Reflections on the Austrian COVID-19 budgetary emergency measures and their potential to reconfigure the public financial management system

Purpose: Crises constitute stress tests for public sectors, with public financial management (PFM) systems having to respond to emergency needs. In this study, the authors analyze (1) what elements of the Austrian PFM system have been affected by the COVID-19 pandemic and (2) what mechanisms have been applied to close identified gaps in the PFM system and to ensure alignment with budget principles. The authors then reflect on these PFM measures. Design/methodology/approach: The research departs from the pre-crisis configuration of the Austrian PFM system. Making use of a data triangulation strategy, the paper analyses draft laws and regulations with corresponding explanatory notes and impact assessments, transcripts from debates in the federal Parliament and articles and commentaries issued by various stakeholders. Findings: The analysis of five areas relevant to the reconfiguration of the Austrian PFM system shows that the pandemic has caused an external shock, but at the same time, the current system has not been challenged in substance and has been utilized to react to the pandemic—resulting in (ad hoc) modifications. The system has proved robust and crisis responsive; however, in a reactive pattern, emerging ad hoc elements have been integrated, with a number of defensive mechanisms ensuring compliance with budget principles. In addition, in some areas, more proactive actions have been taken for closing system gaps (e.g. risk disclosure). Originality/value: The authors evaluate the likelihood of (proposed, decided and implemented) emerging elements or revisions to a PFM system being embedded into the existing PFM system, alongside reflecting on results and necessary further adjustments.