Local and regional governments play an essential role in the provision of public investment. Understanding the drivers and obstacles that subnational governments face is key to implementing their investment plans, including the ambitious plans related to the green transition and digitalisation of the EU economy. Using subnational public investment data for the EU27 over 1995-2021, this paper studies both the short-run drivers and constraints as well as the more structural determinants of subnational public investment. We show that financial development, in particular access to financial services, spurs subnational public investment. We also find a significant positive long-term effect of regulatory quality on subnational public investment. By contrast, administrative delays in construction times and higher debt-to-GDP levels dampen public investment, both in the short and long run.