‘Old politics, new Challenges’: Austiria’s shifting political landscape

Executive Summary

The Austrian post-war political economy was founded on bipartisan compromise between the two ruling parties; namely, the conservative People’s Party (Österreichische Volkspartei: ÖVP) and the Social Democrats (Sozialdemokratische Partei Österreichs: SPÖ). This arrangement was informed by a unanimous desire to avoid the partisan division that had undermined the stability of the First Republic
(1919-1938) and rendered it vulnerable to totalitarian forces. As such, it necessitated the continual formation of grand coalitions through the years of reconstruction; and even when the ÖVP and SPÖ respectively governed alone in majority administrations between 1966 and 1983, consensus-based policymaking continued to prevail. Both parties became ubiquitous at all levels of society, maintaining close relationships with key institutions such as the business associations, economic chambers and trade unions. As dictated by the Proporz
doctrine, the proportion of votes that the ÖVP and SPÖ won in elections determined bureaucratic and commercial appointments on the local, regional and federal levels.
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