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I have a bare concrete block unfinished basement. I have zero moisture problems (it's a 2007 construction with exterior waterproofing applied to the concrete along with a buried perimeter drain). The point is, I am not concerned with adding waterproofing to the interior.
My main goal is to brighten the interior as much as possible. Since this is for a workshop, I'm not worried about a smooth finish. What's going to give me the most bang for my buck?
Painting the walls will help, but if your workshop is anything like mine, you're going to cover a large percentage of the wall area with workbenches, peg boards, machines, shelves, etc. And all the paint in the world won't help if you don't have adequate light sources in the first place. So spend money first on lighting, and then on paint if you have funds left over. Using higher quality lighting, and preferably several different types of lighting, will make working easier and more pleasant, so it'll be money well spent.
White paint is all you really need.
You can also add some plywood to a wall as a pseudo-pegboard but that is your call.
This may not be worth doing, but a white ceiling will reflect your lighting down where you want it instead of letting it get absorbed by the brown wood up in the joist bays. It also gives you good non-directional lighting (especially if the walls are also white)
However, sheetrocking the ceiling in the basement is not an extreme that most people want to go to, so they just make do with crappy light.
Paint certainly helps reflect light into a room better than concrete, but as to the type to use, best to ask the paint department at your hardware store.
I wanted to add this:
One important consideration in work areas is not just the type and brightness of lighting, but placement. A superb light source is just about worthless when it's behind you, casting a shadow.
When I rebuilt my (small) workshop, I had intended to keep a large fluorescent light in the center of the room, but my friend suggested I ditch it for some overhead recessed lighting placed directly over the countertop areas. The improvement was immediately apparent: having several lights in key locations was much better than trying to fill the room from a central point.
4" to 5" LED-based recessed lighting was what I used. At ~$50 each they weren't inexpensive, but they have an estimated life of 20 years and provide excellent light without a yellowish tint.
You can get concrete paint / sealer to go straight on without primer. I saw a basement one time where the wall was mostly white, but some of the blocks were different colors, Giving it a decorative look.
If painting the walls and ceiling white isn't enough and you don't want to be using electricity to light your garage throughout the day, then you may want to consider building yourself a light pipe.
It should only require some cheap chrome effect plastic sheeting with clear plastic for the collection and distribution apertures, to bring plenty of real daylight into your basement.
Remember that in bright sunlight, a square meter provides about 100,000 lumens of light, so even if you only have a fifth of that, you could collect and distribute as much light as around 20 x 18W compact fluorescent lights.
