This study intends to examine the impact of ICT diffusion, globalization, financial development, government effectiveness, and economic growth on sustainable human development (SHD) i.e., the development of human capital adjusted against the human ecological footprint, using 2005-2020 panel data of SAARC economies. The methodology involves econometric techniques robust to cross-sectional dependence (CSD) such as Pesaran’s CSD tests, second-generation unit root test, Pedroni, Kao, Westerlund cointegration tests, FMOLS, DCCE-MG, Driscoll-Kraay (DK) regression, and DH causality test. The findings of the cointegration tests demonstrate that the variables are cointegrated and have long run equilibrium relationship. The results from DCCE-MG and DK regression, indicate that ICT diffusion has a significant, favorable impact on SHD. Similarly, globalization and economic growth also have a significant positive impact on SHD. On the other hand, the impact of government effectiveness and financial development was found to be insignificant. In addition, the DH causality test results show the presence of a unidirectional causality running from ICT diffusion to SHD and globalization to SHD. A bidirectional causal link is detected between economic growth and SHD. Therefore, the study concludes that in order to resolve the undesirable consequences of environmental degradation on human development in the globalized era, it is essential for SAARC economies to tackle challenges for adequate ICT infrastructure, particularly: access and affordability. By eliminating these significant barriers to ICT access, CO2 emissions can be reduced, and human development can be sustained simultaneously.
JEL code: C23, O15, 033, O40