Selected Issues Papers

Against a backdrop of constrained fiscal space, Belgium faces considerable investment needs. Improving infrastructure governance processes can enhance investment efficiency, achieving more “bang” for each investment “buck”. This paper analyzes public investment management practices in Belgium, highlighting several areas for improvement by the federal and regional governments. The findings indicate an absence of clear infrastructure strategies, weak practices for project preparation (including project appraisal, selection and approval processes), fragmented governance, and an absence of coordination within and between entities. The “gatekeeping” role of the Ministry of Finance, common in most advanced economies, is largely absent in each of the entities in Belgium’s federal state. Notwithstanding these areas for improvement, there are examples of good practices in individual agencies, and a number of promising reform initiatives are underway. The paper recommends taking a strategic and coordinated approach to investment planning, establishing standardized project preparation practices, enhancing coordination between federated entities and with the federal entity, and strengthening the role of departments of finance/budget in the public investment process. Together, these steps can improve infrastructure governance and support enhanced investment efficiency.