Will FinTech Law Likely Help Countries Achieve Their Sustainable Development Goals?

Abstract

What effect will new laws regulating financial technologies (FinTech) have on sustainable development -- and particular the sustainable development goal (SDG) scores in the developing world? In this paper, we provide the first rigorous analysis of the literature predicting how FinTech might affect the SDGs. To test these effects, we use cross-country regression on a proxy of the quality/quantity of FinTech law, FinTech credit and select SDG sub-indicators which likely reflect the whole goal. We find -- if the past helps predict the future -- that FinTech legislating will have limited impact on the SDGs dealing with economic growth. New rules could have a larger impact on social and environmental outcomes, if laws and supporting public procurements are explicitly written with such outcomes in mind. In either case, government will still likely play a determining role. FinTech policy will likely exhibit the same U-shaped effect on sustainable development as other policies and practices dealing with the accumulation of capital. If the slate of SDG-related laws in the US in 2021/2022 risk doing too little, the EU’s buffet of sustainable finance law risks doing too much. We look at these laws in light of our findings.