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.

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. Our Center for Government works with government departments and agencies to understand how public sector organizations can build new capabilities, continuously improve performance, and deliver more to society. 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, a 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.

To achieve rising prosperity requires not a silver bullet but an arsenal of policies deployed in systematic fashion. Most important, it requires a new level of understanding of how those policies interact and how they play out in the actual workings of an economy: among workers, in factories and offices, and between nations. This is a challenge, but policy makers can compare strategies and learn best practices to increase the likelihood for success. Moreover, in a globalized world, policy makers will need to consider each other’s approaches even as they focus on their own goals.

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.

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 Mr. Vincent Taupin

Mr. Vincent Taupin

 Mr. Antonio Horta-Osorio

Mr. Antonio Horta-Osorio

Related Practices

We help governments and public-sector organizations design and implement large-scale strategies that promote economic development and inclusive growth.

Learn more about key policies guiding our research