Swiss lede

Switzerland’s People Power

Direct Democracy in the Home of Nestle and Novartis

By | Updated May 18, 2014

Attention disgruntled voters: If you feel no one’s been listening to your concerns, Switzerland’s got a strategy for you. Swiss voters have approved ballot measures to limit immigration, let shareholders block executive bonuses and keep the military draft. People power is on a roll, with plans for votes to guarantee a basic income for every citizen and require the central bank to hold a fifth of its assets in gold. Switzerland’s direct democracy has the potential to alter the home of Nestle and Novartis, drive away multinational corporations and undermine the stability that has been key to the country’s wealth.

The Situation

On Feb. 9, voters narrowly approved a measure to curb the inflow of foreigners, which account for more than one in five workers. There’s been a surge of ballot initiatives: more than 60 since 2000 and about 20 more in the pipeline. That’s more than all the ballots in the 80 years after they began in 1891. The global financial crisis added to the momentum, as Switzerland bailed out its biggest bank, UBS. After Novartis proposed a $78 million payout to its outgoing chairman, Swiss voters 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. The usually pro-business Swiss voters turned down a measure to cap executive salaries at 12 times the wages of the lowest-paid employee. While many of the proposals don’t pass, they help drive political debate at home and in other countries. A measure to create the world’s highest minimum wage of 22 francs ($25) per hour, or 4,000 francs a month, was defeated in May, though it prompted discussion about fair pay and the relationship between the government and free enterprise.

 

The Background

A plebiscite on almost any topic can be called by collecting 100,000 signatures from citizens among Switzerland’s 8 million people. That’s roughly the same share of the population needed to put a measure on the ballot in California, where critics say the initiatives have made the state ungovernable. Germany and Austria also give citizens the right to make proposals. The Swiss system is different because the national votes, held four times a year, are legally binding. The 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. The U.S. does not permit national initiatives, but they have been used in individual states for tax revolts, such as California’s Proposition 13, and to legalize marijuana and gay marriage.

The Argument

The force behind the Swiss executive pay measure was the Social Democratic party, the second-biggest in parliament, while others have been championed by the Swiss People’s Party, which opposes a concentration of federal power. They argue the votes give power back to the people and moderate the impact of rich foreign residents. While the system wins praise outside the country, the boom in initiatives has 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 could restrict 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, 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.

(First published Nov. 21, 2013)

To contact the writers 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