ago. His ‘nancial

instability hypothesis’ dates back to the mid-se-

venties when the overall market for derivatives

was still puny(see Minsky, 1974).

More ows could come from some new development

banks such as the New Development Bank of the BRICS

and the Asian Infrastructure Investment Bank, AIIB, both

initiatives were launched in 2014 with the backing of Chi-

na(see Grifth-Jones, 2014).

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Second, since the eighties income distribution

has worsened in all High Income economies

reversing a pattern of increasing equality which

had taken place from 1950 till 1980. According to

Piketty this largely depends on the fact that du-

ring the last thirty years returns on wealth have

been higher than the growth rates of the eco-

nomy, a fact which has led the concentration of

wealth into the hands of few people(see Piketty,

2013).

SDGs 10 asks for a reduction of inequali-

ties and this is a big improvement on the MDGs;

now equity is at the forefront in the debates about

development, but the changes in the economic

landscape which are discussed in this section

show how dicult and complicated it might be

to try to achieve this goal.

As we shall see in the

next section the reduction of inequalities has a

lot to do with the way in which global partnership

for development will be interpreted.

Third, since 2008 economic growth has been

quite weak in most High Income Economies

and there has been a slowdown also in emer-

ging economies. This has led to a debate on

the so called secular stagnation hypothesis, fo-

llowing Larry Summers’ reappraisal of this term.

Many explanations of this phenomenon focus

on the relationship between savings and invest-

ment and on the fact that due to an excess of

savings the real interest rate needed to equa-

te investments and savings at full employment

level may be negative.

This means that mone-

tary policy becomes ineective because due

to low ination and low nominal rates there is a

On the trends on global income inequality among

countries see also Milanovic, 2012.

Tassara, 2016 provides a very insightful analysis of

the challenges facing Latin American countries.

On the various explanations for secular stagna-

tion see Baldwin and Teulings, 2014. The origin of the

term ‘secular stagnation’ is discussed in Backhouse and

Boianovsky, 2016.

oor, the so called Zero Bound Level, ZBL, for

nominal rates (see Baldwin, and Teulings 2014,

p. 2.). To put it in Keynesian terms it is as if the

liquidity trap had become a permanent feature

of the economy(see Krugman’s paper in Bald-

win, and Teulings 2014, p.15). At the world level

there is an excess of savings over investments,

we could say that investments do not growth

enough notwithstanding cheap and abundant

savings. Major explanations for the increase in

savings are related to demographic changes(i-

bid., pp. 11-12, 14), and to an increase in life

expectancy combined with lower population

growth rate, the so called “ageing society”.

Other authors believe that technical progress is

losing its potentialities in terms of smaller pro-

ductivity increases than in the past(see the pa-

per by Gordon in Baldwin and Teulings, 2014).

In my view the savings glut plus demography

plus weak technical progress hypotheses are

not sucient elements to explain the slowdown

of growth rates in high income economies, it is

necessary to look for both supply and demand

side causes. There is a need for large invest-

ments in particular in infrastructures in both

high income economies(see Caballero R.J. and

Farhi E., 2014, pp. 118-119) and in developing

countries where population is still growing(see

Wol G.B., 2014, p. 146).

The present crisis has many features of a cri-

sis of overproduction with a lack of eective

demand which derives also from the worse-

ning income distribution (see Palley, 2016). For

many years China has been investing 35-40 per

cent of GDP, reaching 45 per cent in 2010, whi-

le other countries in Asia have followed similar

path, even if not with such exceptionally high in-

These phenomena increase the dependency ratio

because of the raising share of pensioners.

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

vestment ratios. This has contributed to a situa-

tion of overcapacity at the world level; the ove-

rall productive capacity installed could produce

more goods than those which can protably be

sold on international markets. Some sectors

appear to be saturated, the car industry being

a case in point, but this is also the case for iron,

for the containers see-transport business and

for many consumer durables and also for some

high-tech products.

Fourth, the above situation generates huge im-

balances which manifest themselves both in

the dierent growth rates among countries and

above all in the decits/surpluses of the trade

and current accounts. This happens among di-

erent countries and regions, Asia is a surplus

region and US are a decit country, but also

inside the same regional areas, the Eurozone

being an obvious example. In the twelve months

up to July 2016 the Eurozone as a whole had

a hefty 3 per cent of GDP surplus in the current

account with a similar decit in the budget ba-

lance, but there were huge disparities within it.

