Multi-level Governance, Public Investment and Subnational Finance

Regional Development & Public Investment



Subnational governments are key public investors, including for infrastructure

Subnational governments - states, regions, municipalities - play a pivotal role in public investment, including for infrastructure, as they invest in areas that are critical for growth and well-being. In the OECD, subnational governments are responsible for 57% of total public investment. When well-managed, public investment can support growth. A territorial approach to public  investment, supported by effective multi-level governance, helps countries maximise their return on investment for regional development.

 OECD Recommendation on Effective Public Investment across Levels of Government

Online Toolkit | Monitoring report | Implementation brochure

Rethinking Regional Development Policy-Making


What's New

OECD/ADB High-level Workshop on Funding and Financing Inclusive and Quality Infrastructure Investment in Regions and Cities, in support of the Indonesian G20 Presidency

6 September, 2022 (virtual)

As we move beyond the COVID-19 crisis and face new shocks and ongoing challenges (climate change, supporting the digital transition, etc.), subnational government will have a key role to support inclusive and quality infrastructure investment in regions, cities and rural areas. This requires getting the right enablers in place to support subnational investment and helping subnational governments to access funding sources and financing instruments for supporting inclusive and quality infrastructure investment.

This high-level workshop was organised by the OECD and the Asian Development Bank (ADB), in support of the Indonesian G20 Presidency. The workshop gathered over 140 participants to discuss funding and financing challenges faced by subnational governments around the world in infrastructure investment, and explored practical solutions and initiatives that could help address these challenges.  

See the Agenda


Watch the Workshop


Presentation by Ms. Lamia Kamal-Chaoui, Director, Centre for Entrepreneurship, SMEs, Regions and Cities (CFE), OECD


Presentation by Ms. F. Cleo Kawawaki, Head of the Office of Public-Private Partnerships, ADB


Summary (Forthcoming)



Topics & Publications

Infrastructure investment in Regions and Cities

Subnational governments are in charge of key infrastructure areas that have been strongly affected or mobilised by the COVID-19 crisis, including health care, social services, education, public transport, roads, social housing, utility networks, and digital infrastructure. As part of post-pandemic rebuilding, we support policy-makers to better design and implement sustainable and resilient infrastructure investment in regions and cities. 

Our work on the governance and finance of subnational infrastructure investment is part of the OECD's activities on infrastructure, and supports the G20 initiative on sustainable infrastructure implementation.



Multi-level Governance and Public Investment

When well-managed, public investment can support growth. A territorial and multi-level governance approach to investment allows countries to maximise return on investment for regional development. In 2014, the OECD Council adopted the Recommendation on Effective  Public Investment across Levels of Government, which has been adhered by 39 countries. The OECD closely monitors how countries are implementing the Recommendation. The OECD also carries out country/region study in this field.

Governance and Strategic Planning of Regional Development 

What can governments do to enhance economic development in regions and cities? Regional and local government finance has been udner increasing pressure, it is paramount to enhance the effectiveness of regional policy governance instruments to add value to public spending and investment. The OECD analysis draws lessons from theory and practices of different countries to support policy-makers in ensuring public spending and investments contribute to regional development as effectively as possible.


Governments not only need to know what to do, but also need to learn how. The OECD supports national and regional public authorities to strengthen their strategic and administrative capacity in delivering regional development policy. 


Governance of Regional Innovation Policy  


International Forum on Regions in Industrial Transition

23 November, 2022, Virtual (Zoom)

Regions in industrial transition face significant structural challenges in retrieving past dynamism and improving resident prosperity. The International Forum on Regions in Industrial Transition brings together policy-makers, practitioners, and experts for action-oriented discussions on development in industrial transition regions to:

  • Provide insights and perspectives on the objectives, governance tools, and challenges of industrial transition in Europe and North America
  • Highlight advantages and disadvantages of designing and implementing policies to support industrial transition through an experimental governance approach
  • Identify policy levers for industrial transition regions, promote an exchange of good practice, and disseminate lessons learned from experimentation

The Forum brings the lessons and insights gained from a multi-year project on industrial transition launched in 2018 by the European Commission/DG REGIO with support from the OECD. The project includes a pilot action with ten regions and two countries in industrial transition to prepare their Smart Specialisation Strategies (S3) and innovation policies for the 2021-2027 period.

Registration link


Forum Agenda


OECD project synthesis report: Regions in Industrial Transition: Policies for People and Places




Smart Specialisation Strategies (S3) are one channel for implementing Responsible Research and Innovation (RRI) at the regional level. The OECD has developed a self-assessment tool can help assess whether existing smart specialisation strategies (S3) are evolving into sustainable and inclusive smart specialisation strategies (S4+). Regional and local authorities, policy makers, NGOs, community leaders and project beneficiaries alike may find the tool useful for directing innovation towards addressing societal challenges.



Past Events


Keynote Speech on Innovative Infrastructure Funding and Financing in Regions and Cities at the G20 High-Level Conference on Local Infrastructure

(27 September 2021, Genoa, Italy)

The OECD delivered a key note speech at the G20 High-level Conference on Local Infrastructure Investment, which was organised by the G20 Italian Presidency, Istituto Affari Internazionali, and the Municipality of Genoa. This is the first time that local infrastructure is included as a core focus on the G20 Infrastructure Working Group agenda. The conference brought together leaders from regional and local governments to discuss how to boost infrastructure funding and promote transformative and green infrastructure.

Ms. Dorothée Allain-Dupré, Head of Division of Regional Development and Multi-level Governance, Centre for Entrepreneurship, SMEs, Regions and Cities, presented the findings of an upcoming report on Innovative infrastructure funding and financing in regions and cities: Unlocking investment in subnational government infrastructure during the COVID-19 recovery and beyond.


The presentation of the OECD keynote speech 

The OECD keynote speech 

Access the full report 

More information on the G20 Conference


Related topics


 Subnational Public Finance and Investment  




Related Documents