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Options for Budget Consolidation on the Expenditure Side

Author

Listed:
  • Hans Pitlik

    (WIFO)

  • Kristina Budimir

    (WIFO)

  • Norbert Gruber

    (WIFO)

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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    References listed on IDEAS

    as
    1. Hans Pitlik & Heinz Handler & Joseph Reiter & Angelika Pasterniak & Thomas Kostal, 2008. "Effizienz der Ausgabenstrukturen des öffentlichen Sektors in Österreich," WIFO Studies, WIFO, number 34659, January.
    2. Andrés Fuentes & Eckhard Wurzel & Andreas Wörgötter, 2006. "Reforming Federal Fiscal Relations in Austria," OECD Economics Department Working Papers 474, OECD Publishing.
    3. 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.
    4. Alois Guger & Thomas Leoni, 2006. "Teilstudie 15: Arbeitsmarktflexibilität und soziale Absicherung," WIFO Studies, WIFO, number 27454, January.
    5. Hans Pitlik, 2008. "Theoretical Key Elements for a Fundamental Reform of Federal Fiscal Relations," Austrian Economic Quarterly, WIFO, vol. 13(1), pages 22-35, April.
    6. Lindecke, Christiane & Voss-Dahm, Dorothea & Lehndorff, Steffen, 2007. "Altersteilzeit: Erfahrungen und Diskussionen in Deutschland und anderen EU-Ländern," Arbeitspapiere 142, Hans-Böckler-Stiftung, Düsseldorf.
    7. 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.
    8. Franz Sinabell & Hans Pitlik & Erwin Schmid, 2009. "Zukunft der Finanzierung und Ausgaben der Gemeinsamen Agrarpolitik," WIFO Studies, WIFO, number 36165, January.
    9. 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.
    10. 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.
    11. Hans Pitlik & Julia Bock-Schappelwein & Heinz Handler & Werner Hölzl & Andreas Reinstaller & Angelika Pasterniak, 2010. "Verwaltungsmodernisierung als Voraussetzung für nachhaltige Effizienzgewinne im öffentlichen Sektor," WIFO Studies, WIFO, number 38606, January.
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    Cited by:

    1. Karin Fischer & Rauf Gönenç & Robert Price, 2011. "Austria: Public Sector Inefficiencies Have Become Less Affordable," OECD Economics Department Working Papers 897, OECD Publishing.
    2. Josef Baumgartner & Serguei Kaniovski & Hans Pitlik & Margit Schratzenstaller-Altzinger & Thomas Url, 2011. "Exports Drive Growth – Domestic Demand Remains Subdued. Medium-term Projections for the Austrian Economy until 2015," Austrian Economic Quarterly, WIFO, vol. 16(1), pages 21-34, March.
    3. Stefan Ederer & Jürgen Janger, 2011. "Promotion of Growth and Employment in Austria within the New European Policy Framework," Austrian Economic Quarterly, WIFO, vol. 16(2), pages 119-131, July.

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