Frequently Asked Questions


PIMA - Frequently Asked Questions

G.1 What is the difference between the PIMA and PEFA frameworks?

The PIMA is an IMF tool that assesses a key component of public financial management, namely public investment, across the planning, allocation and implementation stages, with a clear separation between institutional design (de jure) and effectiveness (de facto). PEFA is a multi-stakeholder tool that provides a broader assessment across all PFM institutions, with less detail on each institution and combining design and effectiveness criteria.

G.2 Are PIMAs used to define benchmarks in IMF programs?

A PIMA is done at the request of a country and is independent of IMF program negotiations. In some cases, reform measures that are recommended in PIMAs are subsequently agreed to be included in IMF programs.

G.3 How does the IMF support countries in implementing PIMA recommendations?

The IMF assists countries in PIM improvements through PIMA follow-up missions. In some countries, PIMA updates have been undertaken to assess the progress, and more countries are now requesting such updates, often combined with a Climate PIMA (see separate FAQ section on Climate PIMA).

1.1 What is the difference between a fiscal target and a fiscal rule?

A fiscal target is set in a policy document, for instance the annual budget document, and may change based on government decisions. A fiscal rule is generally established in legislation, is meant to be permanent for several years and can only be changed by parliament.

1.2 Do escape clauses undermine the credibility of fiscal rules?

In most countries, fiscal rules include escape clauses to deal with unforeseen events. If these clauses are very wide and are used repeatedly, the effectiveness of the fiscal rule is impaired. However, they still qualify as fiscal rules for the assessment of institutional design.

1.3 How does a fiscal target or rule protect public investment?

Fiscal targets and rules increase the predictability of fiscal planning, including for public investment. They are a necessary, but not sufficient, pre-condition for effective medium-term budgeting of public investments. Some fiscal rules have more direct impacts on public investment, for instance a “golden rule” stipulating that government borrowing can only be used for investment. 

1.4 How can countries address the fiscal risks from infrastructure?

It is important to adopt an integrated approach to fiscal risks from infrastructure across different delivery modalities – direct provision, public corporations (PCs) and PPPs. The risks related to PCs and PPPs may be less transparent and less well understood than the risks of direct provision, and PC and PPP risks may be underestimated. To address these risks, countries need: 

  • Robust integrated public investment management 

  • Effective fiscal and corporate governance of PCs 

  • A robust PPP preparation, procurement, and contract management framework

  • Integrated fiscal risk management

The IMF has developed a set of tools to assess fiscal risks (Fiscal-Risks-Toolkit (

2.1 Is a public investment program (PIP) a part of the planning framework?

This depends on the format of the PIP. In some countries, PIPs are long-term, strategic documents closely linked to the strategic planning framework. But in most countries, PIPs have short- to medium-term focus, and are more closely related to annual and medium-term budgeting.

2.2 Why should national and sectoral plans identify specific projects?

Planning of major infrastructure projects is a complex, multi-year undertaking and requires considerable resources. If these projects are only identified at the budgeting stage, there will not be time to ensure rigorous planning and project preparation.

2.3 Should outcome and output targets be linked to specific projects, or is it sufficient to link them to policies and programs?

Major projects should be justified by the value of the outputs and outcomes they create. If it is difficult to identify the potential project-specific benefits at the planning stage, it will be difficult to demonstrate a positive benefit/cost ratio during project appraisal.

2.4 Are there good country examples of Public Investment Management (PIM) policies?

A few countries, often advanced ones, have developed specific infrastructure and PIM policies and strategies. The UK National Infrastructure Strategy - GOV.UK ( and Ireland ( - Project Ireland 2040: Policy Documents ( are perhaps the best examples. Public investment strategies are likely to be most effective if they are linked to an overall vision for national spatial planning and regional development.  