The current account surplus was more than 8 of

the GDP in Germany and it was almost 10 per

cent in the Netherlands.

According to the free competitive assumption

and to the ecient market hypothesis these im-

balances should not exist in the long run. With

some simplications we could say that accor-

ding to mainstream theory capitals should ow

from decit to surplus countries. A decit in the

current account implies that these countries

must pay for the extra imports over their exports.

This requires an outow in their nancial ac-

count side of the balance of payment, which co-

rresponds to an inow for the surplus countries.

This type of capital movements should increase

Germany current account surplus has been the larg-

est one in the world for many years, also when the Euro was

stronger than in mid 2016.

the exchange rates in surplus economies and

bring it down in the decit ones. Therefore im-

ports from surplus-countries would be more

expensive and exports from decit-countries

would be cheaper, this change in the exchange

rate should help to reduce the imbalances.

Fifth, since the year 2000 in many developing

countries, including Sub-Saharan Africa econo-

mic growth rates are higher than before, howe-

ver young people do not nd appropriate em-

ployment. The situation is particularly severe in

some North Africa and Middle East countries,

from Morocco to Lebanon; in order to absorb all

those entering the labour market these coun-

tries should generate between 2.5 and 3 million

of new jobs every year. Remember that SDG 8

asks for full employment and decent work for all.

In these countries there is a mismatch between

the number of educated people looking for a

job and the ability of the economies to absorb

them; quite often the result is migration. This

fact is extremely worrying because it implies

that even when developing countries invest in

education, they have a high probability to lose

many skilled workers. Education is a funda-

mental component of human development and

it also has huge potentialities to generate inno-

vation and growth, however these potentialities

are curtailed by the unfavourable conditions of

the demand for labour. This is a clear case in

which individual empowerment does not come

through because the external environment re-

present much more a constraint than an oppor-

tunity. Decent work is a typical situation which

can only be achieved if there are improvements

at the personal, micro, level and also in the

general economic conditions of the country or

region, that is to say at the macro level. The wi-

dening of personal capabilities must be accom-

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

panied by a more vibrant and decent labour

market.

C. Neo-Mercantilism

The rst four points above regard mainly high

income countries, so why should developing

countries bother? Unfortunately both stagna-

ting economies and structural imbalances are

stimulating neo-mercantilistic and protectionist

policies; nations ercely compete on interna-

tional markets(see also UNCTAD, 2014, pp.

17-19). Many countries try to overcome these

diculties with deationary policies, which are

made up of strict budgetary policies, compres-

sion of domestic demand and the fostering

of exports. These policies lead to increasing

competition and to neo-protectionist attitudes.

Of course not all countries can run a trade sur-

plus at the same time; Mercantilism is a ze-

ro-sum-game which leads to “beggar thy neigh-

bor” type of policies.

East Asian countries and China are often re-

garded as the obvious culprits, mainly because

they keep undervalued exchange rates, which

helps to build current account surpluses and

huge reserves. Export subsidies and import

duties are the traditional protectionist policies,

but we also have selective credit systems, the

management of the exchange rate, tax exemp-

tion on reinvested prots, domestic wages/

incomes compression, subsidies to Research

and Development, product standards, rules of

origin etc.. Needless to say the opposition to

the free movement of people quite often com-

plements neo-protectionist policies.

At the beginning of the seventeen century Thomas

Mun a director of the British East India Company wrote“….

we must observe this rule; to sell more to strangers yearly

than we consume of theirs in value.”(Mun,1623?, p. 5). Mun

goes on defending the role of trade with the East-Indies

(ibid., p. 7). In Mun’s balance of trade system a surplus in

foreign trade is the main cause of national wealth.

We must not confuse today Mercantilistic

approach with the lack of competition on in-

ternational markets. During the last thirty years

there have been many newcomers in inter-

national markets, in particular in East Asia.

However, this has very little to do with the idea

of competition characterized by a multitude of

independent producers, this is a competition

among giants. In many sectors: from automo-

tive, to capital equipment, to infrastructure,

to international nance there is a strong con-

centration of productive capacity, also throu-

gh mergers and acquisition. At the world level

these sectors are characterized by oligopo-

listic competition, in which big transnational

companies either organize cartels and lobby

for the state to support them with appropriate

policies.

