Even though the term fiscal space is new, the concept itself is old. The term means different things to different people in development, financial and aid communities. Peter Heller (2005) defined it “as room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the stability of the economy.”
The crucial point of debate is in how resources that define the 'fiscal space' should be viewed and thus calculated. In particular, unlike the IMF-World Bank, the UN agencies advocates defining it in relation to the extent to which a government can mobilize resources to a means to combat poverty and achieve the Millennium Development Goals

Millennium Development Goals

The Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...

(MDGs).

Most influential definitions

The most influential definitions of the term “fiscal space” come from international institutions, e.g. the IMF and the World Bank, the United Nation agencies, e.g. UNDP, WHO, and UNICEF, and the aid organizations, e.g. OECD. There are however, main differences between the those definition.