Fiscal space

Fiscal space is the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government.^[1] Peter Heller (2005) defined it “as room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the stability of the economy.” ^[2]

There are different exact definitions for the term, and different metrics on how to measure it. The most influential definitions of the term come from international institutions, e.g., the

Organisation for Economic Co-operation and Development.^{[citation needed}

]

The crucial point of debate is in how resources that define the 'fiscal space' should be viewed and thus calculated. In particular, unlike the IMF-World Bank,[3]^[4] the UN agencies advocates defining it in relation to the extent to which a government can mobilize resources to a means to combat poverty and achieve the Millennium Development Goals.

The term featured during campaigning ahead of the 2016 Irish general election.^[5]^[6]^[7]

GDP or equivalently as the difference between the debt-limit-to-GDP percentage and the actual-debt-to-GDP percentage.^[8]

The World Bank's 2019 World Development Report on the future of work ^[9] suggests ways governments increase fiscal space in order to prepare for the future of work through investments in human capital and social protection.

Notes

^ Rathin Roy, Antoine Heuty (2009) Fiscal space: policy options for financing human development, UNDP
^ See: Peter Heller Back to Basics -- Fiscal Space: What It Is and How to Get It
^ See: World Bank, "Infrastructure: Lessons from the Last Two Decades of World Bank Engagement," January 30, 2006
^ World Bank, Development Committee, "Fiscal Policy for Growth & Development (FPGD): An Interim Report," April 23, 2006.
^ "What is the 'fiscal space' and why does it matter? It's a phrase you'll be hearing a lot from the political parties in the coming months". 1 February 2016.
^ "Ireland lost in fiscal space during election 2016". 11 February 2016.
^ "Tánaiste Joan Burton told to shove water bill 'up her fiscal space'". Irish Independent. 20 February 2016.
^ S.K. (3 July 2015). "How much is too much?". The Economist. Retrieved 16 June 2016.
^ World Bank World Development Report 2019: The Changing Nature of Work.

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[1] Rathin Roy, Antoine Heuty (2009) Fiscal space: policy options for financing human development, UNDP

[2] See: Peter Heller Back to Basics -- Fiscal Space: What It Is and How to Get It

[3] See: World Bank, "Infrastructure: Lessons from the Last Two Decades of World Bank Engagement," January 30, 2006

[4] World Bank, Development Committee, "Fiscal Policy for Growth & Development (FPGD): An Interim Report," April 23, 2006.

[5] "What is the 'fiscal space' and why does it matter? It's a phrase you'll be hearing a lot from the political parties in the coming months". 1 February 2016.

[6] "Ireland lost in fiscal space during election 2016". 11 February 2016.

[7] "Tánaiste Joan Burton told to shove water bill 'up her fiscal space'". Irish Independent. 20 February 2016.

[SK2015-8] S.K. (3 July 2015). "How much is too much?". The Economist. Retrieved 16 June 2016.

[9] World Bank World Development Report 2019: The Changing Nature of Work.

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