The 9 key PFI questions on Public Governance relate to:

Regulatory governance and the rule of law

  • Regulatory reform framework

  • Coordination across government

  • Regulatory impact analysis (RIA)

  • Public consultation

  • Simplifying the administrative burden

Public sector integrity

  • International standards and national legislation

  • Application and enforcement

  • Review mechanisms

  • International initiatives

‌Download the full text of public governance policy guidance


Public governance refers to the formal and informal arrangements that determine how public decisions are made and how public actions are carried out, from the perspective of maintaining a country’s constitutional values when facing changing problems and environments. The principal elements of good governance refer to accountability, transparency, efficiency, effectiveness, responsiveness and rule of law. There are clear links between good public governance, investment and development. The greatest current challenge is to adapt public governance to social change in the global economy. Thus the evolving role of the State needs a flexible approach in the design and implementation of public governance.


Public governance is important for investors and their businesses. It helps build trust and provides rules and stability needed for planning investment in the medium and long term. It facilitates a smooth and productive interaction between the State and the general public, no longer based on rigid traditional “control and command” approaches, but on flexibility, guidance, communication and persuasion. Public governance is currently more participative and transparent. Regulatory clarity and certainty are valued by businesses and citizens. Innovative mechanisms to monitor and evaluate public management are commonly used to improve transparency and build credibility, important determinants of investment.


This chapter addresses two key dimensions of the public governance agenda relevant to investment and maximising its benefits: i) regulatory governance and the rule of law; and ii) public sector integrity, including the contribution of international co-operation. These topics are linked to others in the PFI. This chapter offers a more focused perspective on the core elements in the backdrop of performing public governance. From an OECD policy-experience perspective, the main goal is to support the assessment and analysis of policy making systems, capacities for fair compliance and their interaction with investors and economic agents. The challenge for the PFI user is to adapt these elements to some given policy specificities, resources availability and investment needs.