managing multiple institutions - helmut berger, austria

9th ANNUAL OECD–MEETING OF

PARLIAMENTARY BUDGET OFFICIALS

AND INDEPENDENT FISCAL INSTITUTIONS

Breakout Session B -

Managing multiple institutions

EDINBURGH, April 6th, 2017

Helmut Berger

Austrian Parliamentary Budget Office

2 REPUBLIK ÖSTERREICH Parlament

FUNDAMENTAL TASKS OF FISCAL INSTITUTIONS

• Provide oversight of fiscal performance

• Monitor compliance with fiscal rules/targets

• Prepare or assess macroeconomic and fiscal forecasts

• Perform budget and fiscal analyses

• Ex-post or ex-ante evaluation of fiscal policy

• Assess long-term fiscal sustainability

• Prepare policy costings or provide independent oversight of policy costings

• Provide public advice on budget and fiscal issues

• Enhance fiscal transparency and public discourse

SETTING THE CONTEXT: THE AUSTRIAN POLITICAL AND FISCAL SYSTEM


• The Republic of Austria is a federal state and is composed of nine autonomous

federal provinces, the so called “Laender”

• Legislative and executive powers are shared by the federal and provincial

parliaments and governments; however, legislative fiscal powers are highly

centralised

• Laender and municipalities spend approx. 1/3 of general government expenditure

• On the local level the 2,100 municipalities have the right to self government

• Social partners play an important role in policy making

Federal Government

Fiscal

Council

Ministry of

Finance

Parliament

Court of Audit

Line Ministries

Institute of

Economic

Research

Austrian

Treasury

European Union (Council and Commission)

MAIN ACTORS OF FISCAL GOVERNANCE

Federal States

Municipalities

Statistics

Austria

PMO

Budget

Office

Austrian

National

Bank

BACKGROUND OF INSTITUTIONAL MIX

5

• Long-term well established institutions with a traditional set of tasks and new tasks

of monitoring and judging fiscal coordination between layers of government:

Court of Audit, Statistics Austria, FISK

• Independent institutions for applied empirical economic research with a long

tradition especially in economic forecasting and analyses:

WIFO, IHS

• Well established watchdog for fiscal policy analysis and monitoring:

Government Debt Committee established in 1970, renamed Fiscal Advisory

Council and entrusted with new EU tasks

• New institutions as a result of comprehensive budget law reform:

Parliamentary Budget Office (PBO), Performance Management Office (PMO)

• Traditionally high economic and fiscal expertise and research capacity of social

partner organisations (Chamber of Labour, Federal Economic Chamber)

• Young applied research institutes with clear political agenda

REPUBLIK ÖSTERREICH Parlament

AUSTRIAN INSTITUTE FOR ECONOMIC RESEARCH (WIFO)

• Founded in 1927 by Friedrich August von Hayek and Ludwig von Mises

• The Austrian Institute for Economic Research (WIFO) is an independent

institution for applied empirical economic research and objective political

consulting

• WIFO prepares macroeconomic forecasts and produces all macroeconomic

assumptions used in the federal budget process.

Short-, medium- and long-term forecasts for the Ministry of Finance

Economic assumptions for the annual budget, the mid-term expenditure

framework and the annual stability programme submitted to the European

Commission

• WIFO is funded by the federal government, the state governments, the

Austrian National Bank, the social partners and private institutions, as well as

by specifically funded research

• It has a professional staff of about 100 persons


FISCAL ADVISORY COUNCIL (FISK)

7

• Established as Government Debt Committee in 1970, Fiscal Advisory

Council as of 2013

• Tasks:

Monitoring government compliance with EU and national fiscal rules

Recommendations on fiscal policy to Government and Parliament

Carrying out fiscal policy studies

Shaping public opinion on public finance matters

• 15 independent expert members appointed by: Federal Government (6),

Federal Economic Chamber in agreement with Chamber of Agriculture (3),

Federal Chamber of Labour (3) – members with voting rights,

Austrian Association of Municipalities, Association of Austrian Towns and

Cities and Conf. of Provincial Governors (1 each) – no voting rights

• Austrian National Bank and PBO take part in an advisory capacity

• Austrian National Bank supports Council by running its Bureau

(6 professional expert staff members)


FISCAL ADVISORY COUNCIL (FISK)

8

Products and Services:

• Annual Public Finance Report on Austria’s deficit and debt performance

and sustainability of its debt management, covers federal, regional and

local governments

• Forecast for general government budget for the current and upcoming year

(each spring and autumn) including costing information on important

discretionary measures (i.e. tax reform, refugees)