Many EU countries have developed post-Covid recovery and resilience plans with strong emphasis on public investments, partly financed from the EUs recovery and resilience facility. They follow comparable formats and have to be approved by the EU commission. Recovery and Resilience Facility (

In Africa, Rwanda’s National Investment Policy (2017) is a good example of a succinct and focused PIM policy. For a low-capacity country, the most critical factor is to develop a robust strategic planning framework for public investments. A PIM policy must be closely coordinated with and integrated in the broader strategic planning framework. Whether it is a separate document or a part of the broader strategic plan document is a practical issue (Reports (

3.1 What does it mean that SNG investment plans are published alongside central government plans?

The SNG investment plans should be available at the same time and in a comparable format as central government plans. They may be a part of budget documentation, or they may be available through a common website. If it is necessary to search through websites of all the different SNGs, this does not qualify as “published alongside”.

3.2 What is the definition of a rules-based transfer mechanism for capital spending?

A rules-based transfer mechanism should be embedded in legislation and should provide clear, objective criteria for allocation of transfers. If there are informal rules and practices that lead to consistent allocations over time, effectiveness may be assessed as higher than institutional design.

3.3 Should SNGs and PCs report both explicit and implicit contingent liabilities?

Explicit contingent liabilities should always be reported. Implicit contingent liabilities are often related to policy decisions and are more difficult to quantify. For instance, an SNG may decide to bail out a local hospital organized as a PPP, although they are not legally obliged to do so. If the risks related to the implicit contingent liabilities are material, they should be reported when this becomes apparent. In some cases, this reporting could be confidential to avoid jeopardizing the SNG’s negotiating position.

4.1 Is a feasibility study the same as a project appraisal?

Usually, a feasibility study is more limited than a full project appraisal. The feasibility study is often done by an external consultant, and focuses on the technical, financial and economic viability of the specific project. An appraisal should also comprise the government’s assessment of the feasibility study, including how this project will support sectoral policies and broader government objectives. The contents of a project appraisal should be clearly specified in government regulations.

4.2 Does project appraisal require cost/benefit analysis (CBA)?

All project appraisals should include a comparison of the expected costs and benefits of a project. For small, standard projects, this assessment can be done on a portfolio basis and need not be repeated for each project. In these cases, the appraisal should focus on cost-effectiveness. For countries with limited capacities, the assessment of benefits will often have to be qualitative. As capacities evolve, analyses will gradually become more quantitative and more comprehensive.

4.3 How comprehensive should a risk mitigation strategy be?

For basic, standard investments, the risk mitigation strategy should identify at least the five main risks facing the project and make a qualitative assessment of the likelihood and impact of each of these. The strategy should outline measures that can be taken to address each risk, indicating who should be responsible for each risk mitigation measure.

More complex projects require much more complex arrangements for risk identification, mitigation, and management. Successful approaches used in advanced economies include use of reference class forecasting, specialized external assurance of projects at various stage gates, advanced forms of commercial contracts and appropriate governance arrangements. 

4.4 Can project appraisals be based on market prices for project inputs and outputs?

In many cases, market prices will not fully reflect external impacts of the project, for instance environmental impacts. Because of this, the financial analysis of a project should be supplemented with an economic cost/benefit analysis, where key external impacts are reflected in adjusted prices and/or qualitative assessments. The analysis must be consistent with country capacity. See the PIMA Handbook for references to methodological guidelines.

4.5 Should project appraisal requirements be tailored to project size and complexity?

Yes. Many countries have procedures that establish three levels of project appraisal: simplified appraisal for small projects with low complexity, standard appraisal for medium-sized projects, and extended appraisal for large and complex projects. Specific thresholds are provided in appraisal regulations.

4.6 How are external impacts reflected in project appraisals?

There are three main approaches: quantified and included in CBA base case, quantified and included in sensitivity analysis, or included in qualitative assessments. Countries often use a combination of the different approaches, sometimes differentiated by sectors, as defined in their appraisal regulations.

5.1 How do we assess the independence of a regulatory agency?

An independent regulator should be a separate agency and not part of a ministry or other agency. It should be empowered to take independent decisions, for instance regarding prices in regulated markets, without ministerial approval. It should also have assurances of professional independence and the authority to hire and fire professional staff. 

