Direct Democracy and the Welfare State

Swiss citizens are able to directly influence political affairs and call for a vote by means of initiatives and referenda. These direct democracy instruments have had a substantial effect on the emergence and development trajectory of the Swiss welfare state.

Direct democracy has had a number of different effects on the development of the Swiss welfare state. Firstly, optional referenda launched largely by right-wing conservative parties and economic associations have significantly delayed the introduction of social systems, The countervailing tendency, namely an accelerating effect of social legislation by popular initiatives launched by trade unions and left-wing parties was less effective. Secondly, the referendum option resulted in an associative democracy in which interest groups could have an early influence on political decision-making during the consultation procedure. This mechanism often led to fragmented or market-friendly social welfare laws and gave private welfare organizations comparatively greater importance. Thirdly, the instruments of direct democracy constrained state activity. Notably the funding of social systems through taxation remained relatively low compared to other countries.

The effects of direct democracy can also be seen in all branches of social insurance. Between 1848 and 1998, voters went to the polls a total of 64 times, including 27 referenda, to cast their votes on social policy which accounted for 13 percent of all popular votes. Of the 24 constitutional initiatives on social policy, the people approved only one. Since the 1990s and the end of the Cold War, social welfare matters have become increasingly important, while other topics such as financial policy have lost relevance. Their proportion of all popular votes devoted to social policy grew to 30 percent during the period of 1990-2014.  

In the first half of the 20th century, the introduction of health and accident insuranceold age pensions as well as unemployment insurance were delayed considerably by referenda. After voters rejected the Lex Forrer in 1900, the second proposal made compromises on the part of health insurance and only succeeded to overcome the referendum hurdle in 1912. The first bill for the old age and survivors’ insurance (Lex Schulthess) likewise failed at the ballot box in 1931 due to Catholic and conservative influence. 

Following the Second World War, the welfare state underwent expansion under new conditions. The political negotiations were stabilized by way of social partnership, the compulsory consultation process and the application of the ‘magic formula’ in the government. A sustained period of economic prosperity also offered a more favorable context. Subsequently, neither the AHV, the disability insurance, the compulsory occupational provision nor unemployment insurance were blocked by the electorate through referenda. Popular initiatives launched largely by left-wing parties were able to influence social legislation, despite being either withdrawn or rejected at the ballot box. For instance, in 1955 the Communist Party and the Social Democratic Party submitted initiatives to introduce disability insurance in quick succession, which prodded the Federal Council into preparing an indirect counter project. Disability insurance thus entered into force as early as 1960. In contrast, several referenda prevented the expansion of health insurance in 1974 (initiative and counter project) and 1987.

Since the 1990s, voters have only approved social insurance proposals if they combined improvements in benefits with cost reduction measures. This was the case with the health insurance revision of 1994 and the revisions to old age provision and unemployment insurance in 1995. Maternity insurance only partly reflected this pattern as it was initially stopped by a referendum in 1999 before being approved by the electorate in 2004. Proposals limited to cutting benefits, such as the unemployment insurance reform of 1997, the AHV revision of 2004 and the proposal for occupational provision of 2010, were usually prevented by referenda from left-wing and trade unions.

Literatur / Bibliographie / Bibliografia / References: Obinger Herbert et al. (2005), Switzerland. The marriage of direct democracy and federalism, in H. Obinger et al. (ed.), Federalism and the welfare state. New World and European experiences, 263–306, New York; Wagschal Uwe, Obinger Herbert (1999), Der Einfluss der Direktdemokratie auf die Sozialpolitik, ZeS-Arbeitspapier 1/99, Bremen; Tabin Jean-Pierre (2011), Comprendre la sécurite sociale en Suisse, in J.-M. Bonvin et al. (ed.), Manuel de politique sociale, 41-69, Lausanne.