Public investment in infrastructure is, once again, at the heart of the development agenda. With interest rates continuing to languish at record lows, there is growing support for increased public investment in both the developed and developing worlds to support economic growth. There has also been a shift in thinking about the role of the state in infrastructure provision in recent years. While greater support for private involvement in the provision of infrastructure services has improved operational efficiency, the levels of investment generated have fallen short of expectations. This has led to a greater recognition of the role the state might play in filling this gap.
But this is not the first wave of enthusiasm for public investment in infrastructure. Previous surges in capital spending have often led to increased levels of debt without delivering the expected returns to economic growth. There is evidence that public investment in infrastructure does not tend to be done particularly well in either developed or developing countries although the problems are often most acute where the infrastructure needs are greatest. And while increasing public investment has the potential to increase economic growth, the returns to investment depend on the quality of institutions overseeing that investment.
As international organisations look to standardise approaches to measuring public investment management, this report provides a timely stocktake of the evolution of ideas in this field and explores how international engagement around public investment management could be improved in future.