In 1776 Adam Smith wrote against the alliance

between big corporations and the state becau-

se it could lead to lower growth and it could

also modify the nature of society.

This alliance could perpetuate and even

enlarge the dierences between the di-

erent market players, thus increasing

imbalances instead of reducing them

(see Smith 1776, book IV,iii.c.9-10).

Today economic forces look very powerful and

we must inevitably ask ourselves how all those

nice ideas of development as a complex and

multi-faces process could be put into practice.

How to enlarge people capabilities in an eec-

tive way? Would not people be overwhelmed

by the economic forces and rising inequality?

What about the new SDGs and global partner-

ship? It looks as if on one side we had an ideal

process of development which however risks to

be just in our debates and imagination because

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

on the other side there is the real world, whe-

re capitalist markets continuously reshape the

economic and social structures in which deve-

lopment should take place. In oligopolistic mar-

kets rms try to bend the market mechanisms

to their interests.

International nance too is an example of an

oligopolistic market in which few international

systemic banks play a dominant role, and there

is a sort of Financial Mercantilism(see more in

Vaggi, 2015).

How can Agenda 2030 work in these condi-

tions?

4. On global partnership: dialogue

and negotiations

A. SDG 17: last but not least

We have started the story of development with

just one goal, economic growth, now we have

plenty of goals, targets and indicators; it is clear

that more negotiations are needed and deci-

sions will have to be taken on the priority goals

and on the means of implementation. The suc-

cess of the SDGs will largely depend on and

the way in which the priorities will be chosen

and how they will be supported.

In Table 1 I have organized the 17 goals and

the 169 targets into four clusters, of course it is

possible to group the goals in dierent ways(-

see for instance Loewe and Rippin, 2015, p. 4

and OECD, 2015, p. 48). Some associations

between the ve areas of the 2015 resolution

and the rst three clusters are straightforward

and do not need any comment.

• The Environment cluster largely inclu-

des the items in the area called Planet of

the 2015 UN Resolution.

• The area People largely overlaps with

the cluster Human Development.

• The cluster Economics/Financing

includes both economic issues and -

nancial means of implementation and

it incorporates many targets of the area

Prosperity. This cluster underlines the

economic dimension of sustainability,

but it also refers to the social and econo-

mic structures which might either favour

or constraint the progress towards the

SDGs. Some targets belonging to goals

which appear in the rst two clusters are

classied in the third cluster because

they are related to nancing and to the

means of implementation.

• Partnership is the same in the 2015 Re-

solution and in the clusters.

• SDG 16 peace and justice comprises

inclusive societies, accountability, insti-

tutions. In view of the many complicated

challenges that it poses SDG 16 could

be in a cluster by itself; it could also be

part of the partnership cluster, because

it has vast implications in terms of global

partnership. We leave it under Human

Development in order to underscore the

human rights aspect and the social di-

mension of peace: peace and justice are

both rights and end-goals in themselves.

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Table 1

The SDGs and their targets into four clusters

People

Human Development

Planet

Environment

Prosperity

Economics/Financing

Partnership

1. Poverty 1.a

2. Hunger 2.4, 2.5

2.3, 2.4, 2.a, 2.b,

2.c

3. Health 3.9 3.b, 3c

4. Education 4.b

5. Gender 5.4, 5.a

6. Water and sanitation 6. Water and sanitation 6.5 6.a

7.1 7. Energy 7.b 7.a

8.3, 8.5, 8.7, 8.8 8.4, 8.9 8. Inclusive growth 8.a, 8.b, 9.5

9.4 9. Infrastructures 9.a

10.2, 10.3, 10.4, 10.7 10. Reduce inequality 10.6, 10.7, 10.a,

10.b, 10.c

11.1, 11.5, 11.7 11. Cities 11.4, 11.c

12. Sustainable Con-

sumption

and Production

12.1 12.6, 12.7, 12.a,

12.c

13. Climate change 13.1, 13.a

14. Oceans 14.b 14.4, 14.6, 14.7,

14.a, 14.c

15. Territorial ecosys-

tems

15.a, 15.b 15.6, 15.7,

16. Peace, justice

and institutions

16.4 16.3, 16.8

17.7 17.1-17.5, 17.11, 17.12 17. Global

partnership

The cluster classication requires some com-

ments.

