Sustainable Policies


Economic Policies

With an expensive but successful approach to pandemic mitigation, Austria’s economic policy falls into the upper-middle ranks (rank 18) internationally. Its score on this measure has improved by 0.1 point since 2014.

The government spent large sums of money during the pandemic to keep industries and businesses afloat, and implemented short-term measures designed to save jobs. While costly, these were largely viewed as successful, with the unemployment rate falling back below 5% in late 2021.

Government debt has risen to around 83% of GDP. However, that is lower than in 2015, and the trend is again downward. Tax revenues are strongly skewed toward personal income taxes. A recently passed ecological tax on CO2 has opened a new policy era, but has been criticized as being too weak to make a real difference.

Successive governments have obstructed implementation of the EU-wide financial-transaction tax. The country is an important market for money laundering and organized crime, with more prevention activities needed. A new government strategy enhances the state’s focus on science and research.

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 pandemic subjected the health and education systems to severe stresses. The reliance on recurrent “digital-only” teaching is viewed as a potential driver of increased inequality over the long run. Public trust in the healthcare system declined substantially during the pandemic’s first year. A major recent reform merged nine regional health insurance funds.

Public childcare centers fail to satisfy demand. Families – largely women – bear primary childcare responsibility. The design of welfare transfers keeps mothers out of the labor market. The share of women in key political positions has improved, but gender imbalances are still clear within corporate management ranks.

The openly xenophobic rhetoric of previous governments has been abandoned. However, integration efforts remain deficient, and migrants were disproportionally harmed by the effects of COVID-19. Austria has blocked attempts to develop a binding common EU refugee policy.

Environmental Policies

Having made notable strides in recent years, Austria falls into the upper-middle ranks with regard to environmental policy (rank 17). Its score on this measure has improved by 0.3 points relative to 2014.

The inclusion of the Green Party in government has helped jump-start environmental policy. Plans are now to cover 100% of energy consumption with renewable sources by 2030, and to reach net zero emissions by 2040. A single-price “climate ticket” allows access to all public transport, and a new CO2 pricing policy has been introduced.

Nevertheless, the country has far to go. Greenhouse gas emissions remain strikingly high, having grown by 5% over the past 30 years. Lobbying has kept the price of CO2 certificates low. Industry and commerce are the largest emissions contributors, with traffic a significant source.

The country produces large amounts of waste, but also has a strong recycling sector. Its record on biodiversity is above average in the OECD context. The Green climate minister is seeking to position the country as a future leader on environmental issues.

Robust Democracy


Quality of Democracy

As a period of considerable political turbulence passes, Austria falls into the middle ranks with regard to quality of democracy (rank 19). Its score on this measure has declined by 0.1 point relative to 2014.

The lingering effects of government collapse lasted into the current period, with continuing corruption investigations leading to the chancellor’s resignation. A key issue was the use of government money for partisan benefit in election campaigns. Governments have also used public money to pay fines imposed for violating regulations.

Civil rights and political liberties are generally well protected, but discrimination against women, minorities, migrants and refugees remains problematic. COVID-19 lockdowns proved a severe challenge to civil rights, with court rulings on the issue inconclusive. A short-lived mandatory vaccination law sparked considerable controversy.

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. Access-to-information laws are weak. Campaign finance rules have been progressively tightened, with donations made more transparent.

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 24). Its score on this measure is unchanged relative to 2014.

The ÖVP-Green government initially retained much of the organizational structure and style of its predecessor, including a strong focus on top-level “message control” and the use of “secretary generals” to better control the civil service. Key policies are negotiated informally between the chancellor and vice-chancellor, who are of different parties.

During the pandemic, scientific experts had unprecedented input into governance. Government communication during the early COVID-19 era was viewed at times as a “disaster.” Other pandemic policy weaknesses derived from the country’s complex federal structures.

The federal states are constitutionally weak but politically influential. Delegated tasks are typically funded adequately. RIA is a vital part of the policymaking process, but ex post evaluation is rare. Organized labor has lost power in the legislative process, but opportunities for public participation have expanded.

Executive Accountability

With ample legislative oversight powers and a well-integrated civil society, Austria falls into the upper-middle ranks (rank 16) in terms of executive accountability. Its overall score on this measure has declined by 0.2 points relative to 2014.

Courts have repeatedly strengthened the position of parliamentary investigative committees. Chancellor Kurz’s allegedly false testimony to such a committee produced a judicial inquiry that led to his resignation. Party discipline tends to limit oversight of the government by the allied majority party.

Interest in politics is moderate, but is on the rise among young people. High-quality media products are available, but misinformation is common on social media. The Court of Audit is powerful, with an excellent reputation. The ombuds office is independent, but has some party ties. The data protection authority has acted to block government laws it deems inappropriate.

The major political parties have spent little time developing intra-party democratic procedures. Traditional economic and religious interest groups have been routinely consulted on important measures, although organized labor has lost influence under recent governments.
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