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Investment is the engine that expands productive capacity, modernizes infrastructure, creates jobs, and drives progress toward development and climate goals.
Yet developing economies face an investment shortfall of historic proportions. Even as development needs rise, investment growth has slowed to about half its pace in the 2000s. Public investment alone cannot fill this gap. Private investment must play the leading role in reigniting growth, creating jobs, and supporting the transition to a more sustainable and resilient future.
This book presents the World Bank’s most comprehensive assessment of investment in emerging and developing economies. It examines why investment matters, why it has stalled, and what it will take to revive it. The analysis highlights that countries that have successfully triggered investment booms combined sound macroeconomic frameworks with reforms that improved the business climate, strengthened governance, and mobilized private capital.
History shows that when investment surges, economies grow faster, job creation accelerates, and poverty declines more rapidly. Reversing today’s slowdown is within reach — through credible fiscal and monetary policies, well-targeted public investment that attracts private capital, and stronger international cooperation to mobilize finance at scale.
Reigniting investment is not just a national priority — it is a global imperative.
PRAISE FOR THE BOOK
"Geopolitical tensions, shrinking aid, and strained public budgets are squeezing investment just as emerging market and developing economies (EMDEs) face soaring financing needs. This timely volume offers a clear and compelling analysis of shifting investment patterns—how they have evolved, why these shifts matter, and how to reverse the decline. It is essential reading for policymakers and practitioners working to foster sustainable growth in EMDEs."
-- Beata Javorcik, Professor of Economics, University of Oxford
"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
"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
"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 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
"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