Switzerland’s People Power

Direct Democracy Targets Immigration, Taxes and Gold

Swiss lede

Attention disgruntled voters: If you feel no one’s been listening to your concerns, Switzerland’s got a strategy for you. The Swiss voted on ballot measures that would have abolished special tax rates for wealthy foreigners, required the central bank to hold a fifth of its assets in gold and cut immigration by a third. While all three failed in 2014, people power is on a roll. In previous elections, voters approved measures to limit an influx of foreigners, retain the military draft and let shareholders block executive bonuses. Switzerland’s direct democracy has brought populist politics to the home of multinational corporations such as Nestle and Novartis, and could undermine the stability that has been key to the country’s wealth.

The Situation

There’s been a surge of ballot initiatives: more than 60 since 2000, and there are about 30 more in the pipeline. That’s more than all the ballots in the 80 years after they began in 1891. Historically, Swiss voters backed free enterprise. Yet in the wake of the 2008 financial crisis, when Switzerland bailed out its biggest bank, UBS, voters are taking a more skeptical view of big business. They overwhelmingly approved what became known as the “fat cat” rule in March 2013, giving shareholders in Swiss companies a binding vote each year on executive pay. They voted to impose curbs on newly arriving foreigners in February 2014, despite companies’ warnings about hurting the economy. Still, they turned down a measure to cap executive salaries at 12 times the wages of the lowest-paid employee, as well as a plan for the world’s highest minimum wage of 22 francs ($25) per hour.

Source: Swiss government
Source: Swiss government

The Background

A plebiscite on almost any topic can be called by collecting 100,000 signatures from citizens among Switzerland’s 8 million people. The system calls for national votes, held four times a year, that are legally binding. There are also municipal ballot measures. The national polls can change the constitution or cancel a recently passed law via a referendum (which requires only 50,000 signatures to make the ballot). Turnout averages 40 percent, though it is sometimes higher for controversial measures. In comparison, the U.S. does not permit national initiatives, but individual states have used them to push through controversial changes such as the legalization of marijuana and gay marriage. Critics say measures in California — which require signatures from roughly the same share of the population as Switzerland — have made the state ungovernable, since tax revolts such as Proposition 13 have limited its ability to produce timely budgets.

The Argument

Many of the initiatives have been championed by the Swiss People’s Party, the biggest in parliament, which opposes a concentration of federal power. It argues that the votes give power back to the people and moderate the impact of rich foreign residents. While the system wins praise outside the country for giving voice to popular issues, the boom in initiatives has been met with skepticism at home. Critics say splinter groups are abusing the process, wasting government resources and fostering disillusionment. The votes could undermine the country’s consensus-based political system or enable a “tyranny of the majority” that restricts the rights of minorities. The government and multinational companies say referendums could crimp competitiveness and damage the economy. They could also tarnish neutral Switzerland’s relations with its neighbors, they say, citing the immigration vote and a 2009 measure to ban the construction of new minarets. Once passed, the measures require politicians to amend national laws. That can prove tricky. A 2010 initiative expelling foreigners convicted of serious crimes hasn’t yet been put in place, as politicians disagree on how it can be reconciled with international law.

The Reference Shelf

  • The Swiss government’s interactive guide explains how direct democracy works.
  • The Swiss statistics office has an interactive political atlas showing how people in various cantons voted. 
  • An e-book explaining how government in Switzerland works.
  • A Swiss government list of initiatives that have come up for national vote over the last century.
  •  The website of the Initiative & Referendum Institute Europe has more on initiatives and referenda on the continent.

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First Published Nov. 21, 2013

To contact the writer of this QuickTake:

Catherine Bosley in Zurich at cbosley1@bloomberg.net

To contact the editor responsible for this QuickTake:

Leah Harrison Singer at lharrison@bloomberg.net