CAPABILITY TRANSFORMATION MODEL OF SUSTAINABLE DEVELOPMENT
Abstract
Sustainable development is often explained through economic growth, institutions, or productive sophistication. This paper develops the Capability Transformation Model of Sustainable Development, which conceptualizes development as the sequential transformation of Social Capacity, Political Capacity, and Economic Capacity. Using a balanced panel of 132 countries (2002–2023), with Voice and Accountability, Government Effectiveness, Economic Complexity, and Planetary-adjusted Human Development as proxies, the analysis employs System GMM, causal mediation, and structural equation modelling. Results support a significant sequential pathway linking the three capacities to sustainable development. The paper reconceptualizes structural transformation as capability transformation culminating in Ever-Flourishing Human Conditions.
Downloads
References
Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. Crown Business.
Chenery, H. B. (1960). Patterns of industrial growth. American Economic Review, 50(4), 624–654.
Evans, P. (1995). Embedded autonomy: States and industrial transformation. Princeton University Press.
Hausmann, R., Hidalgo, C. A., Bustos, S., Coscia, M., Chung, S., Jimenez, J., Simoes, A., & Yıldırım, M. A. (2014). The atlas of economic complexity: Mapping paths to prosperity. MIT Press.
Hidalgo, C. A., & Hausmann, R. (2009). The building blocks of economic complexity. Proceedings of the National Academy of Sciences, 106(26), 10570–10575. https://doi.org/10.1073/pnas.0900943106
Kuznets, S. (1966). Modern economic growth: Rate, structure, and spread. Yale University Press.
Lewis, W. A. (1954). Economic development with unlimited supplies of labour. The Manchester School, 22(2), 139–191. https://doi.org/10.1111/j.1467-9957.1954.tb00021.x
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102. https://doi.org/10.1086/261725
Sen, A. (1999). Development as freedom. Oxford University Press.
Solow, R. M. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70(1), 65–94. https://doi.org/10.2307/1884513
The authors and co-authors warrant that the article is their original work, does not infringe any copyright, and has not been published elsewhere. By submitting the article to GPH-International Journal of Business Management, the authors agree that the journal has the right to retract or remove the article in case of proven ethical misconduct.



















