Financial crises and the attainment of the SDGs: an adjusted multidimensional poverty approach

Antoniades, Andreas, Widiarto, Indra and Antonarakis, Alexander S (2020) Financial crises and the attainment of the SDGs: an adjusted multidimensional poverty approach. Sustainability Science, 15 (6). pp. 1683-1698. ISSN 1862-4065

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This paper analyses the impact of financial crises on the Sustainable Development Goal of eradicating poverty. To do so, we develop an adjusted Multidimensional Poverty Framework (MPF) that includes 15 indicators that span across key poverty aspects related to income, basic needs, health, education and the environment. We then use an econometric model that allows us to examine the impact of financial crises on these indicators in 150 countries over the period 1980–2015. Our analysis produces new estimates on the impact of financial crises on poverty’s multiple social, economic and environmental aspects and equally important captures dynamic linkages between these aspects. Thus, we offer a better understanding of the potential impact of current debt dynamics on Multidimensional Poverty and demonstrate the need to move beyond the boundaries of SDG1, if we are to meet the target of eradicating poverty. Our results indicate that the current financial distress experienced by many low-income countries may reverse the progress that has been made hitherto in reducing poverty. We find that financial crises are associated with an approximately 10% increase of extreme poor in low-income countries. The impact is even stronger in some other poverty aspects. For instance, crises are associated with an average decrease of government spending in education by 17.72% in low-income countries. The dynamic linkages between most of the Multidimensional Poverty indicators, warn of a negative domino effect on a number of SDGs related to poverty, if there is a financial crisis shock. To pre-empt such a domino effect, the specific SDG target 17.4 on attaining long-term debt sustainability through coordinated policies plays a key role and requires urgent attention by the international community.

Item Type: Article
Keywords: SDGs, SDG1, SDG17, SDG target 17.4, debt dynamics, financial crises, multidimensional poverty, debt sustainability, monetary poverty, basic needs, health, education, environmental poverty, income groups, least developed countries
Schools and Departments: School of Global Studies > Geography
School of Global Studies > International Development
School of Global Studies > International Relations
Research Centres and Groups: Centre for Global Political Economy
Sussex Sustainability Research Programme
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
J Political Science > JA Political science (General)
Q Science > QA Mathematics > QA0276 Mathematical statistics
Depositing User: Alexander Antonarakis
Date Deposited: 08 Jan 2020 08:44
Last Modified: 26 Nov 2020 13:45

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