Prosperity with a purpose

Abstract: In the current landscape, policymakers are confronted with a formidable task: striking the delicate equilibrium between ongoing economic growth and a sustainable transition. This dilemma forces a difficult trade-off in various sectors, where the pursuit of sustainability often entails sacrifices and compromises with regard to economic growth. The intricate interplay between these two objectives underscores the complexity of the challenges faced by policymakers in charting a path forward. This study explores the interplay between sustainable development goals and economic growth in OECD member countries. Using the data throughout 2000–2021, a panel data estimation method is adopted with sophisticated econometric approaches. The findings challenge conventional wisdom and shed light on the complex relationships between economic, social, and environmental indicators. Notably, the obtained results identify a positive long-term impact when countries prioritize basic needs and services, including effective governance, social equality and empowerment, robust infrastructure, and transformative innovation. Remarkably, the analysis also uncovers a contrasting effect of natural resource conservation and management on economic growth in developed countries. These findings underscore the need for governments and associated policymakers to prioritize social development, human development, and innovation as drivers of sustainable economic growth. By doing so, policymakers can not only foster prosperity but also mitigate ecological footprints and ensure the preservation of natural resources.