This Inside the Institutions looks at the World Bank and IMF Debt Sustainability Framework (DSF) for low-income countries (LICs) and evaluates its impact on LICs’ ability to maintain fiscal space for development and climate goals. It addresses the LIC DSF’s narrow definition of debt sustainability, its unrealistic growth projections, its ties to fiscal consolidation, and the inherently political nature of debt sustainability assessments given the lack of an independent debt workout mechanism. […]