Governance

Definition

Governance, institutions (including rule of law and corruption prevention), and legal environment required to support infrastructure investment.

What Does Good Look Like?

Robust governance, leadership and capable institutions that support the rule of law, transparency and consultation, and effective and independent decision making structures for infrastructure investment.

Best Practice Guidance:

OECD Framework for the Governance of Infrastructure (OECD)
Fighting Bid Rigging in Public Procurement (OECD)

Top Performers

Rank Country
Score /100
83.4
1 - Singapore
83.4
83.4/100
82.6
2 1 Denmark
82.6
82.6/100
82.3
3 1 Netherlands
82.3
82.3/100
81.9
4 2 Canada
81.9
81.9/100
81.3
5 1 Austria
81.3
81.3/100

Guidance

Metric

Best Performer

Source

Best Practice

Recovery rate

The recovery rate is recorded as cents on the dollar recovered by secured creditors through reorganisation, liquidation or debt enforcement (foreclosure or receivership) proceedings.

This reflects the strength of creditors' protections. Countries with higher recovery rates will find it easier and cheaper to obtain debt for infrastructure investments. Those countries will be viewed as less risky for debt as investors on average receive a higher percentage of their investment back even when the investments fail.

28.2%

Rule of law

World Governance Composite Indicator reflecting perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. The rule of law reflects whether the law imposes limits of power on the state, private sector and individuals.

The rule of law is the foundation of the rules to resolve disputes, prevent violence and deter corruption. Weak enforcement and corruption decrease the security of infrastructure investment. An investor would not be attracted to a country with corruption and ineffective means to settle disputes, due to the risk of investment being lost without delivering the infrastructure required to create returns and investors being unable to enforce rights to recover investment from counterparties or the state.

20.7%

Post-completion reviews

Whether the country conducts post-completion reviews on infrastructure projects to ensure the forecast outcomes are being achieved.

Ensures procurement and asset valuation risks are managed appropriately by the government through quality and compliance checks. In some cases, these assurance measures also ensure project funding (government grants) are appropriate and that the intended benefits are being realised, allowing proponents to take corrective action if benefits are not being delivered. The threat of an audit or post-completion review encourages project proponents to deliver the project well, obtain value for money and manage probity and other risks effectively.

18.1%

Shareholder governance

Measures the governance practices that protect shareholders through three dimensions: the extent of shareholder rights index (shareholders’ rights and role in major corporate decisions), the extent of ownership and control index (governance safeguards protecting shareholders from undue board control and entrenchment), and the extent of corporate transparency index (corporate transparency on ownership stakes).

Setting and enforcing the duties of disclosure and transparency for the operations of companies provides confidence to invest in them. This applies both to entities that fund, finance or own infrastructure as well as those that deliver infrastructure

15.1%

Political stability and absence of violence score

Measures perceptions of the likelihood of political instability and/or politically-motivated violence, including terrorism. Estimate gives the country's score on the aggregate indicator, in units of a standard normal distribution i.e. ranging from approximately -2.5 to 2.5.

Lack of political stability can provide a strong disincentive for investments in long-term project due to changes of political agenda and the consequent uncertainty regarding the policy and funding support for a project. Policy uncertainty would deter investors from investing, and too frequent changes in priorities may use up money on pet projects that may not proceed instead of improving infrastructure outcomes.

12.8%

Infrastructure or PPP agency

Whether an infrastructure agency exists to coordinate an integrated approach to infrastructure delivery and policy.

Dedicated infrastructure agencies/PPP units can be knowledge centres, ensuring that all the appropriate steps are taken in developing infrastructure projects and facilitating PPP activities. As a dedicated body, they can also promote PPPs within government, and develop and manage effective PPP frameworks. Some bodies can also provide a communication channel to investors, helping bidders and financiers with information and opportunities, as well as provide contract management after financial close.

5%

Best performer

Best practice

Recovery rate

Rule of law

Post-completion reviews

Shareholder governance

Political stability and absence of violence score

Infrastructure or PPP agency

Full Ranking

Rank Country
Score /100
83.4
1 - Singapore
83.4
82.6
2 1 Denmark
82.6
82.3
3 1 Netherlands
82.3
81.9
4 2 Canada
81.9
81.3
5 1 Austria
81.3
81.0
6 1 New Zealand
81.0
80.2
7 1 Slovenia
80.2
80.0
8 4 Japan
80.0
79.5
9 1 Ireland
79.5
79.5
10 1 Australia
79.5
11 4 United Kingdom
79.5
78.5
12 3 Germany
78.5
13 1 Republic of Korea
77.5
76.7
14 1 Finland
76.7
75.8
15 - France
75.8
75.3
16 - Sweden
75.3
17 2 Spain
74.9
17 2 Spain
74.9
74.4
18 1 Malaysia
74.4
71.9
19 1 Portugal
71.9
20 1 Italy
68.2
20 1 Italy
68.2
67.6
21 1 Poland
67.6
22 - Czech Republic
67.6
64.9
23 2 Indonesia
64.9
63.9
24 - Colombia
63.9
25 2 Slovak Republic
63.8
26 1 Chile
63.3
26 1 Chile
63.3
27 1 United Arab Emirates
60.7
60.5
28 2 Mexico
60.5
60.1
29 - Belgium
60.1
59.2
30 1 Tunisia
59.2
58.3
31 1 Greece
58.3
32 4 China
57.5
32 4 China
57.5
57.2
33 2 Uruguay
57.2
34 1 Qatar
56.9
34 1 Qatar
56.9
56.7
35 3 South Africa
56.7
56.7
36 2 United States
56.7
55.3
37 1 Morocco
55.3
55.1
38 2 Russia
55.1
54.8
39 - Jordan
54.8
53.4
40 3 Vietnam
53.4
52.6
41 1 Pakistan
52.6
42 1 Ghana
52.6
42 1 Ghana
52.6
52.4
43 6 Argentina
52.4
51.3
44 2 Senegal
51.3
45 3 Egypt
51.3
45 3 Egypt
51.3
50.2
46 2 Brazil
50.2
49.9
47 4 Cote d'Ivoire
49.9
48 3 Togo
49.3
48 3 Togo
49.3
49 18 India
49.1
49 18 India
49.1
48.7
50 7 Thailand
48.7
48.4
51 5 Saudi Arabia
48.4
47.8
52 5 Turkey
47.8
53 - Benin
47.6
53 - Benin
47.6
47.1
54 3 Azerbaijan
47.1
47.0
55 3 Nigeria
47.0
46.8
56 1 Ecuador
46.8
46.7
57 7 Tanzania
46.7
46.5
58 4 Burkina Faso
46.5
59 - The Philippines
46.5
46.1
60 2 Rwanda
46.1
61 1 Mali
44.2
61 1 Mali
44.2
43.8
62 1 Croatia
43.8
40.3
63 1 Kazakhstan
40.3
39.6
64 1 Cambodia
39.6
39.5
65 3 Romania
39.5
38.5
66 1 Guinea
38.5
37.0
67 1 Myanmar
37.0
68 1 Kenya
35.1
68 1 Kenya
35.1
69 1 Peru
34.5
69 1 Peru
34.5
30.2
70 - Bangladesh
30.2
26.7
71 1 Guatemala
26.7
72 1 Niger
26.6
72 1 Niger
26.6
25.8
73 - Paraguay
25.8
24.8
74 - Ethiopia
24.8
16.7
75 - Angola
16.7
76 - Chad
8.2
76 - Chad
8.2