In countries with a program-based budgeting system, one possible way forward would be to introduce a budget classification that groups and then bridges programs with the SDGs. However, such an approach is not ideal. A better solution might be for an international organization (e.g., UNSTATS) to design a universal SDG budget classification, and propose a methodology for mapping this system with other classifications. The advantages of such an approach are as follows:
- A single and comprehensive SDG classification would help developing countries avoid the sporadic introduction of standalone budget tagging systems that have already been applied in areas such as gender budgets (in more than 30 countries); low emissions (Indonesia); climate change (Bangladesh, Indonesia, Nepal, and the Philippines); and poverty or disaster risk reduction. The introduction of a single budget coding that captures these policy areas and others covered by the SDGs would cost less and be more sustainable. The UNDP is considering the possibility of developing a budget code structure that incorporates all the SDGs, and piloting it in selected countries.
- Application of the SDG classification through the chart of accounts would allow automatic presentation of budget allocations linked to SDG goals. It would eventually enable regular budget planning and reporting by direct incorporation of SDG policy targets, and the 169 related indicators, into budget programs.
- A universal classification would allow cross-country comparison of SDG-related budgets.
- An SDG budget classification could potentially contribute to a new evolving phenomenon – cross-country policies that go beyond national borders, e.g., on climate change and the environment, defence, poverty and migration. Cross-border SDG targets would require strong cooperation among countries and their finance ministries, and might be appropriate in economic unions that exist or are developing in Europe, Africa and elsewhere (e.g., the EU response on migration).
Of course, there would be challenges in introducing a universal SDG classification, such as resource constraints, potential overcrowding of budget databases, and the tendency for international organizations and donors to dominate the policy agenda. The introduction of SDG classification is a long journey and its first step might be some basic SDG budget table configured manually. In any case, the sooner the debate starts, the better the solutions that will be found.
[1] Governance and Public Finance Specialist, UNDP, Bangkok Regional Hub. The content of this article does not necessarily reflect the official opinion of the UNDP.
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