Developing economies have an acute need for higher investment. Investment is the engine that builds productive capacity, modernizes infrastructure, sets the stage for job growth, and advances countries toward development and climate goals. Yet as development needs have expanded, investment growth has been in a deep slump—a call to action for policy makers, investors, and development practitioners.

This book presents the World Bank’s most comprehensive assessment yet of investment in developing economies. It explores why investment matters, why it has stalled in many countries, and what it will take to reignite it. 

The book documents how robust invest, ment spurts have historically led to faster growth, higher productivity, and more rapid poverty reduction. But it also shows that investment growth has been sluggish in much of the developing world since the global financial crisis. 

With the right policies, however, developing economies can boost investment.  The book highlights the criticality of good business and governance conditions to attract private investment. It underscores the need for credible fiscal and monetary frameworks and well-targeted public investment. It also stresses the importance of international cooperation to mobilize finance. Reigniting investment is not just a domestic challenge but a global imperative.

PRAISE FOR THE BOOK

“Investment is the cornerstone of economic growth and sustainable development. This volume provides the most comprehensive and rigorous assessment of investment dynamics in emerging and developing economies to date. Drawing on cutting-edge research and rich case studies, the volume explores the drivers of public, private, and foreign investment, highlights the transformative power of investment accelerations, and distills practical policy lessons. At a time when emerging and developing economies face a massive investment shortfall and financing needs are mounting, this book offers both a diagnosis of the challenges and a roadmap for reigniting momentum. It is an essential resource for policy makers, scholars, and practitioners committed to unlocking investment as an engine of inclusive and sustainable development.”

 — Ugo Panizza, Pictet Chair in Finance and Development, Geneva Graduate Institute; and Vice President, Centre for Economic Policy Research

“This is a significant and timely contribution that emphasizes a major global issue —the urgent need for increased investment to boost global development, climate transition, and job opportunities. The detailed analysis is rich in data, insights, and diagnoses of key problems, as well as in the policy responses that should be implemented in many countries over the coming years. The focused examination of emerging market and developing economies (EMDEs), and the interactions among public, private, and foreign direct investment, add valuable insights that address important gaps in the literature on the drivers of economic growth in EMDEs. This book is essential reading for policy makers and researchers.”

— Warwick J. McKibbin, Distinguished Professor, Australian National University and non-Resident Senior Fellow, Peterson Institute for International Economics

“For emerging markets, increasing investment is imperative for fostering growth and addressing global challenges such as climate change. This book convincingly demonstrates the significance of investment accelerations in enhancing economic performance. Additionally, it proposes a set of realistic policy instruments that countries can employ to expedite the pace of investment. The comprehensive analysis makes it a must-read resource for policy makers and academics.”

— Antonio Fatás, Professor of Economics, INSEAD

“What makes this book on investment in the developing world stand apart is the richness of its empirical analysis supported by a data that is impressive in its depth and breadth. The analysis offers a wealth of actionable insights. The book’s policy recommendations are particularly valuable at a time when investment needs are high and urgent but confront strong headwinds.”

— Zia Qureshi, Senior Fellow, Global Economy and Development, Brookings Institution

“No country has sustained growth without investment.  Today, investment—which has been the engine of growth in developing countries for the past half century—is slowing, making future growth elusive.  This book not only documents the slowdown in investment but provides a blueprint for policies to reverse the trend and accelerate growth. These policies are not just good interventions—they are urgent.”

— Shantayanan Devarajan, Professor of Practice of International Development, Georgetown University

“The geopolitical context, alongside increasing debt-sustainability concerns, is making it difficult for EMDEs to sustain the pace of investment they need to secure a sustainable and prosperous future for their citizens. This book makes a compelling case for accelerating investment and for exploiting the complementarity of investment by the public and private sectors. It shows that effective project design and implementation, as well as a conducive business environment, remain critical factors of success. It is essential reading for policy makers.”

— Debora Revoltella, Director, Economics Department, European Investment Bank

“Navigating the complexities of global trade tensions and economic fragmentation is a significant challenge for many developing nations. To overcome this and foster development, a renewed focus on investment is crucial. This book provides comprehensive data, insightful analysis, and practical policy recommendations for emerging market and developing economies (EMDEs). As a professor of economics in the Republic of Korea, a country that has successfully transitioned from an EMDE to a developed economy, I can attest to the importance of strategic investment policies. This book is an essential read for policy makers and researchers seeking to chart a course toward sustainable growth.”

— Sunghyun Henry Kim, Professor of Economics, Sungkyunkwan University

“This book unpacks decades of investment growth and drivers in emerging market economies, drawing on rich data and rigorous analysis. It presents compelling evidence that stronger investment depends on comprehensive domestic reforms to improve institutional quality, enhance human capital, and build absorptive capacity. The lessons matter now more than ever, as emerging market economies must mobilize significantly more private and public capital to engineer digital and green transitions, remain competitive, and continue their pursuit of shared prosperity. For policy makers and researchers alike, this book is both a valuable resource and a timely call to action.”

— Cynyoung Park, Executive Director, The SEACEN Centre

“This book is a timely and essential contribution to the global development literature and policy debate. Drawing on state-of-the-art empirical methods, it offers comprehensive analysis and a robust, evidence-based menu of policy options to reignite public and private investment. It is an indispensable resource for policy makers, researchers, and practitioners committed to advancing sustainable growth and shared prosperity.”

— Ali Bayar, President, ECOMOD

“Credit: World Bank Group. All rights reserved”