Review of public investment management performance in an economic crisis: how can we measure this performance and what are the most conducive institutional arrangements for investment management?

Abstract

This Paper reviews how and why various countries are seeking to boost their public investment management performance in response to the current economic downturn. The Paper focuses on the potential roles for public investment management in the current downturn, including: (i) scaling-up investment spending i.e. simply doing more; (ii) selecting investments that are likely to be most effective in terms of stimulating the economy or protecting particular social/vulnerable groups; (iii) helping to accelerate investments by reducing the time between conception to implementation; and (iv) other improvements in the general quality of investment spending (i.e., reducing waste or enhancing efficiency and effectiveness).

The paper firstly considers why governments are trying to boost investment spending in response to the current economic downturn, in contrast to many previous such recessions. The Paper briefly describes the types of investment spending that might best be undertaken to combat a large economic downturn (i.e. what gives the biggest value for money in terms of stimulus and/or social protection?). It then examines how we might know that we are getting more high quality investments (i.e., how can we measure the performance of public investment management?). Finally, the paper looks at the different institutional arrangements, systems, procedures, capacity and managerial arrangements that may be introduced to help promote efficient public investment to combat the crisis and seeks to identify some lessons can be drawn from country experience in terms of strengthening these features, considering the urgency presented by the current economic situation.