No free beer when frugal Swiss get their say

Tue Jul 17, 2012 6:51am EDT
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By Caroline Copley

GLARUS, Switzerland (Reuters) - On a soggy Sunday in May, some 6,000 residents of the Swiss canton of Glarus gathered in a public square to have their say on whether to raise the local transport budget, ban attack dogs and reintroduce free burials.

Dating back to 1387, Glarus is one of only two remaining Swiss community assemblies or 'Landsgemeinde' - a forerunner of the country's system of direct democracy, established in 1848, which gives citizens the final say on almost every single policy put forward at a local, cantonal or national level.

The model is gaining attention in neighboring Austria and Germany - as well as further afield - as politicians look for ways to counter a crisis of legitimacy while voters baulk at unpalatable austerity measures to cut soaring debts.

Swiss research shows that giving citizens a direct say over how their taxes are spent leads to lower public debts, more cost-efficient services and even less tax evasion.

"Because Swiss citizens feel they can control politicians' spending through referendums, they are more prepared to give the government money and have a more positive attitude towards the state," said Daniel Kuebler, co-director of the Centre for Democracy Studies in the northern Swiss town of Aarau.

To be sure, direct democracy is not the only driver of the Swiss success story. The country's neutrality, bank secrecy, liberal labor market, low taxes and stable government have all played their part in drawing investment and driving growth.

But the system has forced politicians to be more frugal than elsewhere. Switzerland recorded budget surpluses throughout the financial crisis despite having to bail out flagship bank UBS, while lawmakers in countries like Greece - the birthplace of democracy - ran up unsustainable debt piles.

"In the cantons and municipalities we have a financial referendum, which means as a politician I keep an eye on spending because I know afterwards I'll be asked, 'Why did you to that?'" said Andrea Bettiga, mayor of Glarus, a canton nestled in the mountains of east central Switzerland.   Continued...