Public investment efficiency and its impact on sustainable economic development

Abstract

The efficacy of public investment is a critical determinant in the successful pursuit of sustainable economic development. This article contends that the mere scale of public capital expenditure is an inadequate metric; the efficiency with which these funds are translated into high-quality, productive assets is paramount for achieving long-term economic, environmental, and social objectives. The analysis explores the multifaceted relationship between investment efficiency and sustainability, arguing that inefficient investment - characterized by cost overruns, misallocation, and poor governance - not only represents a fiscal drain but actively undermines sustainable outcomes by crowding out productive spending and locking in carbon-intensive, socially inequitable pathways. Conversely, a robust public investment management cycle, fortified by strategic appraisal, transparent procurement, and diligent maintenance, directs capital toward resilient, low-carbon infrastructure and vital human capital projects. The article further examines how digitalization offers transformative potential for enhancing efficiency while embedding circular principles. Ultimately, it concludes that strengthening institutional capacity to ensure efficient public investment is not merely a technical fiscal goal but a foundational prerequisite for navigating the intertwined challenges of climate change, social equity, and enduring economic prosperity.