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How can governments move from managing costs to building capability?

The challenge is not just how much governments spend, but whether they invest in things that support long-term priorities and strengthen their ability to deliver.

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Fiscal resilience is under strain as defense costs rise, societies age and borrowing becomes more expensive. Governments can respond by treating public spending as a strategic investment — measured by its impact on residents, productivity and economic growth.

We believe there’s a need and an opportunity to reframe public finance by accelerating a shift from a spending mindset to an investment mindset. That way, the debate moves beyond budgeting cycles toward a new model for how government invests for prosperity.

Mark MacDonald
EY Global Public Finance Management Leader

Investing for a productive state

Investing in strategic digital and technology projects could reduce debt-to-GDP ratios by 5% by 2036 and 8.6% by 2055 while boosting productivity and fiscal competitiveness. Find out more in the latest report in The future of public money project by EY and OMFIF.

Spending smarter: lessons from leading governments

How do high-performing finance ministries invest public money more productively than their peers? Discussing this with OMFIF’s Andrea Correa are Mark MacDonald, EY Global Public Finance Management Leader, and Galen Sher, Senior Economist, Fiscal Affairs at the International Monetary Fund.

2026 Global Economic Outlook: The implications for governments

Trade policies, AI-driven productivity, market volatility, fiscal tightening and demographic shifts all shape the economic outlook. Governments must prepare for slower growth and structural volatility while supporting the growth of AI as a driver of productivity.