Investment growth in many emerging market and developing economies (EMDEs) has slowed sharply since 2010. Investment growth performance has varied significantly across different regions, however. This paper examines the evolution of investment growth in six EMDE regions, documents remaining investment needs, especially for infrastructure, and presents a set of region-specific policy responses to address these needs. It reports three main findings. First, investment growth has been particularly weak in EMDE regions hosting a large number of commodity exporters. In regions with a substantial number of commodity-importing economies, investment growth has been somewhat resilient but has also declined steadily since 2010. Second, sizable investment needs remain in most EMDE regions to make room for expanding economic activity and rapid urbanization. A large portion of these investment needs is in infrastructure and human capital. Finally, while specific policy priorities vary across regions, several policy options to address remaining investment needs apply universally. These include more, and more efficient, public investment and measures to improve overall growth prospects and the business climate. Improved project selection and monitoring, as well as better governance, may enhance the efficiency and benefits from public investment.

Public-Private Partnerships (PPPs) can be an effective way of delivering infrastructure. However, achieving value for money can be difficult if government agencies are not equipped to manage them effectively. Experience from OECD countries shows that the availability of finance is not the main obstacle in delivering infrastructure. Governance—effective decision-making—is the most influential aspect on the quality of an investment, including PPP investments. In 2012, the OECD together with its member countries developed principles to ensure that PPPs deliver value for money transparently and prudently, supported by the right institutional capacities and processes to harness the upside of PPPs without jeopardizing fiscal sustainability. Survey results from OECD countries show that some dimensions of the recommended practices are well applied and past and ongoing reforms show progress. However, other principles have not been well implemented, reflecting the continuing need for improving public governance of PPPs across countries.

Public-Private Partnerships (PPPs) are mostly presented as a means to introduce efficient procurement methods and better value for money to taxpayers. However, the complexity of the PPP mechanism, their lack of transparency, accounting rules and implicit liabilities make it often impossible to perceive the amount of public expenditure involved and the long-run impact on taxpayers, providing room for fiscal illusion, i.e., the illusion that PPPs are much less expensive than traditional public investments. This psaper, thanks to a systematic review of the literature on the EU countries experience, tries to unveil the sources of this illusion by looking at the reasons behind the PPPs’ choice, their real costs, and the sources of fiscal risks. The literature suggests that PPPs are more costly than public funding, especially when contingent liabilities are not taken into account, and are employed as mechanisms to circumvent budgetary restrictions and to spend off-balance. The paper concludes that the public sector should share more risks with private sectors by reducing the amount of guarantees, and should prevent governments from operating through a sleight of hand that deflects attention away from off-balance financing, by applying a neutral fiscal recording system.

COVID-19 has amplified existing imbalances, institutional and financing constraints associated with a development strategy that did not take sufficient account of challenges with emissions, environmental damage and health risks associated with climate change in a number of countries, including China. The recovery from the pandemic can be combined with appropriately designed investments that take into account human, social, natural and physical capital, as well as distributional objectives, that can also address commitments under the Paris agreement. An important criterion for sustainable development is that the tax regimes at the national and sub-national levels should reflect the same criteria as the investment strategy. Own-source revenues, are essential to be able to access private financing, including local government bonds and PPPs in a sustainable manner. Governance criteria are also important including information on the buildup of liabilities at all levels of government, to ensure transparent governance.
Despite differences in political systems, the Chinese experiences are relevant in a wide range of emerging market countries as the measures utilize institutions and policies reflecting international best practices, including modern tax administrations for the VAT, and income taxes, and benefit-linked property taxes, as well as utilization of balance sheets information consistent with the IMF’s Government Financial Statistics Manual, 2014. The options have significant implications for policy advice and development cooperation for meeting global climate change goals while ensuring sustainable employment generation with transparency and accountability.

The present study aimed to determine the dynamic relationship between good governance, fiscal policy, and economic growth in Oman. In the context of the current study, researchers chose a quantitative approach to answer the research questions, utilizing the latest 2023 data from the World Bank and The Global Economy databases. The data for the current study was carefully selected using variables that represent aspects of governance, fiscal policies, and economic performance. Our analysis uses Ordinary Least Squares (OLS) regression and the Autoregressive Distributed Lag (ARDL) Model. These methods help us understand these factors’ immediate and long-term impacts on Oman’s economy. The results we obtained offer fascinating insights into the country’s economic dynamics. We observe bidirectional causal relationships between the Good Governance Index (GGI) and the Regulatory Quality Index (RQI) and economic growth, while Fiscal Policy Effectiveness (FPE), Government Efficiency Index (GEI), and the Rule of Law Index (RLI) exhibit unidirectional causality towards GDP. Budget Balance (BB) shows no causal relationship with GDP, implying external factors influence it. Additionally, moderation analysis underscores the significance of digital financial inclusion in amplifying the effects of governance and fiscal policies on economic growth. These findings hold practical implications for policymakers and stakeholders in Oman. Specifically, they highlight the importance of governance, regulatory quality, and effective fiscal policies in shaping the economic landscape. To foster sustainable economic development, efforts should improve governance, enhance fiscal policy effectiveness, and promote digital financial inclusion.