Executive summary

The 2030 Agenda requires transitioning from policy coherence for development (PCD) to policy coherence for sustainable development (PCSD)

With the adoption of the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda, all UN Members – including OECD countries – have committed to “pursue policy coherence and an enabling environment for sustainable development at all levels and by all actors”. The Sustainable Development Goals (SDGs) include a target (17:14) on the means of implementation to “enhance policy coherence for sustainable development” (PCSD).

Enhancing policy coherence is a persistent challenge of international development as well as of effective governance. Governments – mainly the members of the OECD’s Development Assistance Committee (DAC) – have sought to meet that challenge by setting up institutional mechanisms and processes to harmonise and manage often competing policy objectives and interests. These mechanisms, which are known as the “PCD building blocks” include: i) political commitment and policy statements that can help translate commitment into action; ii) policy co-ordination that can resolve conflicts or inconsistencies between policies; and iii) systems for monitoring, analysis and reporting on the impacts of policies to provide evidence to inform decision-making. The purpose of these mechanisms is to make sure that domestic and foreign policies support, or at least do not undermine, the development aspirations of developing countries.

After more than two decades of promoting policy coherence for development, however, it is increasingly clear that institutional mechanisms for PCD are just a starting point. While they will continue to be relevant in the context of the SDGs, they need to be reconfigured to respond effectively to the vision and needs of the new agenda. This will include mechanisms that: i) fully engage the whole government beyond foreign affairs, development ministries and aid agencies; ii) have the mandate and capacity to manage the diverse interactions between sectoral policies – policy tensions, trade-offs and synergies – and between domestic and international policies; iii) ensure a more systematic consideration of the effects of policies ex ante, during and ex post; iv) involve key stakeholders particularly CSOs and the private sector; and v) mobilise the national installed capacity for strengthening monitoring and reporting systems.

The OECD has developed a new analytical framework to support the transition from PCD to PCSD

Transitioning from PCD to PCSD and from the Millennium Development Goals (MDGs) to the SDGs calls for updating current approaches to promote policy coherence, and making sure that existing institutional mechanisms are “fit for purpose” for the implementation of the 2030 Agenda. The new Framework for Policy Coherence for Sustainable Development (“the PCSD Framework”) introduces the concept of PCSD and provides guidance on how to analyse, apply and track progress on PCSD. It aims to support any government – both in OECD members and partner countries – interested in adapting its institutional mechanisms, processes and practices to enhance policy coherence. Specifically, the PCSD Framework provides general guidance and a screening tool (checklist) for:

  • Conducting analysis to identify policy coherence issues, and improve understanding on the interactions among SDGs and targets and their implications, and how certain policy actions might support or hinder the achievement of the goals and targets (Analytical framework).

  • Aligning existing institutional mechanisms for policy coherence to the needs and vision of the 2030 Agenda for Sustainable Development (Institutional framework).

  • Considering key elements for tracking progress on PCSD, with the aim of contributing to national efforts to monitor and report progress on SDG target 17.14 to “enhance policy coherence for sustainable development” (Monitoring framework).

Recognising that the PCSD Framework can provide governments with an important tool for developing national strategies for enhancing policy coherence, and for achieving the SDGs, it forms part of the OECD’s strategic response to the SDGs.

Applying the “PCSD Framework” to global food security, illicit financial flows, and green growth can support governments to identify synergies and trade-offs

The 2012 OECD Strategy on Development identified food security, illicit financial flows, and green growth as priority areas for the Organisation’s work on policy coherence. It called for more evidence-based analyses on the costs of incoherent policies and the benefits of more coherent policies, and advocated for more integrated approaches to policy making. Consequently, this report applies the PCSD Framework to these three areas, with the aim of supporting national efforts to design and implement coherent policies for achieving the SDGs. The three thematic modules provide checklists of open-ended self-screening questions that can help them to:

  • Recognise contextual factors: create enabling conditions and remove or minimise systemic conditions.

  • Ensure coherence of actions at and between different levels of government: vertical coherence.

  • Consider critical interactions across economic, social and environmental areas: horizontal coherence

  • Identify diverse sources of finance: ensure complementarities between them.

  • Assess the impact of policies: reform or remove policies that create negative spill-over effects.

  • Track progress in policy coherence for sustainable development.

The application of a policy coherence lens to global food security shows that the main challenge of ensuring food security is to raise the incomes of the poor, and that both agricultural development and rural diversification are needed to foster economic growth and job opportunities. Increased productivity to close the yield gap between advanced and developing countries will require large increases in investment, including from the private sector and farmers themselves. Trade will also have an increasingly important role to play in ensuring global food security.

