24 November 2020

Can a strong enabling environment encourage greater private investment in infrastructure?

24 November 2020

The quality of a country’s investment enabling environment is important for unlocking greater private investment in infrastructure. This is true regardless of income level, although it is even more important for lower income countries.

Combining data from two of our latest tools, Infrastructure Monitor and InfraCompass, our analysis shows that countries with higher InfraCompass scores - that is, those with a stronger enabling environment - are associated with higher levels of private infrastructure investment as a share of GDP, on average.

What does a strong enabling environment mean? There are a number of dimensions, including strong governance and institutions, effective regulatory frameworks that promote investment and competition, transparent public planning and procurement processes, the capacity of the government to fund infrastructure, and the depth of the local financial market. Our data show that these are all key to mobilizing greater private capital into infrastructure.

To explore more data-driven insights on private infrastructure investment, download our new Infrastructure Monitor report, or use our InfraCompass tool to see what your country can do to improve the investment enabling environment.