How To Assess Spending Needs of the Sustainable Development Goals

Abstract

This note contains a technical overview and description of the third edition of the IMF Sustainable Development Goal (SDG) costing tool that estimates the additional spending needs to achieve a strong performance in selected SDGs for human capital development (health and education) and physical capital development (infrastructure)—in particular, water and sanitation, electricity, and roads. The World Bank and UNICEF developed the water and sanitation tool; the IMF formatted and structured it for ease of use and updated its underlying general variables. The Expenditure Policy Division of the IMF’s Fiscal Affairs Department developed the other four tools. This note focuses on the third edition, or vintage, of the tools, completed in late 2022. The first edition was finalized in 2018 and is reflected in analysis published in January 2019 in Gaspar and others (2019), which also contains the key outlines of the SDG costing methodology. The second vintage, completed in August 2019, was the basis on which a training session was provided and made open to all IMF staff. 1