Over the past four decades many countries have undergone multi-level governance reforms to improve their institutional, territorial and public management frameworks. In many countries, this has also translated into reforms that devolved powers, responsibilities and resources to subnational governments. This process of decentralisation has seen subnational governments assume responsibility for many core service and infrastructure provision responsibilities, including areas that are essential for development, such as education, social protection, health, economic development and environmental protection. In turn, they are playing an increasingly significant role in public spending, investment, and revenues but also in addressing significant socio-economic challenges, crises and megatrends.This was starkly illustrated in the wake of the COVID-19 pandemic, which put subnational governments on the frontline of crisis management. More recently, just as they were beginning to support an inclusive, resilient and sustainable recovery from the pandemic, they have been hit by the profound global economic shock that has reverberated from Russia's large-scale aggression against Ukraine. Whilst this is first and foremost a humanitarian crisis it has also precipitated an energy crisis and, in turn, a cost-of-living crisis.Compared to OECD forecasts from December 2021, global GDP is now projected to be at least USD 2.8 trillion lower in 2023 (OECD, 2022[1]). In many economies, inflation in the first half of 2022 reached levels not seen since the 1980s, and those pressures are broadening beyond food and energy prices, with businesses passing through higher energy and transportation costs, as well as rising labour costs from tight labour markets to a broad range of consumer products. For subnational governments, higher rates of inflation, and indeed higher borrowing costs will put further pressure on fiscal spaces, which were already being squeezed by the pandemic, and in turn hamper their ability to deliver essential services and critical investments, in particular those that can drive inclusive digital and green transitions and deal with asymmetric subnational impacts. Understanding the scale of that fiscal space, the multi-level governance frameworks within which subnational governments operate, and the scope and need to address funding and financing challenges, is a pre-requisite to address the legacy of the COVID-19 crisis, the crisis precipitated by Russia's aggression, megatrends, as well as persistent and long-standing spatial inequalities and disparities. This third edition of the OECD/UCLG World Observatory on Subnational Government Finance and Investment is a powerful evidence-based resource that can help drive that understanding and, in turn, address those challenges. In addition to its rich, internationally comparable data and analysis for 135 countries, it provides insights into ways to strengthen the resilience of subnational public finance and provides a specific focus on the impact of the pandemic on subnational g...