First, the targets in grey could t into dierent

clusters, they show that there are many over-

lapping among the dierent goals and that the

large number and the complexity of the targets

require more dialogue and negotiations among

all the stakeholders.

Second, Table 1 explicitly mentions only those

targets which appear in a cluster dierent from

that of the goal they refer too.

Third and most important, most goals and tar-

gets are heavily interconnected, a point often

repeated in the UN September 2015 Reso-

lution(see for instance UN 2015, p. 11, point

55). In general Table 1 shows that many of the

targets included in the rst sixteen goals have

to do with negotiations and require a dialogue

Source: Original elaboration from the author

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

among all stakeholders, this is why they appear

in the partnership cluster.

Whatever the classication of the die-

rent goals without a serious partnership

made up of a continuous dialogue and

thorough negotiations the SDGs will lar-

gely stay on paper.

The need to negotiate the actual cooperation

policies plus the considerations of section III on

the growing economic imbalances imply that

“the global partnership for sustainable develo-

pment” of SDG 17 should be based on a basic

principle:

to re-balance the economic and power

relationships between the dierent ac-

tors.

This paper strongly contents that the re-balan-

cing of negotiating powers is the only principle

which could lead to an eective partnership

and hopefully could lead to improvement on the

road to the SDGs by 2030. This is because of

two facts with which Agenda 2030 has to con-

front itself:

• rst, the to the complexity and to the in-

terconnectedness of all goals and targets,

which is also represented in Table 1;

• second, the variety and the existing dieren-

ces among all the stakeholders, see chart 1.

These two conditions cannot be by-passed and

must be accepted as aspects of the real world

in which Agenda 2030 must be implemented.

The two conditions also explain why it might be

dicult to have a real and eective partnership

for development. Re-balancing is an attempt

to put the dialogue and negotiations which are

the content of the partnership on a more rea-

listic footing; on one side it acknowledges the

existing dierences and on the other it tries to

overcome them.

Probably international cooperation will not cea-

se to be mainly donor-driven, but the role of

traditional donors will become less and less re-

levant and more voices from the ‘global south’

will make themselves heard. In order to have a

useful dialogue it is necessary to give concre-

te substance to global partnership, subsection

V.B. will provide some examples.

SDG 17 says: strengthen the means of imple-

mentation and revitalize the global partnership

for sustainable development, with 19 targets

and three systemic issues, see Table 2.

Table 2

SDG 17 and its composition

5 Groups 12 targets in the rst 4 groups 7 targets in the 3 systemic issues

Finance 5

Technology 3

Capacity building 1

Trade 3

Systemic issues 3 Policy and institutional coherence

2 Multi-stakeholder partnership

2 Data monitoring and accountability

Source: Original elaboration from the author

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

How to make it work? Empowerment, owners-

hip and global partnership require that coopera-

tion should be a dialogue among less unequal

partners. At the moment partners are very much

dierent in terms of wealth, trade and nancial

capacities, knowledge. The re-balancing of

negotiating capacities should be the leading

principle in order to achieve an eective global

partnership.

This process of re-balancing requires at least

three steps.

Step 1: country ownership.

Faced with a lot of goals and targets each coun-

try will have to decide its priorities; it is hard to

imagine Malawi moving ahead on all SDGs

and their targets. There must be a mechanism

which should lead to identication of the coun-

try’s main objectives.

Countries in the south should set their

own agenda. Something like this, even if not

so clearly stated, is mentioned in target 17.15

which asks for no donors’ driven programs at

the country level. This is not so simple as it mi-

ght appear, because some decisions could not

be at harmony with the opinion of the ‘donors’. It

is easy to imagine situations in which the die-

rent stakeholders could have dierent priorities.

The whole process might require procedures,

negotiations and a lot of time and truthfulness

by all the sides involved.

Step 2: trilateral dialogue

Dialogue and negotiations will take place

among traditional donors and recipient coun-

tries but not only. There are the so called “new

donors” which are mainly countries, such as the

BRICS and other emerging economies, but the-

re are also other stakeholders which can pro-

vide both resources and technical assistance:

development banks, philanthropy institutions,

sovereign funds, private investors, business

people. In principle all these actors should dis-

cuss and agree on the most appropriate deve-

lopment policies, see Chart 1.

