It is often argued that social and economic investments that benefit children and poor households are not affordable or that government expenditure cuts are inevitable during adjustment periods. But there are alternatives, even in the poorest countries.
This working paper, which has been prepared to facilitate the exchange of knowledge and to stimulate discussion, offers an array of options that can be explored to expand fiscal space. These include: (i) re-allocating public expenditures, (ii) increasing tax revenues, (iii) lobbying for increased aid and transfers, (iv) tapping into fiscal and foreign exchange reserves, (v) borrowing and restructuring existing debt, and/or (vi) adopting a more accommodative macroeconomic framework. To serve as a general advocacy resource, the annex provides a summary of the latest fiscal space indicators for 182 countries.