## Scaling Up Quality Infrastructure Investment

_IMF Working Papers, April 30, 2021_

## Source details

**Canonical URL:** [Scaling Up Quality Infrastructure Investment](https://www.imf.org/en/publications/wp/issues/2021/04/30/scaling-up-quality-infrastructure-investment-50294)

## Other formats

- [Markdown version](/en/publications/wp/issues/2021/04/30/scaling-up-quality-infrastructure-investment-50294/index.md)
- [Structured JSON version](/en/publications/wp/issues/2021/04/30/scaling-up-quality-infrastructure-investment-50294/index.json)
- [Bundle manifest](/en/publications/wp/issues/2021/04/30/scaling-up-quality-infrastructure-investment-50294/bundle-manifest.json)

## Bibliographic details
- Authors: Olivier Bizimana, Laura Jaramillo, Saji Thomas
- Published: April 30, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513582450.001

---

### Summary findings
- South Asia needs large infrastructure investments to achieve its development goals, and public investment can also support the Covid-19 recovery.
- Regression estimates that account for the quantity and quality of investment suggest that public infrastructure was a key driver of productivity growth in South Asia.
- Going forward, higher public infrastructure spending can raise growth, but its benefits depend on how it is financed and managed.

### Model simulations and financing scenarios
- Model simulations show that:
  - Tax financing is more advantageous than government borrowing through financial markets because it supports growth while containing the impact on public debt.
  - Concessional lending is more advantageous than government borrowing through financial markets for the same reasons.
  - Private sector financing through public private partnerships (PPPs) is more advantageous than government borrowing through financial markets because it supports growth while containing the impact on public debt.
- The optimal financing choice depends on:
  - Available fiscal space.
  - Taxation capacity.
  - Implementation risks.
  - Public investment efficiency.

### Policy recommendations and fiscal risk management
- To reap the most benefits from higher infrastructure investment, South Asian countries need to:
  - Manage fiscal risks carefully, including risks from PPPs and state-owned enterprises.
  - Improve public investment efficiency.
- Emphasize the interaction between financing modality and project management: financing that contains public debt implications and is paired with high implementation efficiency yields greater growth benefits.

### Subject focus and keywords
- Subject: Capital budget, Expenditure, Infrastructure, National accounts, Public debt, Public financial management (PFM), Public investment spending
- Keywords: Asia and Pacific, Capital budget, Caribbean, efficiency gap, Infrastructure, infrastructure investment, multiyear investment planning, PPP financing, Public investment spending, quality of investment, South Asia, tax financing

*Source: "Scaling Up Quality Infrastructure Investment", IMF Working Papers 2021, 117 (April 30, 2021).*

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2021/english/wpiea2021117-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021117-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2021/04/30/scaling-up-quality-infrastructure-investment-50294_