If global partnership must be eective then the

outcomes of the various forums from Rome

2003 to the Addis Ababa conference on Fi-

nancing for Development of July 2015 should

be adopted by all stakeholders. Old and New

donors should give the same message and

agree on the various aid eectiveness criteria,

the main issue being policy coherence in coo-

peration activities and coherence also between

trade and aid policies. All the principles which

have been agreed during the several forums of

the years two thousand at the OECD-DAC level,

see section II.B. above, should be accepted by

all donors, old and new ones. This policy cohe-

rence by old and new donors is not at all easy;

a lot of aid and loans are still ‘tide’, but consider

also labour standards and migrants’ rights, tax

competition to attract investments and so on.

Moreover it is not just a matter of making ‘new

donor countries’ to agree on these principles,

but to involve also several very dierent private

institutions.

Step 3 is the core of the argument and requires

a section on its own.

B. Step 3: universality and dierentiation

and the need for policy space

Consultations and dialogue should allow deve-

loping countries more negotiating power. This

follows from the need of re-balancing a situa-

tion with large asymmetries. When the parties

are very much dierent in terms of resources,

capacities and power, the re-balancing of these

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

powers helps to guarantee a fairer game; this

process might require limitations for the most

powerful actors and additional possibilities for

the weaker parties.

Re-balancing is needed because of the exis-

ting asymmetries which are neither eliminated

nor reduced by market forces. The principle of

re-balancing is the logical consequences of the

two principles of universality and dierentiation

which are often quoted in the UN 2015 Reso-

lution, but which also appear in other ocial

documents(see for instance ERD, 2015 pp.

310-. and UN-SR, 2014, n. 84). Universali-

ty means that SDGs are for all countries and

for all people, not just for the poorer countries

and all stakeholders should be committed to

them. Dierentiation recognizes that contribu-

tions to the achievement of the SDGs depend

on the dierent capacities and needs of the

dierent countries. The principle of “common

but dierentiated responsibility” derives from

the Rio+20 conference(see for instance Bola-

ji-Adio, 2015, pp. 2, 8).

These considerations imply full use of policy

space by developing countries (SDG 17.15,

see also UNCTAD, 2014 and Eurodad, 2014);

they must be allowed to implement policies and

actions which could reduce the distance with

both high income countries and the emerging

economic powers.

Let us indicate some of the main areas where

policy space is needed and on which human

and institutional capacities should focus, in

brackets the reference to some specic targets

which appear in the SDGs.

1. Trade, Special and Dierential Treatment

(10.a)

2. Industrial policies: Export, Taxes, Invest-

ments, exchange rate

3. Decent work, Migrations (8.8, 10.7, 10.c)

4. Public nances and budget: tax system,

subsidies

5. Social protection systems (1.3).

Let me examine the implementation of policy

space in three main areas: trade relations, in-

dustrial and budgetary policies, social protec-

tion systems.

First, trade relations are a typical case in

which applying the same rules to players with

enormous dierences as to their economic

structure and productive capacity would be

against fairness and probably would also lead

to inecient outcomes.

Following the Uruguay Round Agreement and

the establishment of the World Trade Organi-

zation in 1995 the possibility for developing

countries to intervene in foreign trade has been

greatly constrained. Trade negotiations have to

be based on the principle of reciprocity among

all trading partners and this has generated

some paradoxical situations.

As UNCTAD points out (see UNCTAD 2014

pp.82-.) some exibility still exists particularly

for developing countries. These exceptions to

the general obligations which are incorporated

into the main trade agreements go under the

name of special and dierential treatment,

SDT. However, far from being an exception SDT

should be the norm in so far as it helps to re-ba-

lance the very large dierences in productive

The group of UN experts on nancing for develop-

ment asks for trade and investment rules to be geared

towards the sustainable development of poorer countries

(see UN-ICESDF, 2014, pp. 41-42).

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

capacities of high income and emerging eco-

nomies on one side and of Low Income and

Least Developed countries on the other. SDT

in trade is mentioned in SDG 10.a. The major

problems do not concern trade in goods and

services, but international agreements on pro-

perty rights, investments, dispute settlements,

nancial services in general.

The 2001 Everything But Arms, EBA, EU

approach to trade with developing countries is a

good example of Special and Dierential Treat-

ment; EBA implies duty-free and quota-free

imports to the EU from the Least Developed

Countries, but for armaments.

