Switzerland Adjustment Politics Within Institutional Constraints

Giuliano Bonoli and André Mach

in Welfare and Work in the Open Economy Volume II: Diverse Responses to Common Challenges in Twelve Countries

Published in print September 2000 | ISBN: 9780199240920
Published online November 2003 | e-ISBN: 9780191600180 | DOI:
 Switzerland Adjustment Politics Within Institutional Constraints

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Among ‘Continental’ welfare states, Switzerland had and has the highest per capita income and the highest employment ratio in the group of advanced welfare states included in this study. Its export‐oriented industries and services have remained highly competitive; its levels of taxation and welfare expenditures are low; and its labour‐market institutions are highly flexible. Nevertheless, Switzerland suffered severe job losses in the first oil‐price crisis and responded by introducing compulsory unemployment insurance. In the 1980s and 1990s, political pressures from export‐oriented businesses were successful in reducing the tariff and non‐tariff barriers, protecting the sheltered sectors of the Swiss economy, whose inefficiency was beginning to hurt the competitiveness of internationally exposed firms. However, when the demand for neo‐liberal reforms touched on the benefits provided by the — not particularly generous — Swiss welfare state, they were stopped not by the ‘social partners’ as in other consociational/ corporatist democracies, or by electoral shifts in governments, but by the direct democracy of the referendum system. As a consequence, limited retrenchment had to be combined with some important extensions of welfare coverage.

Keywords: competitiveness; direct democracy; neo‐liberalism; oil‐price crisis; protection; referendum; Switzerland; taxation; unemployment insurance; welfare state

Chapter.  16791 words.  Illustrated.

Subjects: Comparative Politics

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