Achieving sustainable development goals: do governance and foreign direct investment matter?

This study extends previous sustainability literature by demonstrating how good governance and foreign direct investment (FDI) promote the achievement of sustainable development goals (SDGs)—overall and their economic, social, and environmental pillars. Good governance and FDI are considered key macroeconomic and institutional determinants that shape SDGs in Sub-Saharan Africa (SSA) and the Middle East and North Africa (MENA). Using a balanced panel of 56 SSA and MENA countries from 2000 to 2022, we address cross-sectional dependence, endogeneity, and heterogeneity by employing advanced econometric techniques. The findings reveal that governance and FDI positively contribute to achieving overall and economic SDGs, while oversight has a marginally significant positive effect on social sustainability. However, governance and FDI have a positive but insignificant effect on environmental sustainability. The region-specific analysis further reveals that governance and FDI contribute marginally significant influence on SDGs progress in the SSA and MENA regions, with observed differences across countries due to the differences in institutional frameworks. The study applied several robustness analyses, confirming the validity of our main results. This study highlights valuable insights to policymakers by providing guidance on developing strategies to enhance the progress toward the achievements of the SDGs through governance reforms and investment policies.