The institutions of direct democracy

This chapter deals with the third and in many ways most crucial institution of the Swiss political system: direct democracy. The instruments of direct democracy are not exclusive to the Swiss, in fact an ever growing number of democratic regimes use the referendum device and forms of popular initiatives (Butler and Ranney 1994; Gallagher and Uleri 1996; Budge 1996; Mendelsohn and Parkin 2001). However, nowhere are these more developed than in Switzerland. A comparative glimpse at the (numeric) importance of direct democracy at the national level reveals that Switzerland comes first among all 47 Council of Europe member states (Schmitter and Trechsel 2004: 80). Between 1960 and 2003, a total of 321 referendums were held at the national level in Switzerland. This exceeds by a factor of six the total of those coming second and third on this list, i.e. Liechtenstein (58 referendums) and Italy (57). Also, and unlike anywhere else, the Swiss institutions of direct democracy embody a truly system-formative device, greatly impacting on party competition, government, Parliament, the legislative process and policy making at all levels of the federal state.

Well before the creation of the federal state in 1848, various forms of direct-democratic institutions existed at the cantonal and municipal levels. