Federalism and Cantons

The Swiss welfare state is shaped strongly by federalism. On the one hand, this reduces the Confederation’s scope for action in social policy. On the other hand, it allows cantons and cities to become pioneers in developing the welfare state. 

The Confederation established its social policy system on the basis of existing cantonal and communal social systems. This has led to a strongly fragmented and decentralized welfare state and to a wide variety of provision for those in need, depending on the region, canton and municipality.

Federalism and Social Security in Switzerland

The Swiss federal constitution of 1848 was based on the principle of subsidiarity. Any tasks not explicitly assigned to the Confederation by the constitution remained in the purview of the cantons and municipalities. This federalist principle resulted in drawn-out processes often being necessary for handing over cantonal or communal duties to the Confederation. It was not until the federal constitution of 1874 that the Confederation had the power to regulate factory work. Nonetheless, it still required specific constitutional provisions to enact various forms of social insurance. A number of cantons followed this process with reluctance or even opposed themselves to it. Just like the instrument of direct democracy, federalism had a stalling effect on the development of the Swiss welfare state. This is evident, for example, in the founding history of Suva as well as the establishment of the AHV. Federalism also had an effect on the organization of social insurance. In order to implement national universal systems, such as for the AHV, or health and unemployment insurance, the Confederation drew upon cantonal and communal administrative structures and also incorporated private institutions into the system.

The Role of Cantons and Cities in the Welfare State

Cantons and cities often played a key role in the development of the welfare state, particularly as they led the way for the Confederation with their own socio-political initiatives. This was initially the case for the period prior to the introduction of social insurance at the federal level. In relation to workers’ protection, the Cantons of Zurich, Glarus, St. Gallen, Bern, Basel City and Basel Land, Schaffhausen, Aargau, Ticino and Schwyz began pushing ahead with their own laws in the 1840s, while the Confederation only received the power to regulate factory work with the constitution of 1874

In the case of unemployment insurance, cities and trade unions began making headway with local unemployment funds in the 1880s. At the turn of the century, these were then subsidized by a number of cantons, as well as the Confederation from 1917 onwards. The most significant example of this was the municipal unemployment fund of Bern (1893). There were also early cantonal initiatives in old age provision alongside company pension plans. Voluntary cantonal old age savings plans emerged in places like Neuchâtel in 1898 and Vaud in 1907. The first compulsory cantonal old age insurance was set up by the Canton of Glarus in 1916; additional cantonal plans followed in the interwar period. In 1941, however, cantonal old age insurance schemes only insured five per cent of the population.

In the case of health insurance, city administrations dominated by social democrats, such as in Zurich or Basel, introduced compulsory insurance with relatively generous benefits in the interwar period. However, many cities and cantons did not actively engage in social policy or were prevented from doing so by popular referenda.

The cantons also pushed ahead of the Confederation when it came to developing the welfare state after the Second World War, for instance by introducing children’s allowances in connection with family protection policy. A similar trend emerged more recently in maternity insurance as Geneva and Vaud set up cantonal insurance schemes in this domain in the period between the failed and successful introduction of a national maternity insurance (1999-2004).

The oldest form of social security – welfare aid (formerly called “poor relief” or “welfare”) – lies still largely in the hands of the municipalities, cantons and charitable organizations. Despite harmonization attempts by SKOS, welfare aid in Switzerland remains significantly fragmented. Recipients of welfare aid benefits are confronted with various eligibility requirements and various ranges of benefits. Yet, the cantons have also acted as experimental laboratories for novel social security systems in welfare aid. An example includes the programs for re-integrating the long-term unemployed, which were launched in Geneva and Vaud in the 1990s.

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; Studer Brigitte (1998), Soziale Sicherheit für alle? Das Projekt Sozialstaat 1848–1998, in B. Studer (ed.), Etappen des Bundesstaates. Staats- und Nationsbildung in der Schweiz, 159–186, Zürich.