In a great number of countries, subnational government (SNG) direct investment was particularly robust in the early years of the global financial crisis due to the involvement of SNG in stimulus plans and strong support from national governments. However, the deepening of the social and economic crisis as well as the adoption from 2010 onwards of national and local budget consolidation measures in response to the public finance crisis put severe strain on subnational governments’ finance. It ultimately led to a strong decline in investments across OECD countries. Between 2007 and 2012, SNG direct investment per capita contracted sharply in the OECD area (-7% in real terms between 2007-2012 and -15% in the three most recent years), in particular in Ireland, Iceland, Spain, Italy and Portugal ().