AIRE Annnual Conference
10 June 2025
De-risking European supply chains
16 June 2025
By Christof SCHILLER
Climate change, geopolitical instability, technological change and sociodemographic change are testing the capacity of OECD and EU countries to innovate and adapt like never before. To what extent do they achieve sustainable policy outcomes while improving policymaking for the long term?
We conducted an analysis of the sustainability of governance arrangements in 30 OECD countries using our new edition of the Sustainable Governance Indicators. This dataset enables a systematic comparison of the progress made in implementing economic, social, and ecological sustainability across 20 key areas. Additionally, this data allows for an analysis of how internal processes and institutional structures support anticipatory governance. Moreover, by assessing the quality of democratic accountability mechanisms, it is possible to gauge the long-term viability of specific governance architectures. In total, 144 indicators can be analyzed to assess the sustainability of governance arrangements.
Our analysis reveals a troubling pattern: most OECD and EU countries are still not adequately equipped to deliver sustainable policy. They lack the institutional frameworks and long-term policy strategies needed to tackle their most pressing challenges – strengthening democratic resilience, boosting economic adaptability, crafting socially viable responses to the climate crises, and managing demographic change. In 11 of the 30 OECD countries analyzed, a fragmented mix of economic, social and environmental policies – combined with weak democratic oversight – poses a serious threat to sustainable governance. In these countries, short-term fixes and reactive policymaking dominate. Among the G7 economies, Japan, Italy, the US and Canada are at risk of losing sight of the interests of future generations.
Sweden, Denmark, Norway and Finland lead the way in sustainability-focused policymaking. These countries offer strong democratic checks and public participation opportunities, comprehensive economic, social and environmental policies, and forward-looking administrative structures.
However, when it comes to aligning national economic, social, and environmental policies with the demands of long-term sustainability, all 30 OECD countries still face major challenges:
- Designing coherent strategies for economic transformation
- Accelerating the shift to a circular economy
- Advancing mission-oriented innovation policies
- Developing an investment-oriented, forward-looking welfare state
Also the daily workings of government in many advanced economies are overdue for a structural upgrade. Key institutional reforms are needed to support more sustainable and effective governance, including:
- Breaking down ministerial silos and improving coordination across levels of government
- Increasing transparency
- Strengthening the capacity for strategic foresight and evidence-based policymaking
In Finland, for example, the Prime Minister’s Office (PMO) reviews legislative proposals on behalf of the head of government. The Finnish Council of Regulatory Impact Analysis, which reports to the PMO, evaluates proposed legislation and its expected effects. Its aim is to improve the quality of draft legislation by enhancing impact assessments and optimizing the timing and planning of new proposals.
Also in Denmark, policy design is guided by evaluations and sustainability assessments. Impact assessments for new laws are publicly available, which increases transparency. If a policy falls short of expectations, adjustments are typically made.
Why democratic governance matters
Sustainable policymaking and a healthy democracy go hand in hand. Yet even many of the world’s oldest democracies still have a long way to go before they can be considered fully functional. Key areas requiring urgent attention include:
- Strengthening the integrity of elections
- Guaranteeing unrestricted access to official information
- Building coalitions to counter anti-democratic forces
- Engaging civil society meaningfully in decision-making processes
The top performers in democratic oversight, according to SGI data, are Sweden, Norway, Denmark and Finland. SGI data highlight, for example, how Norway has successfully limited the influence of political extremism by addressing its root causes.
Where democratic institutions are under strain — due to declining trust, limited transparency or growing polarization — sustainability suffers. Without meaningful public participation and reliable oversight, governments struggle to implement necessary long-term reforms.
The comprehensive study and press materials are available here: Many advanced economies encounter challenges.
Our interactive data portal, www.sgi-network.org, grants users access to all data and enables them to perform their own analysis.
About the dataset
The SGI dataset is a comprehensive resource for tracking and comparing policy progress across 30 OECD and EU countries. It focuses on strengthening democratic oversight, developing sustainable economic, social and environmental policies, and advancing forward-looking governance. The cross-country comparison is based on 144 indicators and in-depth country reports. Each country’s performance is assessed through a rigorous, multi-stage review process conducted by an international network of experts. More than 100 scholars in economics, environmental studies, political science and the social sciences contribute to each assessment round – bringing with them a broad range of international, comparative, methodological, regional and sector-specific expertise.