5.2 Should the assessment of PPPs include concessions?

Yes. PPPs include all types of contracts for private provision of public goods that entail costs or risks to the government. This will often include concessions, depending on the legal specifics of the country. If the government provides a guarantee to a project, or if there is an implicit expectation that the government will step in if the private supplier fails, the project should be assessed as a PPP.

5.3 Do board members from government ministries constitute central oversight of PC investment plans?

No. Board members are usually required by corporate law to reflect the interests of the PC, which may be in conflict with government interests, for instance in the case of insolvency and bankruptcy. The government should have a PC oversight function that is external to the company and the board, including regular reporting and owner meetings.

5.4 How should PPPs by SNGs be treated in the national PPP framework?

Good practice in this area implies that SNG PPPs should be covered by the same legal and regulatory framework as central government PPPs, the explicit and implicit liabilities from SNG PPPs should be fully disclosed in financial statements and these liabilities should be counted under any limits on SNG borrowing and/or risk exposure.

5.5 Are there any recent country experiences with asset recycling PPPs?

The main feature of an asset recycling PPP is that it involves a brown-field (existing) rather than a green-field (new) infrastructure asset. Some asset recycling involves a complete divestiture of the asset to the private sector, but it seems that long-term leases are more common. Australia implemented a major Asset Recycling Initiative in 2015. The basic idea was to monetize future revenues of existing government-owned infrastructure to finance new infrastructure, through sale or long-term leases (concessions). The program was reviewed in 2019 and deemed to be quite successful.

Review of the National Partnership Agreement on Asset Recycling | 

There are similar initiatives underway in India and Indonesia, and there are discussions in some other countries, including the US. You would expect a brown-field PPP to be less challenging than a green-field PPP, because the risks related to planning, construction and hand-over have already been dissolved and the asset is in the operational phase. But this also means that the potential benefits of private-sector management of the asset is more limited than for a green-field project. The main challenge to government when dealing with long term private finance agreements is to identify, share, price and manage risks. History shows that this is often difficult to do and may be very costly if mishandled.  

5.6 Is there a role for government-to-government (G2G) collaboration in PPPs?

Some types of infrastructure projects include both G2G and regular PPP arrangements. For instance, a donor country can provide assistance to develop and appraise a project that subsequently is tendered as a PPP. It is important to fully assess and disclose the costs, benefits and risks of these arrangements, and to avoid constraints on the PPP tender process, for instance by limiting this to companies from the donor country.

5.7 Should user-pays PPPs be assessed and managed alongside other PPP arrangements? 

Yes. It is important to ensure that all PPPs are assessed according to clearly defined government policies and criteria, and that all risks and potential costs are thoroughly verified. The illusion that the state is shielded from risks in “user-pays” PPPs, and that these are fundamentally different from other types of PPPs, is one of the major flaws in many PPP governance frameworks. Most user pay PPPs have some form of public support (e.g. land, exclusive rights, tax incentives, guarantees) that should be fully disclosed. Experience clearly shows that these types of PPPs frequently require government bail-outs as project assumptions, for instance regarding traffic volumes, fail to materialize. CEE Bankwatch has a number of articles on PPP mishaps:

6.1 What is the difference between capital expenditure forecasts and ceilings?

A capital expenditure forecast is an estimate of what capital expenditures are likely to be, usually over a 3 to 5-year period. It is based on specific assumptions, which may change over time, and the forecast is usually regularly updated. A capital expenditure ceiling is a legal or policy limit that guides the planning and budgeting of ministries and agencies. It establishes an upper limit for the value of projects, or a portfolio of projects, that can be scheduled for implementation by the specific entity. The updated aggregate forecasts will often be lower than the sum of the ceilings, because aggregate project execution will usually be lower than 100%.

6.2 What is meant by binding, medium-term budget ceilings? 

A binding budget ceiling means that ministries and agencies have to plan and budget their expenditures at least for the budget year. A binding medium-term ceiling means that the ceilings are binding for the medium-term budget period. To enforce binding ceilings, ministries of Finance may return budget proposals that are not consistent with the ceilings to the ministry in question.

6.3 What is included in total construction costs for capital projects?

This comprises the total costs incurred to create the capital asset, including the direct construction cost as well as the cost of land, provision of utilities, furniture and equipment; planning and administration of the project up to the completion point.

