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Austria – Building Capacities Versus Resting on Laurels

Governmental Financial Resilience

ISBN: 978-1-78714-263-3, eISBN: 978-1-78714-262-6

Publication date: 30 May 2017


Unfolding almost a decade ago, the global financial crisis still affects governments all over the world. Austria has been hit only moderately, showing one of the lowest debt and unemployment levels in the European Union throughout the crisis years. However, the crisis’ aftermath affected the financial situation of Austrian local governments significantly. Although they are self-administered and exert high political and functional autonomy, local governments rely heavily on shared tax revenues with the federal level. These shared revenues as well as local governments’ own tax revenues declined, mirroring the economic turmoil following the financial crisis. This chapter aims to explore how Austrian local governments responded to these challenges. It does so by investigating the contextual conditions as well as internal capacities through the lens of financial resilience. All four cases included in the analysis highlighted that institutional conditions and general trends, e.g. tasks devolved from upper levels of government without sufficient compensation, limit their ability to cope with financial shocks. In this context, different patterns of financial resilience can be observed. While two cases initially showed low anticipatory and coping capacities, awareness of decision-makers resulted in building internal capacities and in making necessary changes early or as a response to the shock. The other two, however, seem to rest on their laurels of strong capacities in the past, and to rely mainly on their buffering capacities in reacting to shocks, thus increasing their vulnerability in the future.



Korac, S. (2017), "Austria – Building Capacities Versus Resting on Laurels", Governmental Financial Resilience (Public Policy and Governance, Vol. 27), Emerald Publishing Limited, Leeds, pp. 17-33.



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