Fostering human development: do institutional environment quality and overall UN-SDGs attainment matter?

Purpose This study aims to uniquely combines institutional environment quality (IEQ) and United Nations Sustainable Development Goals (UNSDGs) metrics within a global panel framework to explore their individual and joint impacts on human development (HD). It offers a novel contribution by empirically testing how these two institutional dimensions interact to shape HD outcomes across 154 countries from 2002 to 2021. Design/methodology/approach Drawing on neo-institutional theory, this study uses fixed-effects panel regression, principal component analysis and dynamic panel estimation using the instrumental variable-Lewbel model. Robustness checks include alternative HD measures and distinguish between impacts in developing and developed economies. Findings Results show that both IEQ and UN-SDGs progress significantly and positively impact HD. Their joint impact is stronger than either factor alone. Key IEQ elements − such as voice and accountability, government effectiveness and control of corruption − are critical, while political stability shows a positive but statistically insignificant relationship with HD. Research limitations/implications The analysis is constrained by data availability and does not address potential reverse causality. Practical implications Policymakers, especially in developing countries, can improve HD by strengthening IEQ and aligning governance with UN-SDGs targets. Social implications Enhancing institutional governance and achieving UN-SDGs milestones can help reduce inequality, improve public trust and support long-term societal well-being. Originality/value This study presents new global empirical evidence on how IEQ and UN-SDGs jointly influence HD, with implications for both theory and policy.