Investment: The right framework

OECD Observer

Aly Song/Reuters

Investment has been hit hard by the crisis, yet is vital for a sustainable recovery and future well-being. In 2008-14 private investment ran at some 25% below pre-crisis forecasts. From infrastructure and green energy to improving education and health care, all countries depend on investment in physical and human capital.

This is true of development policies too, with wide infrastructure gaps continuing to affect areas such as transport, renewable energy and skills in most countries, and more private and institutional investment will have to be mobilised to plug them.

Over $1 trillion flowed into developing countries through foreign direct investment in 2012-13. But not all regions have gained as much as they should: Africa’s share of world trade in value added was just 2%, and raising this number is less a question of financial resources–the cash reserves of corporations and the long-term investors such as sovereign wealth funds and pension funds are ample–than of the reforms needed to attract them: that means reducing trade costs, developing regional markets, involving global value chains, stopping corruption and so on.

The OECD’s Policy Framework for Investment helps policymakers devise effective reforms. Used by some 30 emerging and developing economies since its initial launch in 2006, the aim is to help policymakers devise programmes capable of attracting investment funds, and to help them ensure that the investment goes where it is needed. The framework connects a dozen or so policy areas, such as promotion and facilitation; competition; trade; taxation; corporate governance; and human resources. An update in June 2015 has sharpened the focus on infrastructure, small and medium-sized enterprises and global value chains, and incorporates gender issues and green growth.

Whether policymakers want to boost investment in low-carbon activities, engage in long-term investment in infrastructure, or strengthen due diligence in agriculture, the OECD Policy Framework on Investment offers support.

Governments, investment agencies, development banks and private enterprises in countries from Botswana, Burkina Faso and Zambia to China, Peru and Myanmar have all used the framework as a global reference for investment policy reforms.

For them and the OECD, the Policy Framework for Investment is a valuable tool for development co-operation; for facilitating coherence at all levels of government for better policy formulation and implementation; for self-evaluation, peer reviews, knowledge and experience sharing, including for multilateral discussions on investment; and as a source of international good practices.


OECD (2015), “Recommendation of the Council on the Policy Framework For Investment”, declassified document, 4 June, Reference code C/MIN(2015)6/FINAL

OECD (2015), “Using the PFI: From Advice to Action”, information brochure

For these papers and more background, see

©OECD Observer July 2015

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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