6.4 Why is medium-term budgeting so important for public investments?

Public investments are primarily meaningful in a medium- to long-term perspective. If a budget manager focuses on preparing and executing the annual budget, the potential long-term effects of investments may be accorded little importance, and the capital budget will tend to be under-funded. Most efforts to extend the time horizon for budget management include the introduction of medium-term budget frameworks (MTBFs), but few EMEs and LIDCs have been able to introduce effective MTBFs so far. A viable alternative is to begin by preparing multi-year budget estimates only for investments and for major expenditures driven by demographics and entitlements. Accrual accounting and budgeting can improve the time-consistency of budgetary decisions, but most EMEs and LIDCs are at an early stage in introducing such mechanisms. For more information about medium-term budgeting, see for instance: Chapter 4: Medium-Term Budget Frameworks In Advanced Economies: Objectives, Design, And Performance in: Public Financial Management and Its Emerging Architecture (

7.1 What is included in “extra-budgetary entities”?

In the PIMA framework, extra-budgetary entities are defined as entities that carry out government activities, and that should be classified as government according to GFSM 2014, but are not included in the government budget. These will often be organized as agencies with special authorities or statutory bodies.  Public corporations, which primarily carry out commercial activities, are normally not part of the government and therefore not included in the definition of extrabudgetary entities. However, in some countries there are state-owned enterprises that are non-commercial and should be redefined as government agencies, to be consistent with GFSM2014. If this is the case, these entities should be defined as extra-budgetary for the purpose of a PIMA.

7.2 What is covered by the term “budget documentation”? 

This term comprises all documents that are submitted to parliament in connection with the budget process. This may include a pre-budget report, a medium-term budget, the annual budget and several supporting documents, including budget execution reports and financial statements for previous years. The documents do not need to be published at the same time, but they should all be available when parliament approves the budget.

7.3 How does a program or functional classification contribute to budget unity?

A well-designed program or functional classification will combine the different elements that are needed to produce specific outputs and result in specific outcomes. This will include all the costs related to infrastructure assets, including both construction, operations and maintenance costs. This is very useful to assess the full costs of infrastructure and weigh these against benefits, in particular when the classification is used consistently from planning, through budgeting and fiscal reporting.

7.4 Should countries establish separate systems to manage externally funded or financed infrastructure projects?

No. All infrastructure projects should be subject to consistent procedures for planning, resource allocation and implementation. External funding and financing partners may have specific requirements for these processes, including for reporting on the use of the funds provided. These requirements should be integrated in and covered by the national PIM system to the extent possible, but some additional reporting or safeguards measures may be necessary.

7.5 Can current and capital budgets be separately prepared, but still be well-coordinated or integrated, for instance through a unit that analyzes the interactions between the two budgets and the recurrent impact of major projects?

In principle this seems possible but it is difficult in practice. Separate but well-coordinated preparation of capital and current budgets would imply that the country would have a low score on PIMA dimension 7c Design, but a high score on 7c Effectiveness. There are no examples of this in the PIMAs carried out so far.

8.1 How can a mechanism to protect funding of ongoing projects be designed? 

It is helpful if budget planning distinguishes between the cost of ongoing and new projects activities. The cost of ongoing projects activities could form the core of the budget and budget discussions would focus on whether to include new projects and activities. The budget law and circular should include a clear provision that all ongoing projects must be fully financed before any new projects are included, and the Finance Ministry must ensure that this requirement is effectively enforced when they analyze budget submissions.

8.2 What is the legal status of a multi-year appropriation for a capital project?  

A multi-year appropriation should have the same legal status as an annual appropriation. It can be changed, but only through a new decision by Parliament. The Budget law should include provisions that multi-year appropriations one year are fully reflected in subsequent years’ budgets unless there is an explicit decision by Parliament to amend the appropriation. 

9.1 What is meant by a standard methodology for assessing maintenance needs?

A standard methodology is an analytical framework that is applied to systematically estimate maintenance needs for different sectors and across government. There are two main approaches: standard, experience-based coefficients for different types of assets (2% of asset value for building maintenance each year) and condition-based estimates (regular assessment of assets to identify specific maintenance needs). Both approaches require that there are asset registers with indication of value and/or condition.

