Assessing the Economic Potential of Public Goods in Azerbaijan

This paper maps the potentials and constraints for public goods provision in Azerbaijan. It examines fiscal instruments, sovereign wealth management, infrastructure investment, environmental commons in the Caspian Sea basin, water management, urban public services, and governance factors that shape delivery. Using a mixed-methods literature synthesis and policy analysis, the paper identifies entry points to increase public good supply, enhance efficiency, and improve sustainability. Key findings: Azerbaijan’s hydrocarbon wealth creates fiscal space for public investment but weak governance and project selection risks reduce long- term public value; environmental public goods in the Caspian Sea and water systems require coordinated regional action; transport and reconstruction investments can yield large social returns if transparency and project appraisal improve.