A common criticism of welfare and sustainable development analyses and policies carried out in the past is that they were based on a silo approach. That is, each analyst and government department dealt with its own area and tried to achieve the objectives that were considered desirable for it, without worrying about the effects that this might have on other areas or dimensions also linked to well-being or sustainable development. In practice, this siloed approach was also accompanied by a reduction of all welfare to a single dimension (economic) and a single indicator (GDP, generally relative to population, as GDP per capita).

Gradually, voices (from sociologists, ecologists, psychologists, etc.) began to grow, calling for a more multidimensional approach to well-being and sustainable development, and warning that progress made in one dimension could be at the expense of progress made in another. As a result, they began to analyse the empirical relationships between economic well-being and happiness or life satisfaction (which the former was supposed to serve) or between economic well-being and the other dimensions of well-being (inequality, poverty, environmental sustainability, etc.). (See Navarro, 2022)

Thus, in the mid-1970s, the so-called Easterlin paradox appeared. This economist showed that, although at a certain point in time countries or individuals with higher levels of income also have higher levels of happiness, from a temporal perspective, in the long term there is no correlation between the evolution of income per capita and happiness. In other words, per capita income had multiplied several times in the US since the early 1950s, but people's happiness had remained virtually unchanged. To explain this, both internal psychological factors (it is the relative or comparative level of income that matters, not the absolute level; the mental state adapts to external changes, so that the relative emotional level is stable...) and external social mechanisms (other variables are just as important for well-being as income: health, family, social relations...) have been used to explain this. Consequently, it came to be considered that personal well-being could increase, even if income did not.

The relationship between economic growth and poverty was found to be generally positive. Empirical analysis tends to confirm that economic growth favours poverty reduction; and that poverty reduction is also favourable for economic growth.

However, while the relationship between poverty and economic growth is positive, this is less clear if we relate growth to another major social sub-dimension: inequality. Initially, Kuznets' analysis (the so-called Kuznets curve) did point in that direction. According to Kuznets, who published his study in the mid-1950s, the relationship between income and inequality was inverted U-shaped. That is, when the economy begins to industrialise and emerges from underdevelopment, inequality begins to grow; but then, if development continues, there comes a time when inequality begins to decline. Piketty (2014), however, analysing a longer period (up to the present day), has come to the conclusion that the relationship between income and inequality takes the form of an increasing curve: growth in per capita income is accompanied by increasing inequality.

Also, in the early 1990s, in response to growing environmental concerns, analysts began to analyse the relationship between economic growth and environmental sustainability. Early analyses showed a relationship between these variables similar to the one Kuznets had described for inequality, and so it began to be argued that the relationship between per capita income and environmental degradation fits the environmental Kuznets curve. Many analyses have been done to confirm or refute this curve. Certainly, if this curve were true, ‘green growth’ proposals would be more credible; if it were not, ‘degrowth’ advocates could use it to their advantage. At the risk of oversimplification, the results can be summarised as showing that, although for some pollutants (e.g. air or water pollution) the inverted U-shape is true, for others (CO2 emissions, loss of biodiversity, etc.) the deterioration has not stopped and is exceeding the boundaries the planet can withstand. In fact, the latest reviews show that in 6 of the 9 areas into which the analysis of the planet's health is divided, the limits that the planet can withstand have already been largely exceeded.

As for the relationship between the social and environmental dimensions, the reality so far shows that social progress has generally been accompanied by environmental deterioration.

In any case, although not focusing on just one dimension (economic growth) and trying to exploit possible synergies in pairs of objectives (leading to strategies of ‘inclusive growth’, ‘green growth’, etc.) was a step forward, working in pairs still lacked a joint perspective of the whole reality. It was in response to this gap that the OECD (2021) proposed the policy complementarities matrix shown in the accompanying Table.

