Sustainable Policies


Economic Policies

With its rightward shift arrested by the fall of the government, Austria’s economic policy falls into the upper-middle ranks (rank 19) internationally. Its score on this measure has improved by 0.3 points since 2014.

The recent trend of steady economic growth has continued, with unemployment figures remaining low. Before the collapse of the ÖVP/FPÖ government, the coalition passed pro-business reforms seen as reducing organized labor’s power.

The coalition sought to implement tax cuts and bring the budget deficit down to zero; however, these goals proved difficult to reconcile, and efforts were cut short by the government collapse. The tax structure is skewed toward social security contributions and payroll taxes, with net average tax rates for single and married workers is significantly higher than the OECD average.

The government has obstructed implementation of the EU-wide financial-transaction tax. Successive governments have failed to improve university-based research in any significant way.

Social Policies

Austria’s social policies show significant strengths and weaknesses, placing it in the middle ranks in international comparison (rank 20). Its score on this measure has improved by 0.2 points relative to 2014.

The influx of refugees in recent years has introduced major stresses, though the decline in the number of arrivals has led to some relaxation. Asylum rules have been tightened, and though many refugees have left, xenophobic sentiments have been politically instrumentalized. However, the openly xenophobic rhetoric of the ÖVP/FPÖ government was quickly abandoned by its successor.

A mix of public and private health insurance provides for generally good coverage and outcomes. A physician shortage, particularly in non-urban areas, is prompting growing concerns. An insufficient supply of childcare centers, combined with the design of family-support policies, often leaves mothers with childcare duties.

While the social system is generally inclusive, inequality and social divides have deepened. A new rule that would bar EU citizens who work in the country but live in a neighboring country is being reviewed by the European Commission. The share of women in parliament has improved, but gender imbalances are still clear within corporate management ranks.

Environmental Policies

Despite a history of environmentally conscious decisions, Austria falls into the lower-middle ranks with regard to environmental policy (rank 26). Its score on this measure has declined by 0.1 point relative to 2014.

The ÖVP/FPÖ government was less committed than its predecessor to restrictions on carbon-dioxide emissions. It increased the speed limit on some highways, and sought speed up approval for projects deemed to be in the “national interest,” potentially bypassing environmental regulations. Greenhouse gas emissions levels are high, and emissions for heavy trucks and vehicles have not decreased since 2005.

Lobbyist action has also led to policies keeping carbon-market prices low, further diminishing pressure to reduce industrial emissions. The government has remained committed to the Paris climate agreement despite some contradictory signals.

After the collapse of the government and the ejection of the FPÖ from the governing coalition, all parties highlighted the future importance of climate-change policy.

Robust Democracy


Quality of Democracy

Despite the disruption caused by scandal and government collapse, Austria falls into the upper-middle ranks with regard to quality of democracy (rank 15). Its score on this measure is unchanged relative to 2014.

The rise and subsequent collapse of a coalition containing the right-wing populist FPÖ dominated this period. After the FPÖ had taken an openly hostile approach to many media outlets, a party leader was filmed trying to convince a (fake) Russian donor to buy the country’s leading daily newspaper. The scandal highlighted serious campaign-finance loopholes, which the parliament nevertheless proved unable to close.

The FPÖ, through the Ministry of the Interior, also coordinated a police raid on the government agency responsible for monitoring terrorism, an event now under parliamentary investigation. Civil rights and political liberties are generally well protected, but discrimination against women, minorities, migrants and refugees remains problematic.

While voting rights are well developed, the exclusion of non-citizen residents from the vote has become an issue. The broadcast- and print-media sectors are highly concentrated. The role of social media has become increasingly controversial, and the government has made efforts to deal with hate speech.

Good Governance


Executive Capacity

With a Federal Chancellery that coordinates but is not superior to other ministries, Austria’s executive capacity falls into the lower-middle ranks in international comparison (rank 25). Its score on this measure has declined by 0.1 point relative to 2014.

The ÖVP-FPÖ government continued a recent trend toward decision-making centralization. Until the government collapse, intra-governmental disputes were successfully played down, with a strong focus on top-level “message control.” A new level of “secretary generals” was installed above ministerial department heads, reducing ministry and civil servants’ autonomy.

Coalition partners must agree not to oppose one another openly. Inter- and intra-party veto players continue to have significant influence, undermining strategic capacity. The entry into government of the FPÖ, which lacks traditional corporatist ties, diminished the role of pre-legislative consultation. An absence of long-term strategy prevents any systematic ex post evaluation of policy.

The federal states are constitutionally weak but politically influential. Delegated tasks are typically funded adequately. The FPÖ’s euroskepticism led to more conflict with mainstream EU policies, and greater support for Visegrád-state positions, but this is likely to change under its successors.

Executive Accountability

With ample legislative oversight powers and a well-integrated civil society, Austria scores well overall (rank 10) in terms of executive accountability. Its overall score on this measure is unchanged relative to 2014.

Opposition parties have comparatively new and growing investigative powers, expanding parliamentary oversight capabilities. However, party discipline and government-party majorities generally limit executive monitoring in practice. The Court of Audit is underfunded but independent, and the data-protection office also acts independently.

Public discourse has shifted in favor of increasing citizens’ role in decision-making processes, but the ÖVP-FPÖ government did not follow promises to make plebiscites easier to secure. Social media “bubbles” are fragmenting the public discourse. An expected reworking of the public-media law following criticism by the right-wing FPÖ was abandoned following the government collapse.

While nomination authority within the center-right ÖVP has become highly centralized, the SPÖ has given party members a stronger role in internal decisions. Traditional economic and religious interest groups have been routinely consulted on important measures, with some notable recent exceptions.
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