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State Scene - Joe Poprzeczny: Accountability Swiss style

LAST week State Scene highlighted South Australia’s recent Constitutional Convention, which canvassed the introduction of direct democracy to reinvigorate its politician-centred form of governance, shared by WA, and contrasted this with Switzerland, where people directly control legislation through citizen-initiated referendums (CIR).

Let’s consider some outcomes of Switzerland’s approach to ensuring the people – the voters – rather than only politicians, are the final arbiters on what becomes law.

As stated last week, Swiss political scientists Gebhard Kirchgässner, Lars P Feld and Marcel R Savioz in their book, Direct Democracy: Modern, Successful, Adaptable and Exportable, have summarised and culled economists’ research findings over recent years testing whether direct democracy has meant material benefit for the Swiss.

Numerous researchers have tested Swiss direct democracy empirically by considering issues such as tax avoidance, public spending, public debt and even whether Switzerland’s Federal arrangement has withstood centralising forces.

It’s widely known Switzerland boasts the world’s highest per capita GDP and is renowned for its political stability.

This runs contrary to some uninformed claims suggesting that, where voters decide policy issues, bedlam results.

Since 1848 Switzerland has held more than 500 national referendums, 300 of which the people – not politicians – brought on.

That’s only at the national level. The Swiss also have CIR at cantonal (State) and municipal levels.

Because Switzerland has 26 cantons and hundreds of municipalities, each with varying degrees of direct democracy, it’s an ideal comparative laboratory that allows various influences on public policy to be disentangled and assessed.

Take the following few.

Public spending

In Switzerland, public spending was found to be about 10 per cent lower per capita in municipalities where the people had a direct say over deficit levels.

In those municipalities where direct democracy was absent, tactical expenditures such as politically motivated outlays, generally just before elections, didn’t prevail.

Councillors don’t need to resort to tactical or politically motivated spending where CIR adjudicates budgetary considerations.

Considerable public spending in WA is driven not by real or genuine community needs, but by politicians blatantly buying votes, that is, aiming to be re-elected by appreciative voters.

Such political largesse is, of course, paid for by taxpayers – the people – meaning politicians gain.

Tax avoidance

This is subjected to varying influences. It is lower for older

people and PAYE workers.

But it’s also been found to be less prevalent in cantons with CIR.

One study of CIR’s effects for calendar years 1970 and 1978 showed that, in cantons with direct democracy, individuals on average withheld 30 per cent less tax, indicating CIR enhanced tax morality. 

Where taxpayers have a direct say on taxation or budgetary issues they tend to show greater trust in officialdom.

States’ rights

Federations worldwide show a strong tendency for power to gravitate towards the central government. But not in Switzerland, because the people have a veto over power shifts between tiers of government.

Swiss cantons are consequently untouchable and so are municipalities within cantons.

Put differently there are no arrogant State governments bullying or merging municipalities and the central government cannot usurp cantonal powers.

Public debt

An assessment of debt levels during 1990 for 131 largest municipalities revealed that where citizens voted on financial questions public debt averaged 15 per cent lower per head.

That said it should be noted that this comparison also showed that differences were influenced by unemployment levels, strength of individual treasurers, funding levels obtained from cantonal governments and the median income levels of a municipality’s residents.

The analysis by Kirchgässner, Feld and Savioz considers many other measurable outcomes of Swiss direct democracy, including that it’s a more effective cost saver than privasation.

They compare the idea of ‘direct democracy’ with the idea of ‘representative democracy’ but nowhere does direct actually displace representative.

Switzerland’s parliament hasn’t become redundant.

Legislating remains the work of politicians. The Swiss haven’t usurped legislating from their politicians. Rather, they democratically assist the political process.

Their institutionalised threat of CIR acts as a permanent incentive – a carrot and a stick – for Swiss politicians to consult those who put them into legislatures, the people.

Because of CIR, Swiss voters cannot be treated like mushrooms.

Direct democracy is therefore an extension of their democratic process, giving citizens a say not only on who’ll govern them, but also in the issues of State that politicians consider, from taxation to public debt, to foreign policy.

The result is good law and prosperity. It’s little wonder Switzerland is the second home of capitalism.

It has zero tariffs. The tax percentage of GDP is the fourth lowest in the OECD, after Australia, the US and Japan.

And it is recognised for the highest environmental standards in the world.

Lobbying works in WA, favouring those who can afford it – big business and powerful institutions.

In Switzerland it’s pointless because lobbyists contacting legislators to featherbed particular minority interests can be told favouritism is likely to spark a referendum.

Because Swiss national, cantonal and municipal politicians legislate under the permanent threat of referendum, the people, not the politicians, are in charge.

The choice for WA is to continue having 91 politicians exclusively ruling – the authoritarian approach – or for all citizens to become masters of their own fates by instituting direct democracy, Swiss-style.

 

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