Financial Stability vs. Sustainable Development and Its Financing

Abstract

Financing of sustainable development is a sophisticated and long-term process determined by a number of economic and non-economic factors. Financial instruments, private and public nature, exist that can be a source of financing of sustainable development. The choice of finance sources and instruments has an impact on the stability of economic systems and the efficiency of public expenditure with respect to sustainable development goals. The choice of financial instruments for financing development impact on financial stability and results in outcomes performed. The goal of the chapter is to examine relationships between financial stability reflected by public debt to gross domestic product (GDP) and sustainable development described by variables represented by three pillars of sustainable development: economic, social, and environmental. The role of environmentally related tax revenue has been identified as crucial for financing sustainable development goals.