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Fiscal realitiesmatter

A recent report by the Independent Expert Group on Debt, Nature, and Climate reveals that many of the world’s 144 developing economies are on an unsustainable fiscal trajectory. Countries cannot invest in their development and social progress if in fiscal distress.

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Regressive taxesharm the poor.

Countries need to consider the implications for social equality and stability as they raise additional revenues for public investment. Regressive taxes harm the poor and destabilize communities. In 2024, youth protests in Kenya stopped a Finance Bill that lacked legitimacy.

Debt Crisis StallsDevelopment

Low -and middle- income countries are burdened by trillions of dollars of public debt, and the list of those approaching a debt crisis is growing fast. Debt payments are eating up the lion’s share of national budgets, leaving little for development priorities.

PhilanthropyNeglects FiscalIssues

These issues are vitally important, but philanthropic investment in tax, debt, and accountability is extremely low compared to total international grantmaking. The OECD estimates that 40 philanthropies spent a total of $11 billion in 2022, but only about $5 million went to just one fiscal area, tax-related issues.

And yet fiscalfixes can unlockuntold millionsmore fordevelopmentpriorities.And yet fiscal fixes canunlock untold millions morefor development priorities.

Welcome toTHE FISCALSPACEWelcome toThe Fiscal Space

The Fiscal Space site is a place for Funders (and others) interested in sectors like climate, education, health, and poverty reduction that have increasingly looked to learn about fiscal policy as a for long-term solution, including in sectors like climate, education, health, and poverty reduction that have increasingly lookeds. We seek to:

Raise awareness of the importance of investing in fiscal issues, including by funders of the Sustainable Development Goals (SDGs).
Discuss how funders can use their grants, voice, and other tools.
Showcase resources by TAI and other stakeholders on the landscape of funding, evidence of impact, case studies, and current news.

Why care about taxes?

An effective tax system not only raises revenues needed for funding public services, but can also support development goals, for example, by helping combat illicit financial flows, reducing inequality through redistribution, and addressing social and environmental objectives by influencing taxpayer behavior. You can see examples of funder theories of change for investing on tax reform here.
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Why care about sovereign debt?

Global sovereign debt is fast rising on the global agenda due to impending debt crises in many developing countries. Debt Justice estimates that 54 countries are currently in debt crisis, while another 57 countries are at risk of a public or private debt crisis or both. Servicing debt eats up government budgets, meaning little is left to meet local needs.
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Why care about accountable, effective public spending?

Too often public resources are being spent unfairly and ineffectively, leaving millions of people without access to quality public goods and services. Transparent and accountable spending is also more immune to corruption.
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TheOpportunityin 2025The Opportunityin 2025

Today, the world faces a $4 trillion financing gap to achieve the Sustainable Development Goals (SDGs). That cannot come from aid alone. Most must be raised by the countries themselves. Governments need to create more fiscal space, defined by the International Monetary Fund (IMF) as the room in a government’s budget to fund national priorities, such as education or climate adaptation, without jeopardizing the sustainability of its fiscal position or the stability of the economy. Governments can create fiscal space by raising taxes, securing outside grants, cutting expenditures, borrowing resources (from citizens or foreign lenders), or borrowing from the banking system (thereby expanding the money supply).

What is fiscal space

At the same time, governments need to consider who bears the costs of reforms. Austerity measures that cut spending to service debts typically hit the poorest the hardest, deepening inequality. Negotiations are underway for the Fourth International Financing for Development Conference (FfD4) – a once-in-a-decade process guided by the United Nations (UN). FfD4 will set the agenda for mobilizing funding for today’s pressing development needs through taxation, borrowing, and international assistance.

This can reinforceongoing efforts to:This can reinforce ongoingefforts to:

Reform global taxation through a UN Tax Cooperation Framework.
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Create new debt restructuring and governance mechanisms.
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Invite you to relevant funder spaces to learn more, including about the ongoing FfD process
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Philanthropists onFiscalPhilanthropists on Fiscal

The ActionAgendaThe Action Agenda

Funder and PractitionerPerspectives

Many exciting ideas are being generated and experiments tested to generate more fiscal space for development and climate finance. Here we offer an up-to-date sampling of perspectives from researchers, advocates, and funders. We will continue to update these.

For more detailed information on the practitioners most active on tax, debt, and accountable spending please don’t hesitate to reach out to TAI.

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What FundersCan Do

There are many things thatfunders can do that willhave a swift positiveimpact, including:There are many things that funders can do thatwill have a swift positive impact, including:

Support stakeholder participation

in fiscal processes at local, national, regional, and global levels. TAI’s funding scan found that civil society can do impactful work, but needs support to be in the rooms where decisions are taken, as do Global South governments, universities, think tanks, and unions.
Invest in evidence and data

to inform stakeholders and the design of potential policy reforms, such as on the progressivity of taxes and tax incentives and considerations for new types of taxes like wealth taxes and digital economy-related taxes.
Provide long-term support

recognizing that securing fiscal equity and sustainability will take time. With longer-term grants, organizations will have the space to hire staff rather than consultants, be ready for emerging opportunities, work closely with communities and media, and more. In addition, funds for field building could lead to better coordination and bridging efforts across tax, debt, and budget accountability communities.
Use your voice and convening power

to draw attention to the importance of these issues and encourage other funders to engage, noting how fiscal challenges risk undermining the impact of existing investments. Philanthropies can also use their voice to stand against corruption in spending, for public participation in policy-making and monitoring, and for the transparency of fiscal data.

How can TAI help?

The Trust, Accountability and Inclusion Collaborative is here to offer pro bono support to funders interested in helping address today’s pressing fiscal challenges.

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For example, we can:

Advise on potential investments building on recently completed field mappings for the tax, deb, and budget fields
Connect you with peer funders who have shared interests and experience of funding on these issues
Invite you to relevant funder spaces to learn more, including about the ongoing FfD process
Share our regular digests of relevant news, research and events.

Don’t hesitateto reach out tous and followTAI on socialmedia.Don’t hesitate to reach out to usand follow TAI on social media.

The FiscalSpaceResourcesThe Fiscal SpaceResources

Catch up on TAI’s own research and opinion on why fiscal matters and the importance of trust, accountability and inclusion in fiscal policy and administration.