• Fiscal Rules Compliance Report on compliance of federal and local

governments with national fiscal rules and EU’s fiscal rule framework (in

May and December)

• Fiscal Advisory Council addresses expert community, Parliament and in

particular also the wider public, holds press conferences and provides

press releases

• The annual report is submitted to the Minister of Finance, who presents it to

Parliament where it is discussed in the Parliamentary Budget Committee


PARLIAMENTARY BUDGET OFFICE (PBO)

• Established in 2012

• Main Tasks:

Support the Budget Committee in form of written expertise, analysis and short

studies on budgetary matters presented by government according to budget

law

Prepare brief information and short analysis upon request of Members of the

Budget Committee

Support other Parliamentary Committees regarding impact assessment of

new legislation

Consult Parliament on performance and gender budgeting

• Currently 8 headcounts (6 academic experts);

part of Parliamentary Administration (with independent direct access to MPs)

• PBO provides direct support especially for Budget Committee and

Government independent expertise to Parliament

• Head of PBO always participates in meetings of Budget Committee and may

be consulted in his expert role

PBO CATALOGUE OF PRODUCTS & SERVICES

• Analysis on all budget-relevant draft documents presented by

Government, which are on the agenda of regular Budget Committee

meetings

Medium Term Expenditure Framework and Annual Federal Finance Act

Reports on budget controlling, investment controlling (public enterprises),

performance/outcome controlling, subsidies and financial debt

• Analysis upon request of Budget Committee or its members

• Analysis of impact assessments of new legislation, in particular those

assigned to Budget and Finance Committee or those causing substantial

financial impacts

• Recommendations on development of organic budget laws and

improvement of budget reports

• Consultation services on performance and gender budgeting


MANAGING MULTIPLE INSTITUTIONS

• Clear and differentiated mandates allow “division of labour” and

specialisation in functions, tasks and “clients”:

FISK has specific tasks as an independent body according to EU-

regulation, aims at directly addressing the public and shaping public

opinion, includes a broad view of opinions, has longer processes of

decision making

PBO was a new kid on the block in a well established institutional

environment with traditional functions in respect of the budget process

PBO is an instrument of Parliament, provides government independent

expertise, is closely linked to parliamentary work and the needs of

members of parliament

WIFO has a longstanding tradition of forecasts for budget process and

uses very elaborated macroeconomic models

Statistics Austria aggregates and submits national accounts according to

the European System of Accounts



• Austrian Fiscal Governance System is characterized by “well-established”

formal and informal working relations;

Examples:

Legal provision for role of PBO in FISK consultation (advisory capacity)

Director General of Statistics Austria represented in the FISK

FISK represented in macroprudential supervision board

(Finanzmarktstabilitätsgremium)

FISK is involved in monitoring process of national fiscal rules

Statistics Austria and Court of Audit are involved in the sanction

mechanism of the Austrian Stability Pact (fiscal coordination and national

fiscal rules)

WIFO presentation/consultation of macroeconomic forecasts

Parliamentary Budget Advisory Council on Budget Law Reform

Statistics Austria Professional Advisory Board on Economics

“Jour fixe on budget and tax policy” at the WIFO



• Local institutional environment is characterized by a “small” Expert

Community

FISK and PBO are both rather “small” institutions with a small number

of professional staff

Personal contacts often allow fast and effective cooperation, but

sometimes also impede cooperation

Multiple networks of information exchange between relevant

institutions of fiscal governance

Rather frequent staff exchange and mobility between institutions

Mutual professional support and inherent quality control

BUT: International perspective and networks are important inputs to

the fiscal Governance system to avoid inflexibility



Preconditions to be effective and enduring:

• Procedures for budget preparation and execution are still heavily focused on

Ministry of Finance and Government

• Information asymmetries allow for multiple independent institutions to

challenge and scrutinize Government

• Division of labour can be efficient, good working relationships are important

• Clear legal mandate is helpful to structure and develop formal cooperation

• All results must be mutually accessible and publically available

• Limited overlap of tasks can spur competition and serve as quality control,

duplication however needs to be avoided

• IFI functions and issues to be addressed should fit into local institutional

environment, small institutions however are more vulnerable, mandate and

access to information should be guaranteed in legislation

• Good relationship with “Clients/audience” and responsiveness to their

demands



THANK YOU FOR YOUR ATTENTION

Contact:

Helmut Berger

Head of Parliamentary Budget Office

Parliament, A-1017 Wien, Dr. Karl Renner-Ring 3

Tel. +0043 1 40 110-2889; +0043 676 8900-2889

E-mail: [email protected]

mailto:[email protected]

managing multiple institutions - helmut berger, austria

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