Expanding federalism

Economist: More power for the federal states if they …

In Austria, duplication and a confusion of competencies consume billions.(Bild: gomai(c)fotografie – stock.adobe.com)

Federalism is a symbol of the inefficient Austrian state, and rightly so. But the answer to this should not be to abolish federalism; on the contrary, what is needed is "genuine federalism", says economist Franz Schellhorn. Austria currently practices centralism when it comes to revenue and federalism when it comes to high expenditure.

The budget deficit demonstrates this once again: duplication and a jumble of competencies are swallowing up billions in Austria. While the government is more or less keeping to its austerity course at federal level, spending in the municipalities and provinces is once again getting out of hand. The federal government barely has this under control.