This report investigates how to maximize the impact of public investment amidst stringent fiscal conditions. Given that sub-national governments are responsible for over two-thirds of capital investment in OECD countries, their role in national stimulus packages during the global crisis was paramount. The report examines the effectiveness of public investment recovery strategies, focusing on intergovernmental arrangements for designing and implementing investment mixes, and highlights good practices and lessons learned from eight country case studies: Australia, Canada, France, Germany, Korea, Spain, Sweden, and the United States. As fiscal consolidation becomes a priority, the report emphasizes the crucial need for better prioritization and efficient utilization of reduced public investment for sustainable growth.

The report addresses the critical question of optimizing public investment within current fiscal constraints, a topic of significant relevance for sub-national governments. It draws on extensive case studies from eight OECD countries to illustrate effective strategies and highlight lessons learned. The analysis emphasizes the importance of intergovernmental coordination in designing and implementing investment plans, particularly as many nations shift towards fiscal consolidation. The findings are geared towards informing policy decisions on prioritizing and maximizing the impact of public investment for long-term sustainable growth.