Aid Business as Usual? How Austria’s Development Cooperation has, so far, Dodged the Populist Bullet

By Lukas Schlögl / Part of the European Development Policy Outlook Series

Austria plays an unassuming midfield position in international development cooperation: stable institutions, a stagnant budget, incremental policy change and a multilateralist orientation. Taking a step back, such ‘aid business as usual’ is surprising. Why, despite tumultuous domestic political change and a strong political influence of right-wing populism, has Austria’s development cooperation remained shielded from politicisation? And: will this last?

What location would you pick for the following two films?

The first film is titled ‘The Turn’. It’s a dark political thriller, featuring plot twists, intrigues, scandals and secret agents. It is set in a country whose political landscape goes through constant disruption. Following a populist turn with anti-immigration and nationalist stances resonating with ever larger portions of the electorate, the country’s post-war centrist consensus is upended. Contentious coalition governments are formed. Parties implode while new ones emerge. The volatile period culminates in high-level corruption scandals bringing the country towards the brink of a state crisis.

The second film, ‘The East-West Wing’, is a slow-paced historical drama about the inner workings of a bureaucracy. Many years ago, a law was passed which outsourced the development cooperation administration to a state-owned public-benefit company. The company goes about planning and funding official development activities in a, more or less, technocratic fashion. Country offices are opened. Every few years, the foreign ministry gradually revises the federal strategy guiding its operations. The core thematic and geographical focus remains relatively constant and so does the core aid budget. Work with international organisations goes on as usual. So far, so boring.

You guessed it: Austria could provide the stage for both films. But how is this possible? How has development cooperation sailed through a political maelstrom without capsizing? Here are three tentative explanations.

Sailing through the maelstrom

First, foreign policy is traditionally an elite-directed field which tends to be protected from some of the forces of day-to-day domestic politics. Austria’s foreign ministry practices a self-reproducing meritocratic culture which still requires from entrants to the diplomatic service an old-school oral exam in French. Within the ministry, aid remains a rather peripheral field. No foreign minister in the past 20 years has made development a central topic, with a certain exception perhaps being Sebastian Kurz who gave the Austrian development cooperation discourse a migration-sceptical and humanitarian spin. Generally, topics related to international development have rarely been taken up by mainstream politicians or the media.

Second, despite a sometimes fiercely populist public discourse, Austria still builds on a legalistic and bureaucratic culture of administration, which is only slowly eroding. Yes, political appointments at cabinet level have increased in influence. But better parts of the ministerial personnel remain long-term appointments giving the apparatus political inertia. Legally, the fundamental goals and modalities of development cooperation have been ‘set in stone’. Add to this that Austria is a small player in the international system with no military power and no colonial history to speak of, so what else could it be than a rule-abiding soft-power oriented multilateralist?

Third, although right-wing populists have enjoyed significant polling and electoral successes, they have proven somewhat ineffective in positions of power. Once in government, they were regularly paralysed by infighting and incompetence. In 2017, the right-wing Freedom Party nominated a former diplomat and political independent as foreign minister. While becoming notorious for her pro-Russian sympathies, she did not dismantle the development agency nor did she redirect ODA or overturn its alignment with global norms. Granted, her time in office was short. Austria’s conservative People’s Party, on the other hand, managed to secure almost uninterrupted executive power over foreign (aid) policy since the late 1980s.

Will the tide turn?

A final film genre: science fiction. So, what does all this mean for the future of Austria’s development cooperation?

There are several shocks which the political system is currently absorbing. The most recent one is Russia’s invasion of Ukraine which has given rise to a new consensus around defence spending that inevitably will have consequences for the development budget. It may also lead to a questioning of the post-war consensus of military neutrality which Austria’s foreign policy doctrine is built upon. The second shock is the Covid pandemic and ensuing cost-of-living crisis, which has nurtured a climate of economic insecurity and inward orientation. The long-term costs of crisis management could put further pressure on the development budget. Similarly, an escalating climate crisis may more and more decrease the financing of global public goods outside the environmental agenda. The final shock comes from the political management of immigration which, so far, has reflated the Freedom Party after every (self-)defeat. Give it enough time and Austria’s right-wing populists may not remain short-lived government dilettantes forever.

Alongside these megatrends, two further factors should be considered. Commercial interests in development cooperation have arguably never been a strong factor in Austria, but they may be even weaker now compared to the days when Austria’s aid projects were more concentrated in Eastern Europe and more blatantly tied to export promotion. Today, organised support for development cooperation, and increasingly more so for humanitarian aid, rests on the NGO sector and can hardly count on a mighty business lobby. Finally, international peer pressure: as a small, rule-following player sensitive to reputational risks in the global arena, it will matter for Austria to what extent other donors adhere to international pledges and norms. If Western European partners let go of the old paradigm of concessional ODA giving and replace it with a more self-interested geo-economic agenda, expect Austria to follow suit.

Lukas Schlögl is Senior Researcher at the Austrian Foundation of Development Research with a focus on development policy and financing for development.

Image: Dominik Ferl on Unsplash

Note: This article gives the views of the author, not the position of the EADI Debating Development Blog or the European Association of Development Research and Training Institutes.

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