ABSTRACT
The understanding of the link between public investment and economic growth has improved in the past two decades. The notion that the institutions and practices of public investment management might have an influence on macrolevel investment efficiency was nowhere to be seen. The three pillars of public investment management are: the selection of good individual projects; the formulation of a coherent public investment program; and the arrangements for implementation and project management. In aid-dependent developing countries a large proportion of the funding for public investment comes from foreign aid and, except in the poorest countries and conflict-affected states, most aid-assisted projects require a local contribution from the budget. To help address weaknesses in project preparation, a 'technical contestability' office (TCO) could be established to provide technical oversight of the preparation and execution of major projects and guidance and facilitation of capacity building in the line ministries.
