The Reform of the Swiss Modern Fiscal Equalization System

Abstract

  In 1990s, the Swiss fiscal policy had basically kept the trend of the austerity and neoliberalism, as the balance of the federal debt had deteriorated. In most other developed countries the local governments had more financial burdens by the reforms under the similar situations in this period. On the other hand, the Swiss reform about the fiscal equalization system was relatively supported more in national voting by the people in financially weak districts than citizens in financially strong cantons, although the neoliberal trend and the pursuit of austerity in Swiss seem to lead to insufficient subsidies for financially weak cantons as well. Thus, this paper analyzes the political decision making process focusing on the consensus among the cantonal governments by the historical, institutional and political approaches. Consequently, this paper aims to reveal how they prioritized in the political compromises deviated from the initial objects of the reform, and also reveal how the fiscal extreme weakening of the financially weak cantons was prevented as a result.