Investing Together

Working Effectively across Levels of Government

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Why 'investing together'? Public investment is not only a major strategic responsibility for governments but also a shared one: almost two-thirds of public investment is undertaken by sub-national governments and major projects tend to involve more than one government level. In a tight fiscal landscape, improving the efficiency and effectiveness of investment, while maximising its impact on growth outcomes, is paramount. Identifying and addressing the governance bottlenecks that impede smooth co-ordination across levels of government can make a significant contribution towards reaching that end.

This report dissects the relationships different government actors form vertically, across levels of government, and also horizontally, across both sectors and jurisdictions. It helps policy makers to understand more systematically how co-ordination works and why it so often doesn’t, as well as shedding light on the mechanisms countries have developed to govern these interactions. In doing so, it addresses another key requisite to organising co-ordination, namely government capacity. Sub-national actors, especially, need to be equipped with the right skills and resources to carry out their responsibilities and to engage with stakeholders, across the public, private and civil society sectors. This report offers a toolkit to policy makers to assess their needs for capacity development

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Co-ordinating investments across levels of government

The financing and implementation of public investment is embedded in a complex set of vertical (across levels of government) and horizontal (across sectors and across the same levels of government) interdependences, which require substantial co-ordination among actors to ensure policy alignment and quality investments. This chapter extends the analysis of the previously identified multi-level governance gaps for co-ordination of public investment by systematically investigating the extent to which they are present across OECD countries and the solutions that have been found to address them. It also examines an encompassing instrument that is used to address multiple co-ordination challenges simultaneously, namely inter-governmental contracts. Finally, the chapter identifies policy lessons that emerge from the analysis of these issues and which may assist governments seeking to improve the quality and efficiency of investments.

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