Balancing national economic policy outcomes for sustainable development

Abstract

The 2030 Sustainable Development Goals (SDGs) aim at jointly improving economic, social, and environmental outcomes for human prosperity and planetary health. However, designing national economic policies that support advancement across multiple Sustainable Development Goals is hindered by the complexities of multi-sector economies and often conflicting policies. To address this, we introduce a national-scale design framework that can enable policymakers to sift through complex, non-linear, multi-sector policy spaces to identify efficient policy portfolios that balance economic, social, and environmental goals. The framework combines economy-wide sustainability simulation and artificial intelligence-driven multiobjective, multi-SDG policy search and machine learning. The framework can support multi-sector, multi-actor policy deliberation to screen efficient policy portfolios. We demonstrate the utility of the framework for a case study of Egypt by identifying policy portfolios that achieve efficient mixes of poverty and inequality reduction, economic growth, and climate change mitigation. The results show that integrated policy strategies can help achieve sustainable development while balancing adverse economic, social, and political impacts of reforms.

Fig. 1. National economic policy design and screening framework for sustainable development.

The framework includes three sub-processes: (1) identification of priorities aligned with the SDGs and associated policy instruments, (2) economy-wide simulation, artificial intelligence-driven multiobjective multi-SDG policy search, and machine learning of sustainability drivers, and (3) multi-sector, multi-actor policy screening and deliberation.

Fig. 2. Sustainability performance of the Egyptian economy in 2021–2035.

a parallel coordinates plot of the best-achievable aggregate performance based on four integrated policy strategies, b–f details of the economic policy portfolios associated with the five thick lines highlighted in panel (a), g Sankey diagram of the structure of household income and expenditure in 2035 with the baseline economic portfolio, and h Sankey diagram of the structure of household incomes and expenditures in 2035 in the low Gini economic portfolio. The thin lines in panel a represent all efficient portfolio options, while the thick lines highlight selected policy portfolios. The upward direction on each axis in panel (a) is desirable (i.e., a perfect policy would be a straight line across the top), and diagonal lines between axes indicate trade-offs. Supplementary Fig. 7 depicts a version of panel a with the efficient policy portfolios shown separately for each of the four integrated policy strategies. The number of economic policy portfolios (or lines) in panel (a) is 19723. The line and bar colors in panels (b) and (c) correspond to the thick lines with similar colors in panel (a) (i.e., selected economic policy portfolios). The Sankey diagrams in panels (g) and (h) show household income by source (left-most axis), recipient household group (two central axes), and expenditure (right-most axis). The boxes drawn around panels (g) and (h) correspond to the thick lines with similar colors in panel (a). The total gross domestic product (GDP) and household income values in panel (a) are discounted at 3%. CO₂ stands for carbon dioxide; Q1–Q5 are household classes based on income quintiles from poorest to richest.

Fig. 3. Temporal evolution of Egyptian sustainability performance indicators.

a–o time series of sustainability indicators based on five economic policy portfolios. The time series depicted in this figure correspond to the thick lines with similar colors in Fig. 2a. Details on the economic policy portfolios associated with the time series are provided in Fig. 2b–f and Supplementary Table 1. GDP stands for gross domestic product and CO₂ stands for carbon dioxide.

Fig. 4. Rankings of policy instruments based on their relative influence on twelve Egyptian sustainability performance indicators.

a–l the five most influential instruments for each sustainability performance indicator. m the overall relative influence of each policy instrument on the twelve sustainability performance indicators. The relative influence values shown on the x-axes of panels (a–l) vary from zero to one. A zero value means the policy instrument does not influence the performance indicator, whereas one indicates that the policy instrument is the only influencer of the performance indicator. For each performance indicator, the sum of the relative influence values for all instruments is one. Panel (m) shows the sum of the relative influence values for each of the twelve policy instruments multiplied by a hundred and plotted on a logarithmic scale. Therefore, the values in panel (m) can range from zero to twelve hundred, with zero indicating that the instrument does not influence any of the twelve performance indicators, and twelve hundred meaning that the policy instrument is the only influencer of all twelve performance indicators. GDP stands for gross domestic product, CO₂ stands for carbon dioxide, and Q1 to Q5 are household classes based on income quintiles from poorest to richest.