Public investment can enhance productivity and promote economic growth, foster societal wellbeing, and support long-term policies. Government expenditures can be considered investments if they are directed towards durable assets like transport or energy infrastructure, healthcare or education facilities, IT systems, defence systems, and intangible assets such as research. Government investment often includes purchases needed to implement long-term policies, such as promoting sustainable development by investing in green energy infrastructure. Government investment may be important during economic downturns because it can stimulate demand, create jobs, and help stabilise the economy, particularly when there are high levels of uncertainty that may weigh on households and private sector investment decisions (OECD, 2025).
Across OECD countries, public investment spending averaged 3.5% of GDP in 2023, ranging from 6.8% of GDP in Estonia to 1.4% in Costa Rica. Investment rose in 24 of 37 countries between 2019 and 2023, with an average increase across OECD countries of 0.2 p.p of GDP. The largest increases were in Estonia (1.7 p.p.), Greece (1.5 p.p.) and Slovenia (1.4 p.p.). In 2024, government investment spending was 3.6% of GDP across the OECD-EU countries. It rose between 2023 and 2024 in 17 of the 27 OECD-EU countries for which data is available. The largest increase was in Sweden (0.4 p.p.) (Figure 15.4). Government investment averaged 15.5% of total national investment across OECD countries in 2023 (Online Figure J.10.2).
Investment spending averaged 8.2% of total government spending in 2023, a slight fall from 8.4% in 2019. Despite this, government investment as a share of total investment increased in only 22 of 37 countries. The largest increase was in Greece (2.7 p.p.) and the largest fall in Costa Rica (-4.2 p.p.). Between 2023 and 2024, government investment as a proportion of total investment rose in 14 of 28 countries for which data is available and fell in 14. The largest increase was in Italy (1.1 p.p.), and the largest decrease was in Hungary (-1.7 p.p.) (Figure 15.5).
The distribution of investment expenditure across levels of government varies, especially between federal and unitary countries. In 2023, on average across OECD countries, 43% of government investment was carried out by central government, 28% by state governments and 28% by local governments. Central government accounted for over half of government investment in 22 out of 37 OECD countries. Government investment in many non-federal countries is carried out predominantly by central government, such as in Chile (88%) and Hungary (76%). In highly decentralised or federal countries, it is often primarily carried out by state and, to a lesser extent, local governments. For example, in Canada the shares are 11% central, 51% state and 38% local government; and in Belgium 19%, 52% and 29% (Figure 15.6). The most common area for government investment expenditure is economic affairs, which averages 33.1% of government investment (Online Table J.10.4).