9.2 What does it mean that maintenance spending is systematically identified in the budget?

Systematic identification means that it is easy to find comprehensive data for maintenance spending, for instance if the budget classification has specific codes for maintenance and these can be aggregated. 

9.3 What does it mean that maintenance spending is reported?

This implies that budget documents present systematic and comprehensive overviews of actual maintenance spending, compared to budget figures, for the last few years. 

10.1 What is the distinction between project appraisal and selection? 

Project appraisal assesses the net benefits of a project and its readiness for implementation to see if it is a good candidate for implementation. This can take considerable time and can be done relatively independently of the budget process. Project selection is the actual decision to implement the project and is usually part of or coordinated with the budget process. In some cases, in particular in advanced economies, project appraisal and selection is iterative, with several decision gates as projects move through the development process.

10.2 Who should review capital projects prior to a budget decision, and what should be the substance of this review?

All major projects should be reviewed by a government unit that is independent of the project proponents and does not have any vested interests in the project. This unit will often be located in the Finance or Planning Ministry, or in an agency subordinate to them. Complex projects may also benefit from independent quality assurance by a private specialist company. The review should verify that the information in project documents is credible, and that the analysis of project costs, benefits, and risks, as well as implementation readiness, is realistic.

10.3 What is the definition of a pipeline of appraised capital projects?

This is a database of projects that have been subject to appraisal and review and that are deemed to be good candidates for implementation decisions. The pipeline or database is sometimes called a public investment program (PIP), but the term PIP may also be used for collections of project proposals that are not fully analyzed and vetted.

10.4 How should debt policy departments be involved during the various stages of the investment process?

It is reasonable that the debt policy department is involved in decisions on loans or guarantees for investment projects. There may be important legal and technical considerations regarding the specific mechanism, and an increase in explicit or contingent liabilities may be relevant for debt policies and fiscal risk management. However, the debt department should not be the ones who have the final say about whether a specific investment project is implemented or not. Good practice in this area is that the debt department is involved when the government considers how a specific project can be implemented, including the use of PPPs, project loans, guarantees or other mechanisms beyond traditional budget financing.  This would be done after the relevant decision-making body has decided to develop the project further, but prior to the final decision to implement the project. Depending on the set-up, this could be a part of the project appraisal or it could be a separate step in the process.

10.5 Is the inclusion of a project in a PIP a guarantee that the project is consistent with government objectives, is well designed and thoroughly analyzed?

No. In many cases, a PIP is a wish-list rather than a database of pre-appraised projects of high strategic importance and quality. It is important to review the criteria and procedures for PIP inclusion before making any judgement about the quality of the included projects.

10.6 How should grant funding or blended financing for infrastructure projects be assessed?

Project selection should be based on national priorities, not on availability of financing. The full economic and financial implications of funding arrangements should be analyzed and disclosed in budget documents, including any co-financing and guarantee arrangements and other fiscal risks. Countries should avoid aid that is tied to suppliers from the donor country.  

11.1 Does an E-procurement system ensure that procurement information requirements are complied with? 

No. An E-procurement system makes the process more transparent and can support more efficient administration, but there must still be internal control procedures to ensure that the correct information is provided and regulations are complied with.

11.2 What is the definition of a competitive procurement process?

Competitive procurement implies that all qualified bidders can bid for a project and that there is no discrimination between bidders. Qualification requirements should be fair and transparent and should not be designed to favor any bidders. International competition means that bidders from all countries may participate. National competition means that the procurement is limited to domestic bidders.

11.3 What is the definition of an independent review body for procurement complaints? 

The review body should be independent of the procuring ministry or agency. Many countries have set up permanent review boards with independent members to handle complaints.

In the highest-performing systems, complaints are handled in a timely manner and the results of review processes are published. 

