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Options for Budget Consolidation on the Expenditure Side

Author

Listed:
  • Hans Pitlik

    (WIFO)

  • Kristina Budimir

    (WIFO)

  • Norbert Gruber

Abstract

Numerous studies show that reducing public expenditure is of particular importance to increase the likelihood that a budget consolidation will succeed. In international comparisons the high share of government spending in Austria, relative to its expenditure actually on productive issues, would suggest that there is enormous potential to consolidate on the expenditure side. A closer analysis of the appropriateness and efficiency of expenditure in Austria revealed that above all in the areas of public administration, subsidies and capital transfers, health care and the pensions system there is room for both savings and efficiency gains. Although the consolidation options effective in the short term might have a volume of between € 1.9 and € 2.9 billion p.a., the long-term efficiency gains could be up to €10.7 billion a year, with the proviso that far reaching institutional reforms are undertaken.

Suggested Citation

  • Hans Pitlik & Kristina Budimir & Norbert Gruber, 2010. "Options for Budget Consolidation on the Expenditure Side," Austrian Economic Quarterly, WIFO, vol. 15(2), pages 211-230, July.
    • Handle: RePEc:wfo:wquart:y:2010:i:2:p:211-230
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    File URL: https://www.wifo.ac.at/wwa/pubid/40181
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    References listed on IDEAS

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    1. Andrés Fuentes & Eckhard Wurzel & Andreas Wörgötter, 2006. "Reforming Federal Fiscal Relations in Austria," OECD Economics Department Working Papers 474, OECD Publishing.
    2. Angelika Pasterniak & Hans Pitlik, 2009. "Potential for Savings and Efficiency Enhancement in Public Administration. Results of an International Benchmarking Analysis," Austrian Economic Quarterly, WIFO, vol. 14(1), pages 23-40, March.
    3. Lindecke, Christiane & Voss-Dahm, Dorothea & Lehndorff, Steffen, 2007. "Altersteilzeit: Erfahrungen und Diskussionen in Deutschland und anderen EU-Ländern," Arbeitspapiere 142, Hans-Böckler-Stiftung, Düsseldorf.
    4. Elsa Pilichowski & Edouard Turkisch, 2008. "Employment in Government in the Perspective of the Production Costs of Goods and Services in the Public Domain," OECD Working Papers on Public Governance 8, OECD Publishing.
    5. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, April.
    6. Retzlaff-Roberts, Donna & Chang, Cyril F. & Rubin, Rose M., 2004. "Technical efficiency in the use of health care resources: a comparison of OECD countries," Health Policy, Elsevier, vol. 69(1), pages 55-72, July.
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    Cited by:

    1. Karin Fischer & Rauf Gönenç & Robert W. R. Price, 2011. "Austria: Public Sector Inefficiencies Have Become Less Affordable," OECD Economics Department Working Papers 897, OECD Publishing.

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