Executive Summary

Austria has one of the higher rates of GDP per capita levels in Europe. Like other OECD countries, it has however, been challenged by the effects of the economic and fiscal crisis. The Austrian government has improved its processes for strategic planning of public expenditure through budget reforms to set explicit performance targets for all key public services to facilitate the assessment of the costs of public activities against their social benefits and lead to efficient programme design. This output based budgeting will be enforced from 2013. In addition, strategies focused on reducing the administrative burdens on business and citizens are intended to improve the efficiency of the public sector. However, the OECD Economic Review (OECD 2009) also identified that, in the long-term, structural reforms in product and labour markets held the potential to boost output, improve trend growth and raise average per capita income levels. It encouraged an assessment of the impacts of prevailing regulations on cost, productivity and price outcomes in specific areas to identify the resulting impacts on potential supply and employment, and for targeted regulatory reforms to close these gaps. A policy goal of Better Regulation is ensuring that regulation promotes entrepreneurship and a competitive private sector, and achieves policy objectives at least cost to society. This at least points to the potential for Better Regulation strategies to improve the competitiveness of the economy through, for example, improved ex ante and ex post review of the effectiveness of regulation.