3b Raoul Switzerland

Government Accountability in Switzerland: 

Government Accountability in Switzerland Raoul Blindenbacher Forum of Federations International Conference on Fiscal Decentralization May 3-4, 2006, Islamabad-Pakistan

Geographic location: 

Geographic location

Population and Cultures: 

Population and Cultures 7.3 million inhabitants of which 20% are foreign nationals 4 main languages 64% German 20% French 6,5% Italian 0,5% Romansh 9% other 2 main religions 42% Roman Catholic 35% Protestant 8% Muslim and other 15% none

Switzerland: 

Switzerland A small multi-ethnic, multilingual and multi-confessional nation shaped by the will of its people A federal state since 1848, constituted by the people and the cantons A federation from the bottom up Diversity in unity

Three Political Levels: 

Three Political Levels The Confederation 2,873 Municipalities 26 Cantons

Subsidiarity: 

Subsidiarity Local problems have to be solved at the cantonal or municipal level National concerns need national solutions

Public Sector Expenditure: 

Public Sector Expenditure

Public Sector Revenue: 

Public Sector Revenue

Fiscal Equivalence: 

Fiscal Equivalence No representation without taxation No taxation without representation

Direct Democracy: 

Direct Democracy Elections Voting Initiatives Referendums

Direct Democracy in Public Spending : 

Direct Democracy in Public Spending On the federal level Tax sources and maximum tax rates fixed in the federal constitution „brake to debt“ forces parliament to restrict spending no budget referendum and no referendum on specific financial decisions On the cantonal level Different forms of budget and financial referenda Some cantons have a “brake to debt” On the municipal level Fixation of the tax rates and the user charges by the citizens Mandatory budget referendum in most municipalities

Critical review : 

Critical review Strong points Relatively low tax burden Strong fiscal competition between the cantons High stability without many stop and goes Differences in the service level Good identity of the citizens with their cantons Weak points Tax burden between the cantons differs to much Slow political system Many inefficiencies, due to wrong incentives in the transfer system Creeping centralization Differences in the service level

Concluding Remarks : 

Concluding Remarks Favoring federalism means accepting differences The principle of subsidiarity moves political decisions closer to the citizens Fiscal equivalence ensures that those who decide have to bear the financial consequences of their decisions Direct democracy guarantees direct government accountability to citizens

Reform of Financial Equalization and Task Allocation: 

Reform of Financial Equalization and Task Allocation Financial equalization Resource Equalization Cost compensation Reallocation of tasks Disentanglement of tasks and financial flows New forms of cooperation