Fiscal space is the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government. 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.” 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

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...

(IMF) and the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...

, the

United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...

agencies, e.g.,

United Nations Development Program The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...

World Health Organization The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level of h ...

and

UNICEF UNICEF (), originally called the United Nations International Children's Emergency Fund in full, now officially United Nations Children's Fund, is an agency of the United Nations responsible for providing Humanitarianism, humanitarian and Devel ...

, and the aid organizations, e.g.

Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organization, intergovernmental organisation with 38 member countries ...

. 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, 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 Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenniu ...

. The term featured during campaigning ahead of the

2016 Irish general election The 2016 Irish general election took place on Friday 26 February to elect 158 Teachtaí Dála (TDs) across 40 constituencies to Dáil Éireann, the lower house of the Oireachtas, Ireland's parliament. The 31st Dáil was dissolved by Preside ...

Moody's Analytics Moody's Analytics is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities, separate from Moody's Investors Service. It provides economic research regarding risk, performance and financial modeling, as well as ...

provides monthly estimates of the fiscal space of many countries. They define it as the difference between an estimated upper limit of public debt (beyond which action would have to be taken to avoid default) and actual public debt, expressed as a percentage of

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

or equivalently as the difference between the debt-limit-to-GDP percentage and the actual-debt-to-GDP percentage. The

's 2019

World Development Report The World Development Report (WDR) is an annual report published since 1978 by the International Bank for Reconstruction and Development (IBRD) or World Bank. Each WDR provides in-depth analysis of a specific aspect of economic development. Past ...

on the future of work World Bank World Development Report 2019: The Changing Nature of Work.
/ref> suggests ways governments increase fiscal space in order to prepare for the future of work through investments in human capital and social protection.

Notes

Fiscal policy 2016 Irish general election {{Economics-stub