Regional integration and coordination

among countries in the south would also

greatly help the process of re-balancing die-

rent negotiating powers. The Economic Part-

nership Agreements, EPAs, originating out of

the Cotonou agreement of 2000 between the

EU and the group of African, Caribbean, Paci-

c, ACP, countries have acknowledged the prin-

ciple that negotiations take place between the

EU and regional groups and not with individual

countries. Unfortunately it took more than ten

years of negotiations to reach some nal agree-

ments(see Vaggi and Evans 2002).

Regional integration would help developing

countries to achieve a stronger negotiating po-

sition and it would encourage the countries to

establish regular procedures for consultations

at the regional level(see Ramsamy, et al. 014).

Think of infrastructures, energy, logistic, all is-

sues which should be dealt with at a suprana-

tional level. African countries are trying to have

a common strategy also on SDG 16 which fo-

cus on good governance and peace(see Bola-

ji-Adio, 2015, pp. vi, 11).

Second, industrial and budgetary policies

are among the most important policy tools to

be used to reduce the productive capacity ga-

p(see UNCTAD, 2014, p. 92). Industrial policies

have been widely adopted in East Asia, but in

the past also in OECD countries. The govern-

ment intervenes to promote technological in-

novations and to sustain exports, this can be

done with direct subsidies and tax exemptions

but also through favourable credit conditions.

Special Economic Zones are an example of

active industrial policies, mainly designed to

attract Foreign Direct Investments, FDIs which

are extremely popular in developing econo-

mies. Inside these zones labour relations and

labour standards hardly adhere to those recom-

mended by ‘decent work’, which is part of SDG

8. ECLAC ask for the possibility to implement

environmentally-focused industrial policies(see

ECLAC, 2016 p. 70).

In order to implement these policies and also to

ght poverty developing countries need scal

space, that is to say a budgetary policy which is

countercyclical and in particular it allows coun-

tries to expand public expenditures in periods of

declining growth(see ECLAC, 2016, pp. 67-8).

The scal system is another important dimen-

sion of the policy space(see UNCTAD, 2014 pp.

161-2). Developing countries still derive a lot of

their public revenues from taxes on foreign tra-

de and from indirect taxation in general. Tax re-

venues are already the largest domestic source

of nance in Africa with a tax to GDP ratio of

17%, OECD countries have a 35% or more(see

Mackie, and Williams 2015, p.7). However the

tax composition needs to be improved. Develo-

ping countries need to widen their tax base and

to rely more on income taxes, not to mention

wealth taxes, but raising domestic resources

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

for development is a big challenge(see Touray,

2014). To increase the public revenue from inco-

mes takes time and implies major advances in

good governance and also in administrative ca-

pacities. Without major improvement in tax co-

llection and in the scal system in general there

is no way to have a more equitable society and

to reduce the dependence from foreign funds.

Of course the shift towards a more ecient and

more equitable tax systems would require time

and support from foreign stakeholders.

More policy space for Low Income and Lower

Middle Income countries implies granting them

the possibility to adopt active policies to promo-

te development, with a direct involvement of the

government

. The active role of the state in pro-

moting domestic productive capacities and in

strengthening the country’s position in foreign

trade might look like a neo-mercantilist policy.

However, there is a major dierence between

the developmental role of the state in develo-

ping countries and neo-mercantilism:

• the former aims at reducing the distan-

ces between Low and High Income

countries;

• the latter aims at maintaining and even

enlarging these dierences.

In Upper Middle Income Countries which

have already reached decent levels of income

per capita the developmental role of the state

should focus on domestic demand and on its

composition.

Third, social protection systems, SPS, in

Europe we could use the term ‘welfare system’.

Social protection is meant to avoid the worse-

On the developmental role of the state in Asian eco-

nomic growth see Wade, 1990.

ning of the conditions of the poorest people,

remember that the rst transformative shift of

the High Level Panel document is leave no one

behind (see UN-HLP, 2013). Social protection

for those who have more diculties is a way to

re-balance an unfair, may be even dangerous,

situation and it ts well with the general princi-

ple of reducing the dierences and giving more

opportunities to the weakest social groups.

Social protection oors are mentioned in the

document by the group of experts on develo-

pment nance (see UN-ICESDF, 2014, p. 22),

where we also nd the term global safety nets

(ibid., p. 44), an expression which had already

been used during the debt crisis of the eighties.

