Effect of spatial nonlocality on the density functional band gap

We show that for a large class of exchange-correlation functionals the local exchange-correlation potential obtained within an optimized effective potential severely underestimates the band gap. On the other hand, the corresponding nonlocal potential obtained from a generalized Kohn-Sham scheme provides a much better description of the band gap, in good agreement with experiments. These results strongly indicate that a local exchange-correlation potential, however good the exchange-correlation approximation, cannot capture the delicate interplay between correlation effects and spatial localization in the KS band structure, unless the (cumbersome) contribution from the derivative discontinuity of the exchange-correlation energy functional is considered.