Institutional Impact on Achieving the Sustainable Development Goal of Ending Poverty


  •  Jalini K. Galabada    

Abstract

The role of institutions is increasingly emphasised as a cornerstone of achieving the Sustainable Development Goals (SDGs). However, previous studies have not sufficiently considered the relationship between institutions and SDGs using cross-country empirical analysis. Therefore, this study examined the effects of institutions on SDG1 (end poverty) performance using a panel data set covering 111 countries for the period 2010–2019. Instrumental variable (IV) estimation (2SLS) and the three-stage least squares (3SLS) method were used to explore the direct and indirect impacts, respectively, of institutions on SDG1 performance. The institutional impact was captured using a composite index developed from individual worldwide governance indicators and SDG1 performance was evaluated with an index constructed using the SDG index database. The results showed that institutions have a highly significant direct positive relationship with SDG1 performance. Regulatory quality has the strongest influence on SDG1 performance while political stability has the lowest. Furthermore, institutions affect SDG1 indirectly via mediating factors – state policy, economic growth, and SDG2 (end hunger) performance. This study provides robust empirical evidence for enhanced regulatory quality and control of corruption creating a conducive environment for facilitating the achievement of the SDG of ending poverty, suggesting that policies aimed at fulfilling this goal should include the prerequisite of upgrading the country’s institutions.



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