{
  "title": "Can They Do It All? Fiscal Space in Low-Income Countries",
  "publication": "IMF Working Papers, May 5, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/05/05/can-they-do-it-all-fiscal-space-in-low-income-countries-44889",
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  "summary": "According to U.N. estimates, low-income countries will have to increase their annual public spending by up to 30 percent of GDP to achieve the Sustainable Development Goals (SDGs), raising the question of whether they can do it all.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- According to U.N. estimates, low-income countries will have to increase their annual public spending by up to 30 percent of GDP to achieve the Sustainable Development Goals (SDGs).\n- The paper develops a new metric of fiscal space in low-income countries that accounts for macroeconomic uncertainty to assess whether those spending needs can be accommodated.\n- Illustrative simulations based on this methodology imply that, even under benign conditions, the fiscal space available in low-income countries is likely insufficient to undertake the spending needed to achieve the SDGs.\n- Improving public investment efficiency and domestic revenue mobilization can somewhat narrow the gap but it will require major efforts relative to recent trends."
    },
    {
      "heading": "Methodology",
      "content": "- Development of a new metric of fiscal space for low-income countries that explicitly accounts for macroeconomic uncertainty.\n- Use of illustrative simulations based on the proposed metric to evaluate accommodation of SDG-related spending needs."
    },
    {
      "heading": "Key Findings",
      "content": "- Spending requirement: up to 30 percent of GDP increase in annual public spending (U.N. estimates) to achieve the SDGs.\n- Even under benign conditions, fiscal space in low-income countries is likely insufficient to meet SDG spending needs.\n- Potential partial offsets:\n  - Improving public investment efficiency.\n  - Domestic revenue mobilization.\n- Caveat: Narrowing the financing gap will require major efforts relative to recent trends."
    },
    {
      "heading": "Policy Implications and Recommendations",
      "content": "- Focus on improving public investment efficiency to get more output from existing public investment spending.\n- Strengthen domestic revenue mobilization to expand the available fiscal envelope.\n- Recognize that substantial and sustained policy efforts are required; incremental changes consistent with recent trends are unlikely to be sufficient.\n\n---\n\n Content in this bundle\n\n- Can They Do It All? Fiscal Space in Low-Income Countries\n  - Can They Do It All? Fiscal Space in Low-Income Countries (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Can They Do It All? Fiscal Space in Low-Income Countries (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/05/05/can-they-do-it-all-fiscal-space-in-low-income-countries-44889"
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    "Authors: Anja Baum, Andrew Hodge, Aiko Mineshima, Marialuz Moreno Badia, Rene Tapsoba",
    "Published: May 5, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475599046.001",
    "According to U.N. estimates, low-income countries will have to increase their annual public spending by up to 30 percent of GDP to achieve the Sustainable Development Goals (SDGs).",
    "The paper develops a new metric of fiscal space in low-income countries that accounts for macroeconomic uncertainty to assess whether those spending needs can be accommodated.",
    "Illustrative simulations based on this methodology imply that, even under benign conditions, the fiscal space available in low-income countries is likely insufficient to undertake the spending needed to achieve the SDGs.",
    "Improving public investment efficiency and domestic revenue mobilization can somewhat narrow the gap but it will require major efforts relative to recent trends.",
    "Development of a new metric of fiscal space for low-income countries that explicitly accounts for macroeconomic uncertainty.",
    "Use of illustrative simulations based on the proposed metric to evaluate accommodation of SDG-related spending needs.",
    "Spending requirement: up to 30 percent of GDP increase in annual public spending (U.N. estimates) to achieve the SDGs.",
    "Even under benign conditions, fiscal space in low-income countries is likely insufficient to meet SDG spending needs.",
    "Potential partial offsets:",
    "Caveat: Narrowing the financing gap will require major efforts relative to recent trends.",
    "Focus on improving public investment efficiency to get more output from existing public investment spending.",
    "Strengthen domestic revenue mobilization to expand the available fiscal envelope.",
    "Recognize that substantial and sustained policy efforts are required; incremental changes consistent with recent trends are unlikely to be sufficient.",
    "**Can They Do It All? Fiscal Space in Low-Income Countries**"
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