Does climate-responsive public investment management facilitate infrastructure investment? Evidence from the IMF’s C-PIMA in Sub-Saharan Africa

Abstract

Sub-Saharan African (SSA) countries face persistent infrastructure deficits and mounting environmental pressures, underscoring the need for climate-responsive public investment. One institutional response to these challenges is the IMF's Climate-Public Investment Management Assessment (C-PIMA), a diagnostic framework that integrates climate considerations throughout the public investment management cycle. Leveraging the staggered rollout of C-PIMA across 22 treated and 11 control SSA countries between 2022 and 2024, this paper examines whether participation in the assessment is associated with changes in infrastructure investment. We estimate a difference-in-differences model using panel data for 33 SSA countries over the 2015–2024 period (330 country-year observations), with standard errors clustered at the country level. Formal tests indicate no statistically significant differences in pre-treatment trends, despite differences in baseline investment levels between treated and control countries, thereby satisfying the parallel trends assumption. Using multiple two-way fixed-effects specifications, we find no statistically significant effect of C-PIMA participation on aggregate infrastructure investment. Instead, pre-existing government effectiveness emerges as an important institutional factor positively associated with investment performance. Regional spillover analysis further reveals a marginally significant negative neighbour effect. The absence of detectable C-PIMA effects over the limited post-assessment period likely reflects the time required for institutional reforms to translate into observable aggregate investment outcomes. Nevertheless, as C-PIMA becomes increasingly embedded in the climate finance architecture and IMF-supported reform programmes across climate-vulnerable countries, understanding whether institutional diagnostics ultimately lead to more climate-responsive public investment remains essential for informing climate finance allocation and the design of public investment management frameworks.Key policy insightsPre-existing government effectiveness is an important institutional factor associated with infrastructure investment performance, suggesting that countries with weaker institutional capacity may need foundational reforms before climate diagnostics can effectively translate into improved investment outcomes.Institutional diagnostic frameworks require sufficiently long evaluation horizons to determine whether recommended reforms translate into measurable aggregate investment outcomes.C-PIMA assessments should be complemented by sustained follow-up technical assistance to support implementation of diagnostic recommendations and prevent assessments from remaining standalone reports.Regional coordination mechanisms can help mitigate resource competition and adverse spillovers when diagnostic frameworks are deployed across Regional Economic Communities.