Europe could provide a major contribution to

this debate because in many ways the welfare

system is a unique social and political experi-

ment of Europe. The welfare system originated

in Europe during the last century and in most

High Income Countries it achieved major re-

sults in the years between 1945 and 1980(see

Piketty, 2013), contributing to the emergence of

what we call ‘middle class’. The challenges are

straightforward:

• will this welfare system survive in the

countries where it exists?

• will it be extended to emerging/develo-

ping countries?

The Eurodad-Ibis position paper for the 2015

Addis Ababa conference on Financing for De-

velopment stresses the issue that a compre-

hensive system of social protection is already

part of the commitment of the UN states(see

Eurodad-Ibis, 2015, p.6).

Gianni Vaggi

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

A nal point on dialogue and negotiation. The

rise of international nance is more worrying

that that of East Asia. In the latter case there are

countries and governments with whom it is ne-

cessary to carry on a dialogue on many relevant

partnership issues, such as climate change, hu-

man rights, labour conditions, trade regulations

etc. The partners are well identied and there are

also forums where debates could take place.

In the case of nance it is much less clear who

the partners are and how to have a debate.

Where are the institutional settings for the ne-

gotiations? We all know the big international

investment banks, but there are a myriad of di-

erent types of funds, some nancial centers,

such as Wall Street and the City, and other os-

hore centers. Capital, not labour, is fully mobile

across countries and the number and types of

nancial products continuously increase. Most

derivative products are not traded in regulated

nancial markets, but they are negotiated ‘Over

The Counter’, that is to say with agreements

and contracts between two or more parties and

without any type of supervisory authority. How

is it possible to open a dialogue for develop-

ment with these international nancial inves-

tors? We know how volatile nancial ows are

and how dangerous this volatility has been for

developing countries(see Akyuz, 2005). Inows

can be either a blessing or a curse, but unfortu-

nately since the capital ows to Latin America

of the late seventies we have seen a lot of capi-

tal reversal, or outows which have had terrible

consequences on developing countries. This

was the case during the big debt crises of the

eighties, Argentina had similar problems be-

tween 1995 and 2001 and even recently some

African countries risk economic crises because

of their international debts.

Conclusions

Steps 1, 2 and 3 will never materialize without

good governance, not only in the sense of avoi-

ding or at least limiting corruption, but also in

terms of institutional and administrative capaci-

ty. Target 16.a mentions the need to “streng-

then relevant national institutions… for building

capacities at all level”. Without major improve-

ments in administrative and institutional capa-

cities it would be impossible to achieve the new

SDGs and global partnership for sustainable

development will be an empty statement.

Re-balancing plus the improvement of institu-

tional capacities in developing countries should

prevent the widening of the gap between the

partners and smooth the existing dierences.

Re-balancing is in line with Montesquieu’s fa-

mous tripartite division of powers, without this

separation there is no freedom(see Montes-

quieu, 1748 vol. 1 p.164). Checks and balances

imply the existence of counteracting forces: “In

order to avoid that someone abuses of power, it

is necessary that, in the state of things, power

obstruct power” (ibid., pp. 162-3).

Economic growth could produce checks and

balances and it might reduce dierences, but it

could also increase distances and concentrate

economic power into few big rms. There is no

automatic trickle down mechanism of economic

growth; free trade and free capital movements

cannot guarantee that the development goals

will be achieved. Free trade is an extremely

powerful mechanism and after centuries of

wars in Europe Montesquieu could even wri-

te that “the natural consequence of trade is to

bring peace”(ibid., vol. 2, p. 8). More than two

centuries later referring to Montesquieu Hirsch-

man will speak of doux commerce, sweet trade,

Revista Internacional de Cooperación y Desarrollo Vol. 3 No. 2 | Año 2016 | PP. 35-59

Making the Sustainable Development Goals Work

as a formidable argument for capitalism(see

Hirschman, 1977, p. 60). However trade could

also be quite sour and the same for nance.

Development is no automatic by product of

economic growth, positive actions and policis

are needed to generate more equitable and

inclusive societies. Goals are like a lighthouse

showing the direction; economy, nance and

even politics are the ocean in which we have

to navigate. SDG 17 on global partnership is

about the rules on the boat.

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