11.4 Can price lists for commonly used goods and services be helpful for effective procurement?

The value of such pricelists is uncertain. Some countries put significant resources into compiling these lists, but in other countries they do not exist at all. If there is a strong interest in maintaining such lists, the structure and the routines for compiling and updating information should be guided by the intended use. An alternative, or a complement, to compiling price lists could be to ensure that the relevant authorities have good methodologies for cost estimation, a good understanding of existing national and regional price statistics, and perhaps carry out targeted surveys of key markets.

11.5 How can framework procurement support effective public investment management?

Framework procurement is where competitive processes are used to establish agreements with a provider or range of providers that enable procuring authorities to place orders for commonly used goods and services without running lengthy full tendering exercises every time. Such approaches can support standardization, speed up delivery and enhance efficiency.

12.1 How are commitment ceilings usually formulated and conveyed?

Commitment ceilings are set to control in-year spending patterns by the line ministries and avoid potential arrears in the case of cash shortages. The annual budget allocation is divided, for instance by quarters, and line ministries can only commit funds up to the commitment ceiling for the period. Enforcement of these ceilings is often done in centrally controlled commitment registration/budget execution/payment processing systems.

12.2 What is meant by the "main government bank account structure”?

Governments will often have a main account (treasury single account) and a limited set of closely connected additional accounts in the central bank. They will have real-time information and direct access to this account structure, which plays a key role in government cash management. Accounts in commercial banks or other accounts that are not immediately available for cash management purposes will generally be deemed to be outside the main account structure.

13.1 Which information should be included in central portfolio monitoring? 

Central portfolio monitoring should be forward-looking and capable of identifying major projects that are at risk of delays or cost overruns. All these projects should have implementation plans with detailed baselines for expected physical and financial execution. Portfolio monitoring should identify discrepancies between project baselines and actual progress (S-curve monitoring), as an early warning signal of potential problems. Reports should also identify the possible causes of these deviations from the baseline, and the steps that project managers are taking to address the challenges. 

13.2 Why is portfolio monitoring data more useful than data for individual projects? 

Portfolio data consolidates information from different projects and allows for comparison across these, to identify systemic challenges as well as examples of good project management that can be emulated in other projects. For example, aggregate portfolio monitoring has been used to identify broader trends such as capacity constraints in delivery agencies, skills shortages in the construction sector and bottlenecks in the planning process. 

13.3 What is the difference between ex-post external review and a project completion report?

A project completion report is prepared by the project implementation entity or by a supervising engineer, immediately after project completion. It should summarize actual project implementation compared to the implementation plan, but does usually not do an in-depth analysis of the project. An ex-post review will usually be done somewhat later. It will also look at project implementation and provide more analysis of the causes of any delays or cost overruns. In addition, it will reassess the probability that the project will meet its stated objectives and deliver its benefits during the operational phase.

13.4 How can we ensure timely implementation of complex investment projects? 

A balanced and consistent PIM framework is essential for effective project implementation, and most PIMA institutions have significant impacts on the effectiveness of project implementation. If a project is not well planned, prepared, and analyzed, or if budget allocations are not predictable or adequate, delays are highly likely. The institutions under pillar three are critical, but good performance here will be insufficient if there are weaknesses earlier in the process. 

For complex projects there must be a consistent focus on identifying, mitigating and managing risk throughout the life-cycle. 

14.1 What is the definition of a “senior responsible officer” for major investment projects?

This is the person that is held accountable for successful project implementation. To be held accountable, he or she must have the necessary authority, time and resources to ensure effective implementation. A minister or a department director will usually not be able to fill this role, because of their other tasks. A consultant will not have the authority to take the necessary decisions. For major projects, there will often be a comprehensive project governance structure, including a “project owner”, who is held accountable for the project, as well as a full-time project manager and other technical staff.

14.2 Why should project implementation plans be prepared prior to project approval? 

The project implementation plans establish the baselines that are used to monitor project progress. In the absence of such baselines, it is not possible to monitor projects effectively. Problems will only become apparent after the fact, and proactive risk management becomes impossible. In practice, the information required to fully understand likely project cost and schedule requires detailed engagement with the design and construction processes. Accordingly a project implementation plan is required in advance of a final decision to proceed with a project in order to have fuller information on budget and delivery timelines in advance of approval.

