## How Strong Infrastructure Governance Can End Waste in Public Investment

_IMF Blog, September 3, 2020_

## Source details

**Canonical URL:** [How Strong Infrastructure Governance Can End Waste in Public Investment](https://www.imf.org/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment)

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## Bibliographic details
- Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Genevive Verdier
- Published: September 3, 2020

---

### Overview and context
- Authors: Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier
- Date: September 3, 2020
- Context: COVID-19 has had a profound impact on people, firms, and economies worldwide; public infrastructure investment will play a key role in recovery but resources are tight and must be spent wisely through good infrastructure governance.

### Key findings and statistics
- Countries waste on average about 1/3 of their infrastructure spending due to inefficiencies.
- The loss can surpass a staggering 50 percent in low-income countries.
- Estimates show that over half of these losses could be made up through better infrastructure governance.
- The IMF’s Public Investment Management Assessments have been carried out in more than 60 countries.

### Why strong infrastructure governance matters
- Public investment projects tend to be large, long-term, and complex—creating fertile ground for corruption, delays, and cost overruns when governance is weak.
- Well-designed and well-implemented public infrastructure can:
  - Stimulate weak aggregate demand.
  - Help boost more inclusive growth.
  - Reduce inequalities.
  - Create economic opportunities.
  - Improve resilience to climate change and future pandemics.
- Investment priorities highlighted: health systems, digital infrastructure, environmentally-conscious infrastructure, and maintenance of aging infrastructure in advanced economies (roads, bridges, healthcare systems).

### Practical areas for reform and policy actions
- Strengthen institutions and frameworks to plan, allocate, and implement quality public infrastructure.
- Control corruption in infrastructure projects.
- Mitigate and manage fiscal risks associated with public investment.
- Integrate planning and budgeting across the public investment cycle.
- Adopt sound practices early in the public investment cycle, particularly during project appraisal and selection.
- Maintain and manage public infrastructure assets to avoid deterioration in public asset value.
- Build resilience against climate change in infrastructure planning and asset management.
- Focus not only on having well-designed frameworks but also on ensuring they function effectively in practice.

### Illustrative country practices
- Chile: developed a comprehensive infrastructure governance system that has generated cost-savings.
- Korea: a national one-stop shop for public procurement has improved transparency and integrity in public procurement.
- South Africa: established guidelines and standards for the maintenance of public infrastructure to avoid deterioration of assets like roads and bridges.

### Vision for recovery
- The economic recovery from COVID-19 presents an opportunity to “build a bridge to the future” through quality public infrastructure that yields economic and social dividends.
- Emphasis: when spending more on infrastructure, countries need to “spend better and smarter” so every dollar counts.

### Forward-looking note
- The October 2020 Fiscal Monitor will include more of the IMF’s analysis and policy advice on how countries can best invest in infrastructure to build a sustainable economy and recovery.

*How Strong Infrastructure Governance Can End Waste in Public Investment — Gerd Schwartz, Manal Fouad, Torben Hansen, Geneviève Verdier, September 3, 2020*

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## References

- [عربي](https://www.imf.org/ar/News/Articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment)
- [,](https://blog-dialogoafondo.imf.org/?p=13908)
- [日本語](https://www.imf.org/ja/News/Articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment)
- [public lifelines](https://blogs.imf.org/2020/04/15/fiscal-policies-to-contain-the-damage-from-covid-19/)
- [recovery](https://blogs.imf.org/2020/05/06/fiscal-policies-for-the-recovery-from-covid-19/)
- [new book](https://elibrary.imf.org/view/IMF071/28328-9781513511818/28328-9781513511818/28328-9781513511818.xml)
- [climate change](https://www.imf.org/en/Topics/climate-change)
- [Public Investment Management Assessments](https://www.imf.org/external/np/fad/publicinvestment/)

_Source: https://www.imf.org/en/blogs/articles/2020/09/03/blog090320-how-strong-infrastructure-governance-can-end-waste-in-public-investment_