UNU-WIDER’s Creating the fiscal space for development research area focuses on improving data and the analytical skills of researchers and policymakers around tax and benefit systems and reforming global monetary and financial systems to allow Global South countries to gain the fiscal space they need to invest in the achievement of the Sustainable Development Goals.

Under this research area, we conduct research on tax policy, social protection, the political economy of taxation, and the international financial architecture. This research area has a strong capacity building component aimed at providing revenue authorities in sub-Saharan Africa with the tools and skills needed to strengthen their tax and benefit systems. By achieving the fiscal space necessary for development spending, this area of research supports greater fairness in the international financial architecture and the reduction of inequalities.

Key questions

• How can we improve the design of tax and social protection policies in low-income countries to reduce poverty and inequality in a cost-effective manner? 
• What are the distributional and budgetary effects of indirect taxes, environmental taxes, and fuel subsidies, also when accounting for behavioral effects?
• Does taxation improve governance? Which taxes are more likely to produce a governance dividend? Is it taxation on labour or taxation on capital that leads to a governance dividend?
• What specific measures do Global South governments need to take to increase domestic revenue mobilization, reduce debt-servicing costs, and finance public budgets? How can the international tax architecture be reformed to support them? 

In the 2024-27 work programme, our work on creating the fiscal space for development includes the following projects:

Contributions to the 2024-2027 work programme cross-cutting themes

Climate change is disproportionally affecting Global South countries and governments have fewer resources to mitigate the impact of the changing climate or rebuild after extreme weather events. As this research area seeks to strengthen the capacity of global south countries to mobilize public resources, it will be essential to understand how climate change affected their capabilities and what does climate change mean for their fiscal space.

Policies affect men and women differently and tax policies are no different. The projects under this research area will consider gender in the data collection and analysis to ensure policy interventions contribute to the achievement of gender equality or do not inadvertently disadvantage women or men.  

UNU-WIDER has invested significantly in increasing the availability of administrative tax data to researchers and policymakers. This research area will continue working with revenue authorities in sub-Saharan Africa to build data infrastructure and capacity in the region. We will also pursue access to additional administrative data sources, such as enterprise registers, social protection databases and procurement data.

The United Nations’ 2030 Agenda for Sustainable Development

The research area Creating the fiscal space for development is rooted in the achievement of SDG 17 – Partnerships for the goal. The projects under this area will directly contribute to meeting target 17.1 – strengthening domestic resource mobilization – and target 17.4 – assisting Global South countries in attaining long-term debt sustainability.