Financing Sustainable Development, Which Factors Can Interfere?: Empirical Evidence from Developing Countries

Abstract

The role of sustainable development financing resources in achieving sustainable development goals is one of the most important topics talked about in the recent sustainable development conflict, especially in the developing countries. Using the Autoregressive Distributed Lag (ARDL) model over the period 2002–2018, this study attempts to better identify sustainable development financing resources and examine their role in simultaneously ensuring economic growth and achieving social and environmental objectives in 24 developing countries. We found that increases in official development assistance, public debt, and remittances impede economic growth and human development and increase environmental pollution. Thus, they inhibit sustainable development. However, our findings demonstrated that foreign direct investment and international trade, which enhance economic growth, do not have any effect on CO2 emissions, while foreign direct investment inflows boost human development and international trade seems detrimental to it. Our study also show the effectiveness of CREDIT in achieving sustainability goals by reducing environmental degradation and improving economic growth and human development. Moreover, these empirical results may draw the attention of policymakers as they help them build rigorous economic policies to sustain economic development.