## Public Investment Management Bottlenecks in Low-income Countries

_IMF Working Papers, November 1, 2024_

## Source details

**Canonical URL:** [Public Investment Management Bottlenecks in Low-income Countries](https://www.imf.org/en/publications/wp/issues/2024/11/01/public-investment-management-bottlenecks-in-low-income-countries-556847)

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## Bibliographic details
- Authors: Khaled Eltokhy, Nicoletta Feruglio, Kezhou Miao, Arturo Navarro, Eivind Tandberg
- Published: November 1, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400289231.001

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### Summary
- This paper uses principal component analysis (PCA) to identify bottlenecks to effective public investment management in LIDCs.
- The paper describes the current state of affairs regarding public investment and public investment management in LIDCs, drawing on the results of IMF Public Investment Management Assessments (PIMAs).
- PCA is used to analyze which public investment institutions are likely to be most important for investment efficiency estimates across the countries covered by PIMAs so far.
- Five PIMA institutions are identified as systematically highly correlated to estimates of public investment efficiency in LIDCs and are likely to be high priorities in many PIM reform processes:
  - Project management
  - Project appraisal
  - Procurement
  - Availability of funding
  - Project selection
- The paper notes that these five are not the only important institutions and that priorities will depend on country circumstances.
- Practical steps to strengthen PIM in LIDCs are elaborated in a separate How-to-Note.

### Methodology and Findings
- Methodology:
  - Principal component analysis (PCA) is used to analyze relationships between PIMA institutional indicators and estimates of public investment efficiency across countries covered by PIMAs.
  - Analysis draws on alternative input data to assess robustness of results.
- Core finding:
  - Five PIMA institutions (Project management; Project appraisal; Procurement; Availability of funding; Project selection) are systematically highly correlated with public investment efficiency estimates in LIDCs.
- Contextual note:
  - The relative importance of PIMA institutions can vary depending on country circumstances; the five identified are likely high priorities in many, but not all, reform processes.

### Policy Implications and Practical Steps
- Priority areas for PIM reform in many LIDCs:
  - Strengthen Project management capacities.
  - Improve Project appraisal frameworks and practices.
  - Reform and enhance Procurement systems.
  - Ensure Availability of funding for prioritized projects.
  - Improve Project selection mechanisms to focus on efficiency.
- Implementation guidance:
  - Practical steps to strengthen PIM in LIDCs are provided in a separate How-to-Note (details of that How-to-Note are described in the paper but are not reproduced here).

### Subject Coverage and Keywords
- Subject areas:
  - Expenditure
  - Infrastructure
  - National accounts
  - Post-clearance customs audit
  - Public financial management (PFM)
  - Public Investment Management Assessment (PIMA)
  - Public investment spending
  - Revenue administration
- Keywords include:
  - efficiency frontier
  - Global
  - IMF Public Investment Management Assessments
  - Infrastructure
  - investment efficiency
  - Low Income countries
  - management in LIDCs
  - Post-clearance customs audit
  - priority Pima institution
  - Public Financial Management
  - Public Investment Efficiency
  - Public Investment Management
  - Public Investment Management Assessment
  - Public investment spending
  - West Africa

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## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2024/english/wpiea2024232-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2024/english/wpiea2024232-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2024/11/01/public-investment-management-bottlenecks-in-low-income-countries-556847_