Funds limit a country falling short (7)
I believe the answer is:
capital
'funds' is the definition.
(I've seen this before)
'limit a country falling short' is the wordplay.
'limit' becomes 'cap' (capping is a kind of limiting).
'a country' becomes 'Italy' (Italy is an example).
'falling short' means to remove the last letter.
'italy' with its last letter taken away is 'ital'.
'cap'+'ital'='CAPITAL'
(Other definitions for capital that I've seen before include "Kabul or Harare?" , "(Person's) wealth" , "Chief; excellent" , "Rome or Oslo?" , "high in architecture" .)