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Reforming Federal Fiscal Relations in Austria

Author

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  • Andrés Fuentes
  • Eckhard Wurzel
  • Andreas Wörgötter

Abstract

This paper reviews the fiscal relations between the three levels of government in Austria and points to the scope for reforming them with a view to improving the efficiency of the public sector. Key areas of public sector activity are subject to complex relations across the three layers of government. Fragmentation of decision-making in some spending programmes, such as hospital care and social assistance benefits, needs to be overcome, concentrating financing and spending responsibilities on one government level. Strengthening co-operation between municipalities as well as amalgamations of small municipalities would allow advantage to be taken of scale economies in the provision of local government services. Stronger tax-raising powers of the municipalities and the states, reform of tax sharing rules and improved budgeting procedures would raise the ability of sub-national governments to match the supply of services to local demand patters and improve accountability to voters. This Working Paper relates to the 2005 OECD Economic Survey of Austria (www.oecd.org/eco/surveys/austria) Réformer les relations budgétaires entre la fédération et les autres niveaux d'administration Ce document rend compte des relations budgétaires entre la fédération et les autres niveaux d’administration en Autriche et met en évidence les possibilités de les faire évoluer en vue d'améliorer l'efficience du secteur public. Les principaux domaines d’activité du secteur public font intervenir des relations budgétaires complexes entre les différents niveaux d’administration. Il faut remédier au morcellement de la prise de décision pour certains programmes de dépenses, notamment les services hospitaliers et l’aide sociale, en regroupant les compétences en matière de financement et de dépense à un seul niveau d’administration. En renforçant la coopération entre les communes et en favorisant leur fusion lorsqu’elles sont de petite taille, on pourrait tirer parti des économies d’échelle pour la fourniture des services publics locaux. En dotant les communes et les Länder de plus larges compétences fiscales, en réformant les règles de partage de l’impôt et en revoyant les procédures budgétaires, on ferait en sorte que les administrations infranationales puissent mieux adapter l’offre de services à la demande locale et aient davantage de comptes à rendre à leur électorat. Ce document de travail se rapporte à l'Étude économique de l'OCDE de l'Autriche 2005 (www.oecd.org/eco/etudes/autriche)

Suggested Citation

  • Andrés Fuentes & Eckhard Wurzel & Andreas Wörgötter, 2006. "Reforming Federal Fiscal Relations in Austria," OECD Economics Department Working Papers 474, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:474-en
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    File URL: http://dx.doi.org/10.1787/880241418571
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    References listed on IDEAS

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    Cited by:

    1. Hoffman, Mitchell & León, Gianmarco & Lombardi, María, 2017. "Compulsory voting, turnout, and government spending: Evidence from Austria," Journal of Public Economics, Elsevier, vol. 145(C), pages 103-115.
    2. repec:kap:iaecre:v:17:y:2011:i:2:p:134-156 is not listed on IDEAS
    3. 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.
    4. Berger, Melissa & Fellner-Röhling, Gerlinde & Sausgruber, Rupert & Traxler, Christian, 2016. "Higher taxes, more evasion? Evidence from border differentials in TV license fees," Journal of Public Economics, Elsevier, vol. 135(C), pages 74-86.
    5. Roberto Fernández Llera & Carlos Monasterio Escudero, 2010. "¿Entre dos o entre todos? Examen y propuestas para la coordinación presupuestaria en España," Hacienda Pública Española, IEF, vol. 195(4), pages 139-163, december.
    6. 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.
    7. Johann Bröthaler & Michael Getzner, 2011. "Fiscal Autonomy and Total Government Expenditure: An Austrian Case-study," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(2), pages 134-156, May.
    8. Erik J. Lundback, 2008. "Medium-Term Budgetary Frameworks - Lessons for Austria from International Experience," IMF Working Papers 08/163, International Monetary Fund.
    9. Hans Pitlik & Kristina Budimir & Norbert Gruber, 2010. "Options for Expenditure-based Consolidation," WIFO Monatsberichte (monthly reports), WIFO, vol. 83(3), pages 247-267, March.
    10. International Monetary Fund, 2008. "Austria; Selected Issues," IMF Staff Country Reports 08/189, International Monetary Fund.
    11. Hofmarcher, Maria M., 2014. "The Austrian health reform 2013 is promising but requires continuous political ambition," Health Policy, Elsevier, vol. 118(1), pages 8-13.

    More about this item

    Keywords

    federalism; finances publiques des états et des municipalités; fédéralisme; intergovernmental relations; relations intergouvernementales; state and local government finances;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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