Ms Dorothée Allain-Dupré, OECD

1. EFFECTIVE PUBLIC INVESTMENT ACROSS
LEVELS OF GOVERNMENT
Dorothée Allain-Dupré
Head of Unit, Decentralisation, Public Investment and Subnational Finance
OECD Centre for Entrepreneurship, SMEs, Regions and Cities
Water Governance Iniative Meeting
OECD - 9 January 2020

2. 2
Subnational public investment in Brazil
and OECD countries
Source: OECD/UCLG Observatory

3. 3
Coordination across levels of government & jurisdictions
 Mismatch between local/regional needs and those given priority at
central level (84%).
 Absence of a joint investment strategy with neighbouring
cities/regions (76%)
 Lack of incentives (such as financial incentives) to cooperate
across jurisdictions
Designing and planning infrastructure in a long-term perspective
 Lack of capacity to design long-term public investment strategies
(65% SNGs)
 Lack of sufficient in-house expertise to design infrastructure
projects (56%)
 Lack of coordination across sectors
Red tape and regulatory burden
 A large majority of respondents (90%) consider excessive
administrative procedures, lengthy procurement and red tape as a
challenge
Governance challenges across levels of government
are major obstacles for effective public investment
OECD/EU survey with 255 subnational governments
Typical problems reported by subnational governments in 255 EU subnational governments

4. 4
OECD Recommendation on Effective Public Investment
across Levels of Government
Principles for Action: Effective Public Investment
across Levels of Government
Toolkit and implementation brochure
https://www.oecd.org/effective-public-investment-toolkit/

5. Countries are increasingly co-ordinating public investment vertically
Implementation: vertical coordination in action
• Co-financing arrangements as well as platforms for regular inter-governmental dialogue are
two of the most popular governance instruments used by countries to co-ordinate interests
vertically
• 18 countries have regular inter-governmental dialogue through platforms of coordination
• In federal countries, large use of formal platforms of co-ordination.
• 14 countries has introduced contractual arrangement (contracts, partnerships) for public investment
across levels of government since 2014

6. Countries are increasingly co-ordinating public investment horizontally
• Several OECD countries have recently enacted regulations to encourage horizontal
collaboration
• 16 countries have Specific incentives to foster co-operation across municipalities.
• Adherents are increasingly fostering co-operation across regions, provinces or states
• Co-operation has been particularly encouraged at the metropolitan level (Chile, France,
Italy, among others)
Horizontal coordination across jurisdiction for
public investment

7. Empirical work from the OECD has showed that:
• Decentralising (infrastructure) investment is positive when
accompanied by coordination arrangements (OECD, 2016)
• Improved subnational governance of public investment
results in better outcomes, notably for EU funds
• Across the various dimensions of governance that matters
for infrastructure, appropriate planning and management,
coordination across different government levels appear to
be particularly relevant for productivity outcomes (OECD,
2019)
7
Improved vertical and horizontal coordination
matter for public investment outcomes and
productivity

8. World Observatory on Subnational Government
Finance and Investment (SNG-WOFI)
• Website
• Visualised and interactive database
• The latest 2019 analysis report
• Country profiles for over 120 countries
www.sng-wofi.org

9. Country profile: Subnational public finance in
Brazil (www.sng-wofi.org)

10. 10
OECD Framework on the Governance of
Infrastructure
1. Develop a long-term strategic vision for infrastructure
2. Guard fiscal sustainability, affordability, and value-for-money
3. Ensure efficient and effective procurement of infrastructure projects
4. Ensure systematic and effective stakeholder engagement
5. Co-ordinate infrastructure policy across levels of government
6. Promote a legitimate, coherent, efficient, and predictable regulatory framework
7. Implement a whole of government approach to manage threats to integrity
8. Make use of evidence informed infrastructure decision making
9. Make sure the asset performs throughout its life
10. Strengthen critical infrastructure resilience
Source: OECD (2019) Updated Framework on the Governance of Infrastructure framework

11. THANK YOU!
https://www.oecd.org/cfe/regional-
policy/multi-level-governance.htm
www.sng-wofi.org
Dorothee.Allain-dupre@oecd.org