The SDGs recognise that food insecurity can affect all countries through many different channels. Yet, the specific policy responses to food security challenges will vary between countries due to different national contexts, such as income level, trade openness, and geography and climate. Ensuring food security also calls for a coherent approach among stakeholders at local, national, regional and international levels. Breaking down the silos that separate policy sectors is a key challenge in overcoming inconsistencies and promoting cross-sectoral synergies for achieving food security. The PCSD Framework address these aspects in a flexible and simple manner, aiming to guide coherent policy making and implementation.

Combating illicit financial flows (IFFs) is another major challenge for all governments, and an increasingly important priority for the international community. IFFs are a significant barrier to sustainable development, and to the implementation of the SDGs. Money lost each year through IFFs are estimated to far exceed Official Development Assistance (ODA). These flows strip resources that could finance much needed public services, such as health care, education, and other vital elements of sustainable development.

IFFs stem from corruption, crime, terrorism, and tax evasion; and use channels ranging in sophistication from cash smuggling and remittance transfers, to trade finance and shell companies. The cross-cutting nature of IFFs requires policymakers and other stakeholders to have a more strategic overview of IFFs. They must assess the potential trade-offs and synergies in an inter-disciplinary manner, better inform policy making upstream, and help government actors to take more effective action. The PCSD Framework can support policy makers in their efforts by offering a self-screening tool to help them plan for, avoid, and resolve the most significant trade-offs or policy inconsistencies and apply existing international standards in a coherent and effective way. It can also raise awareness of the relevance of IFFs to achieving the SDGs, particularly target 16.4 which calls on countries to “significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organised crime” by 2030.

Finally, without shifting towards a sustainable growth path, the impact on natural resources and the ecosystem services on which human wellbeing depends will be colossal and risks undermining any progress made in other areas. Green growth policies will therefore need to play a key role in incorporating the sustainability dimensions into economic policy making. They can unlock new and sustainable sources of growth through improvements in productivity and innovation, create new markets through changes in demand, and create greater investor confidence through a predictable government approach to green growth.

This impetus is propelled further by the 2030 Agenda for Sustainable Development, which attempts to move beyond the single-goal vision of economic expansion and incorporate a multitude of other targets into a more coherent and sustainable idea of human wellbeing. To promote green growth – and achieve the SDGs – a much better understanding of the opportunities and trade-offs between environmental and economic policies is instrumental. If governments do not have a clear grasp of the economic opportunities created by environmental preservation – or the potential feedback of environmental damages on economic growth – they will struggle to align economic and environmental priorities for green growth. The PCSD Framework can facilitate this alignment.

Tracking progress in PCSD (SDG target 17.14) requires going beyond institutional mechanisms

The PCSD Framework suggests that tracking progress in PCSD will require consideration of three key elements: i) institutional mechanisms; ii) policy interactions, including contextual factors; and iii) policy effects. This broader approach can be used to assess the extent to which domestic policies are aligned with international sustainable development objectives and contribute to the achievement of the SDGs.

Notably, identifying and understanding the different types of interactions between the SDGs and their respective targets will help policy makers to maximise synergies and exploit win-wins (pursuing multiple objectives at the same time); avoid potential policy conflicts (pursuing one policy objective without undermining others); manage trade-offs (minimising negative impacts on other policy objectives); and ultimately design policies that generate co-benefits for sustainable development. OECD data and indicators, policy instruments, and dialogue platforms can inform this process and support national monitoring efforts. A long-term objective could be to create an online “OECD Coherence Monitor” whereby users can choose from among a menu of indicators and track progress based on their specific national interests and priorities.

As part of the global monitoring framework, in turn, an indicator to track progress on SDG 17.14 has been agreed by the UN Statistical Commission. This indicator (17.14.1) aims to capture the “Number of countries with mechanisms in place to enhance policy coherence for sustainable development”.

Going forward, countries can enhance policy coherence further by aligning their national strategies with the 2030 Agenda and applying integrated policy approaches

National approaches for implementing the 2030 Agenda and the SDGs vary between countries. The 2016 edition of Better Policies for Sustainable Development concludes with an overview of 18 countries’ initial efforts to “nationalise” the agenda and adapt it to their own country context and priorities. It shows that most of them have begun to align their existing national sustainable development strategies, as well as their development co-operation policies, with the new agenda. Several countries are also conducting gap analyses or mapping exercises of their national strategies vis-à-vis the 2030 Agenda in order to identify where action is needed.

Institutional settings and co-ordination mechanisms for SDG implementation are being updated too. Some countries have created designated interministerial working groups for this purpose; others are using existing oversight units, which tend to be located at the centre of government, ensuring a whole-of-government approach and strategic planning. With regard to monitoring and reporting, most countries rely on the active involvement of their national statistics offices. Finally, all countries are making efforts to involve non-government stakeholders, such as civil society and non-governmental organisations, the private sector, philanthropists, academia and local interest groups.