Fiscal positions in many emerging market and developing economies have weakened considerably since the global financial crisis. This will constrain the room for policy makers in these economies to utilize fiscal policy when the next shock hits. In this talk, Franziska Ohnsorge, Manager within the Development Prospects Group, addressed the following questions. First, what is fiscal space? Second, how has fiscal space evolved in emerging market and developing economies? Third, what are the implications of diminishing fiscal space?