14.3 How can project implementation units (PIUs) help ensure effective project implementation? 

PIUs are set up to help implement major projects or groups of projects in low-capacity countries. They are usually a collaboration between the government and the relevant international financial institutions and development partners; and are often staffed by private sector experts or government experts on special contracts. To promote sustainability and effectiveness over time, all PIUs should have a clear strategy and plan for mainstreaming their activities and developing the necessary capacity within the government sector.

14.4 Does a financial and compliance audit qualify as ex-post external audit of projects? 

No. The PIMA asks for ex-post external audit of whether project implementation was effective and whether the project is likely to achieve the planned objectives. This requires a performance audit and not a financial or compliance audit.

14.5 What is good practice for re-appraising a project? In some countries, ministries avoid project appraisal requirements by defining a project as an extension or modification of an existing project or investment program. 

Project adjustment is covered by PIMA dimension 14b. Good practice in this area implies that there are standardized rules and procedures for project adjustments, including for a fundamental review of the project’s rationale, costs, and expected outputs if the project changes significantly. These rules should define when new project elements or sub-projects can be included in ongoing projects, and when this would trigger a re-appraisal. The PIMA handbook uses the reappraisal procedure in Korea as an example. This was chosen because it is very transparent and well-documented.

15.1 How should asset register data be compiled and verified? 

Budget entities will usually have some information about the assets they manage, for instance historical cost. A useful starting point could be a survey, where budget entities are asked to provide indicative data for their main physical assets. This can provide initial information about the location, value and condition of main government assets. The survey can form the basis for a regulation on asset recording at the entity level, and for periodic reporting of this information to the center. Over time, asset information should be integrated in regular accounting and financial reporting procedures, subject to regular internal control and audit requirements.

15.2 Is accrual accounting a prerequisite for compiling a government balance sheet?

A complete government balance sheet will require accrual accounting. However, it is possible to compile an indicative balance sheet, by combining accounting and statistical information, and supplementing this with surveys as required. An indicative balance sheet will not be precise, but will still provide very valuable information about government assets and liabilities.

I.1 Should public investment information systems be separate or a part of broader government information systems?

It is very demanding to develop and maintain large, integrated, multi-functional government information systems, and most countries have resorted to having several different systems for different purposes. In some cases there is an integrated system for core public financial management (FMIS), usually focusing on payment processing and accounting. Because FMISes tend to be transaction-oriented, more analytical functions like macroeconomic forecasting, investment planning and budgeting are usually handled by separate systems, but often with interfaces to the core FMIS. These interfaces help reduce duplication of functions and data redundancy.

L.1 Are there international standards for effective legal frameworks for public investment?

No. There are no clear legal standards in this area and countries have chosen many different approaches. Very few countries have separate laws on public investment, but many have a section on this topic in the Budget system law. Countries that have developed comprehensive public investment procedures usually include these in regulations and guidelines.

S.1 How can staff capacity for public investment be developed and retained? 

Effective public investment management will generally require a core center of competency in the Finance and/or Planning ministries or related agencies. This will be the unit that develops regulations and guidance materials, assesses project proposals and supports the decision process. This unit should also have a responsibility for supporting capacity development in other parts of the government. There should be courses to train core staff in ministries, agencies and SNGs, which again should provide training and support to colleagues. This should be coordinated with other government training organizations. Because staff will move between organizations, training must be a continuous effort.

S.2 What are the international experiences on institutional arrangements for public investment coordination in emerging economies, in particular the relationship between the planning and finance ministries?

Practices are quite divergent across the world. In Latin America, which generally has comprehensive public investment frameworks, the investment coordination function is usually in the planning ministry/agency or a successor to this. Outside Latin America, many emerging economies have abolished or restructured the planning ministry or merged it with the Ministry of Finance. In emerging economies where the planning ministry has been replaced by a Ministry of Economy, which largely focuses on facilitating private investment through policy development, it is less common that they retain the public investment coordination function, because they no longer have the specialized technical skills. When discussing institutional arrangements for public investment coordination, the focus should be on how to ensure the necessary skills, capacity, and authority.

