Coordination of infrastructure investment across levels of government 1

Decentralization trends in OECD countries have generally led to increased investment spending at subnational government level. A number of indicators show an average increasing trend over the last 10–15 years, such as the share of total public investment spending ² at the subnational level ³ that has been rising very slowly but steadily since 1995. Central government transfers to subnational governments have similarly steadily increased since 1995, by an average of 0.7 percent (Blöchliger and Vammalle, 2009). Sixty percent of total public spending on education, 40 percent on health, 30 percent on economic affairs, and 20 percent on social protection is spent at the subnational level across OECD countries (Charbit, 2011; OECD, 2011a). These averages hide not only considerable variations with generally bigger shares for subnational governments in federal countries, but can also not provide a full picture of changes in actual autonomy of governments at subnational levels. Generally speaking though, the crisis has led to the share of public investment to decline significantly in some federal countries (e.g., Austria and Switzerland), while increasing in some unitary ones (e.g., Norway) (Figure 12.1).