 EFFICIENCYEQUITYENVIRONMENTAL SUSTAINABILITY 
ECONOMIC
POLICIES
Sustained
growth
Economic reforms may increase equity
[Inclusive growth]
Green growth may improve sustainability
[Green growth]
SOCIAL
POLICIES
Social policy may increase efficiency ( knowledge, trust, security) 
[Inclusive growth]
Social
cohesion
Environmentally sustainable social policies 

[Inequalities-environment nexus]
ENVIRONMENTAL
POLICIES 
Green economy may boost innovation 
[Green growth]
Social policy may can enhace  inclusiveness: poor people are the most hurt by environmental degradation
[Inequalities-environment nexus]
Sustainable 
environment 

 

The adoption of the 2030 Agenda and its associated Sustainable Development Goals (SDGs) in 2015 has been an even more radical step forward on this issue. Unlike previous sustainable development initiatives or the Millennium Development Goals (MDGs), the 2030 Agenda stipulates that the goals must be balanced, integrated and indivisible. That is, it is considered that sustainable development cannot leave behind any of the three basic dimensions (economic, social or environmental) and that such development can only be achieved if the interrelationships between the different goals and the targets included in them are taken into account.

With 17 SDGs and more than a hundred targets having been approved, the challenges they contain being so great and each territory having limited resources and capacities, the need to prioritise is evident. And when prioritising interventions, it is essential to consider the interrelationships (i.e., synergies and trade-offs) that exist between goals and targets. That is, the more effective the application of resources will be the more it focuses on interventions that affect areas that act as multipliers of synergies in other areas, so as to generate virtuous circles; and that, in parallel, it seeks either to avoid interventions that have a very negative impact on other areas or to adopt complementary measures that mitigate these negative effects.

In this context, since 2015 there has been a veritable boom in the literature on the interdependences between the goals and targets linked to well-being and sustainable development. Much progress has been made in the conceptual delimitation of this reality (see Navarro, 2024), but progress has not been as great in terms of providing concrete and valid guidelines on interdependences for public decision-makers and society in general.

There are three main reasons for that. Firstly, the analysis of interrelationships is all the more reliable the more detailed the analysis gets, so that it does not remain at the dimension or objective level, but goes down to the target level; but it is difficult for our minds to assimilate - and even more difficult to communicate - the result of the interdependences among more than 100 targets with each other (even more so if, in addition to the direct influences, indirect influences are also taken into account). Secondly, many of these analyses have been carried out with a clear academic bias, without involving policy makers and society at large and without trying to adapt the main methods and messages to them. Finally, the analyses show that the results of the analyses of interdependences are highly context-dependent (geo-economic, institutional and temporal conditions prevailing in each territory), so that the interrelationships detected in one study are not generalisable or valid for all territories.

Given that, on the one hand, the interlinkages vary significantly depending on the context, and that, on the other hand, the capacities to address the challenges, and the priorities and preferences with respect to each goal (and even the participation in the generation of the problems) vary substantially from one country to another, the UN and the SDG literature favours the application of the principle of ‘common but differentiated responsibilities’ when designing a country's strategies and interventions in the area of sustainable development. Despite the ambiguity of the studies on SDG interlinkages, the literature is fairly unanimous in considering that developed countries and territories should focus their interventions on reducing inequalities (SDG10) and combating climate change (SDG13), while low-income countries should prioritise reducing poverty (SDG2) and enabling economic growth (SDG8).

On the other hand, the principle of ‘common but differentiated responsibilities’ should not only apply at the state level, but also within each state, for each level of government (national, regional or local) and for each type of actor (government, business, academia and civil society). And, equally, the principle of ‘common but differentiated responsibilities’ means that differentiated responsibility should not be limited to the impacts that an agent exerts within the limits of its constituency (whether national or of its institutional sector), but should take into account how its actions affect the rest of the world or agents.

For a more detailed discussion of these issues, see Navarro (2024), which provides a comprehensive review of the literature on interrelationships in the dimensions of well-being.


mikel navarro

Mikel Navarro

Mikel Navarro is a Professor in Economics at Deusto Business School, of the University of Deusto, and Senior Researcher at Orkestra-Basque Institute of Competitiveness..