O.1 How should public investment projects be classified in program budgets?

In a well-designed program budget classification, a program could correspond to a specific outcome (such as adequate mobility), sub-programs could provide intermediate outcomes (reduction in travel times for road transport) and/or similar types of outputs (investments in new roads) and an activity should provide specific outputs (completion of a specific major road project or group of smaller projects). We would generally expect investment projects to be identified at the activity (third) level. Groups of investments covering several major investment projects could be sub-programs in the classification. The program and sub-programs should also include the current costs for achieving the objectives, including maintenance and administrative costs.

O.2 Should public investments be classified as administrative entities in budget classifications?

In most cases, investments are classified as activities rather than administrative units (see question O.1). This highlights that the purpose of an investment is to create a specific asset and contribute to meeting outcome objectives. In a few cases, investments are so large that special administrative units are set up to implement them. In these cases, the investment may also be reflected in the administrative classification, but the activity and its outputs should still be specified in the program classification.

O.3 Can public funds be used to “de-risk” infrastructure projects and mobilize private sector financing? 

There are currently many proposals for how public funds can be used to “de-risk” infrastructure projects. The G20 IWG and the OECD have presented many proposals in this regard. The Egypt Green Financing Facility (GFF) is one example of such a mechanism. These mechanisms are not new. They have been used by national development funds for many years, in many cases supported by MDBs and IFIs. The “de-risking” funds are often connected to other initiatives to promote private provision of infrastructure. Indonesia is a good example of this. These mechanisms have direct and indirect fiscal impacts and pose explicit and implicit fiscal risks, and it is important to fully assess fiscal impacts and risks when analyzing proposals for de-risking mechanisms.

O.4 How to choose projects that have the highest (social) rate of return? Are there any papers that discuss which sectors would have the biggest rate of return for prioritizing based on various stages of development (infrastructure vs. human capital)?

Generally, return on investments have to be assessed on a project basis. We are not aware of any analysis that indicates that certain sectors generally are more beneficial than others, across countries and over time. However, there is broad consensus that maintenance, both current and capital maintenance, is likely to have high returns in most countries. There are also several documents describing the public investment priorities of individual countries.

O.5 In LIDCs, is there a possible role for a Development Agency to be the main counterpart of all donors, ministries and agencies, performing the monitoring and reporting of all operations related to capital projects and PPP, providing assistance and training, and being also an implementation agency; as well as a separate Investment Fund for public investments?

This type of construction was popular in the 1960s and 1970s; but has been closed down and integrated in regular government agencies in most places. It is particularly important that the interaction with donors on funding and financing is integrated with the MOF debt and cash management, and that there is no separate fund for investments. There may be a case for having a technical entity to support project monitoring and management and provide training, but this entity should not be involved in project financing. Monitoring arrangements for capital projects should be consistent regardless of how they are funded, but there may be a need for some special reporting to meet donor requirements. If there is a strong political interest in having a “development agency”, this should be a department within the MOF. Any investment fund should be limited to be a virtual planning/reporting tool, not an actual fund.

O.6 How should government investment vehicles (state-owned enterprises) that invest in public infrastructure be organized and managed?

It is not obvious that a generalized government investment vehicle that invests in domestic projects is a good approach. Sector-based SOEs, for instance for energy, combined with a national development bank or similar financial institution, to address financial market shortcomings, may be a better choice. There is an extensive literature on governance and management of sovereign wealth funds, including a set of accepted good principles (the Santiago Principles). Some of these funds act as government investment vehicles, and the principles should be relevant for government investment vehicles more generally ( Malaysia’s SWF, Khazanah, does make some domestic investments, including for development purposes (

O.7 Are there any examples of good country practices of public investment agencies/units that manage the pipeline and support selection of major capital projects?

The best examples in this regard are generally in Latin-American countries, who were the frontrunners in developing modern public investment management systems, typically including a central agency that manages a pipeline (project bank). Historically, Chile, Mexico and Colombia had the most comprehensive systems. This website gives a very useful overview of the PIM systems in Latin America: