The effectiveness of public investment requires not only having sound PIMs, but also having strong institutions at the country level. The latter will also have a positive impact on the cost of doing business and the ability of the government to crowd in private investment. The relationship between the PIMI index and selected governance indicators from Kaufmann, Kraay, and Mastruzzi 2010-regulatory quality, rule of law, control of corruption, and a synthetic indicator obtained from the first principal component of the three variables-is examined. An important message that emerges is that countries with sound PIMs tend to have strong institutions, as captured by our synthetic indicators of governance (figure 2.57). This finding also holds for the various components of the synthetic governance indicators. That is, countries with sound PIMs tend to have greater regulatory quality, improved rule of law, and better control of corruption. Another key message is that some countries in the region exhibit not only high PIMIs, but also high levels of country governance-for example, South Africa, Rwanda, and Botswana. Others show the opposite-for example, Sudan and the Republic of Congo are among the countries with low PIMIs and low levels of governance. This finding holds for all the components of the synthetic index.