Infrastructure Investment, Private Finance, and Institutional Investors
Governments everywhere face a daunting paradox. On the one hand, they operate in an increasingly complex environment and must deliver on an expanded set of policy objectives. In a world characterized by macroeconomic uncertainty, rapid social change, and technological innovation, citizens’ expectations of what government ought to deliver are rising. Against this backdrop, not only must governments do more with less; they must do so in highly visible ways, if they are to regain the faith of their constituents.
In recent years, “comprehensive benefits assessment” has been used to attract financing for big public projects and to build community support. This term means that all benefits, tangible and intangible, are taken into consideration in assessing a project’s justification. Intangibles include skill development, alleviation of poverty, knowledge sharing, and institution building. Undertaking a comprehensive benefits assessment is becoming the norm for determining the likely long-term success of projects and influencing decisions about priorities and resource allocation. The ability to drive transformational change—such as moving from good to great performance, cutting costs, or turning around a crisis—is a key source of competitive advantage. We have identified the primary success factors in large-scale government transformation programs—factors that relate to, among other things, how leaders define aspirations, set targets, plan for the short and long term, take risks, and empower teams for integration.
Refining Government’s Role as An Economic Shaper
What makes a great city? It is a pressing question because by 2030, four billion people—twenty percent of the world’s population—will live in cities, compared with two billion today, turbocharging the world’s economic growth. Leaders in developing nations must cope with urbanization on an unprecedented scale, whereas those in developed ones wrestle with aging infrastructures and stretched budgets. Yet all are fighting to secure or maintain the competitiveness of their cities and the livelihoods of the people who live in them. And all are aware of the legacy they will leave if they fail to find more sustainable, resource-efficient ways of managing these developing cities.
Governing is about delivery. The challenge of government is to improve the quality of life of citizens. “Are you better off today than you were four years ago?” has been a recurrent refrain in quadrennial American presidential campaigns and is a question that is just as relevant in the African political context. To meet this challenge, government has to come up with a clear and coherent set of ideas—a vision—and use available resources and instruments as efficiently as possible to produce the results that citizens expect. The risk taking involved in articulating and defining a progressive vision for the future is what defines great leadership. Achieving that vision as effectively as possible requires effective risk management—in other words, good governance.
The solution is not to attempt to develop an omniscient central planner but instead to develop a market-like mechanism that can generate feedback, crowd-source ideas for reform, and create incentives for improving performance. This tends to happen naturally but inefficiently. Because different private actors have different needs, they tend to organize themselves into interest groups to lobby the government for the public goods that most affect them. However, without them it is difficult to generate information about opportunities, obstacles, and solutions at the level of detail that is required.
Moreover, in a globalized world, policy makers will need to consider each other’s approaches even as they focus on their own goals.
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