Options for Budget Consolidation on the Expenditure Side

Hans Pitlik, Kristina Budimir and Norbert Gruber
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Kristina Budimir: WIFO
Norbert Gruber: WIFO

Austrian Economic Quarterly, 2010, vol. 15, issue 2, 211-230

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.

Keywords: administration reform; budget consolidation; expenditure reduction; savings potential (search for similar items in EconPapers)
Date: 2010
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