Sustainable development goals and tax policy: The case of selected OECD countries

This study analyzes the role of tax policies in directing resource allocation not only in terms of revenue generation but also in economic, social, and environmental dimensions by placing sustainable development goals (SDGs) at the center of national and international policy design. While the effects on SDGs have mostly been examined using single-dimensional indicators in the literature, this research aims to fill the existing gap by addressing tax structure, education quality, and perceptions of corruption within a holistic framework. Therefore, the primary objective of this study is to evaluate the role of tax policies in achieving the SDG goals and targets through a multidimensional and empirical approach and to establish the concept of sustainable tax policy on a theoretical and analytical foundation in this context. The data set consists of 25 OECD countries selected based on institutional structure and socio-economic similarity criteria. During the analysis process, panel unit root tests (e.g., Pesaran CIPS) were applied to examine data stationarity, taking into account cross-sectional dependence; the existence of long-term relationships was investigated using the Westerlund panel cointegration test. In the estimation phase, both fixed effects panel regression models and dynamic panel methods (Arellano-Bond, Blundell-Bond system GMM) were used to control for endogeneity and dynamic interactions. Additionally, model robustness was enhanced using CCE methods to address cross-sectional dependence. The findings show that central and local tax structures have varying effects on different dimensions of SDGs depending on time and place. The quality of education and perception of corruption stand out as critical social indicators that determine the direction and magnitude of these effects. The limited or uncertain effects of some variables in the short term highlight the need for long-term, multidimensional strategies that strengthen institutional capacity for sustainable development. In particular, increasing the financial capacity of local governments and promoting institutional reforms play a decisive role in the success of SDGs. The study approaches sustainable development not only from the perspective of economic growth, but also from a holistic approach that encompasses four fundamental dimensions: social justice, environmental balance, and institutional governance. Thus, it emphasizes that development is a fair, inclusive, and long-term process. By examining the relationship between tax structures and the SDGs and their sub-goals using panel data analysis, which is rarely seen in the literature, the study adds unique value both theoretically and empirically. The assessments and policy recommendations for Turkey strengthen the practical dimension of the research.