Glodebtization: implications for Sustainable Development Goals

The achievement of the United Nations Sustainable Development Goals (SDGs) remains a crucial objective, particularly for developing and emerging economies. This study introduces the concept of "glodebtization," an intersection of globalization and debt, and examines its implications for the achievement of the SDGs. Using a panel dataset of 101 developing countries over 22 years (2000-2021), the study integrates the Panel-Corrected Standard Errors (PCSE), Fixed Effects (FE), and System Generalized Method of Moments (GMM) estimators to analyze the dual role of globalization in facilitating financial access while increasing debt vulnerabilities and the mediating influence of institutional quality. The findings reveal a marked heterogeneity across SDG outcomes and debt-sustainability trade-offs, where excessive external debt accumulation undermines fiscal stability and hinders SDG progress. Goal-specific analyses reveal a consistent constraint of external debt stock on poverty reduction (SDG-1), improved health (SDG-3), and education (SDG-4), while its effect on climate action (SDG 13) is neutral or positive under stronger institutional contexts. Globalization is found to exert broad developmental benefits and moderate the relationship between debt and SDG achievement, with its effects contingent on regional and institutional contexts, yet undermining environmental sustainability by intensifying carbon-intensive growth. Grants, often considered globalization-linked alternatives, demonstrate paradoxical outcomes as they weaken social SDGs but significantly improve SDG-13 performance, suggesting the need for improved aid effectiveness. Institutional quality emerges as a critical mediator that offsets the negative consequences of glodebtization, enhancing the developmental utility of external finance. These results emphasize that glodebtization's effects are goal-specific, shaped by institutional capacities, and subject to trade-offs between social development and environmental sustainability. As policy implications, the study stresses the imperative of a differentiated policy framework that integrates debt management and globalization strategies with strong institutional mechanisms and innovative financing agendas to ensure balanced progress towards the 2030 Agenda.