Research Paper 5: Lack of courage not a reason for reform backlog
Structural reforms form the basis for sustainable growth and prosperity and therefore also for the long-term financing of the welfare state. However, such reforms rarely take place at an early stage and often only to a limited extent. The research field of New Political Economy systematically examines the drivers of and obstacles to structural reforms. "Reforms are often only initiated when a crisis is already in full swing," says Tobias Thomas, Director of the economic research institute EcoAustria. "But waiting for this is neither necessary nor sensible. Evidence of effective reforms can also be obtained by openly looking at which policy measures have led to good results elsewhere. This can be done in an international comparison or also between the federal states in federalism," says Thomas.
Scientific studies often cite uncertainty about the winners and losers of a reform and wars of attrition between interest groups as obstacles to reform. The reform debate should therefore be based on empirical facts and a strong scientific foundation. However, the lack of courage on the part of politicians does not appear to be the cause of the reform backlog. In a recent study, scientists from EcoAustria, together with the German Institute for Economic Research and TU Dortmund University, took a closer look at the risk appetite of politicians compared to senior civil servants in ministries and voters in Germany: Based on a survey of around 18,000 eligible voters by the Socio-Economic Panel (SOEP), 175 members of the Bundestag and 107 senior ministerial officials, the results show that politicians have a more pronounced risk appetite.
