Potential for Savings and Efficiency Enhancement in Public Administration. Results of an International Benchmarking Analysis

The frequently expressed assumption that there is significant savings potential in Austria's public administration is based on the general notion that Austrian bureaucracy is "too large" and/or "too expensive". In the context of ongoing discussions on administrative reform, this study compares administrative expenditures in Austria with expenditures in other EU and OECD countries. Independently of the definition of administrative expenditures selected, Austria generally falls into the international mid-range, with high savings potential found in Austria's general administration. Depending on the country of reference examined, and under the assumption of equal quality and range of administrative services among countries, we find a theoretical efficiency reserve of ¾ to € 2½ billion – even when taking into account diseconomies of scale of Austria as a small country. Based on an international performance and efficiency comparison, we still find significant efficiency reserves in Austria's general public administration. WIFO estimates point toward another € ½ billion of additional savings potential that could be attained by reducing the complexity of legislation and administrative processes.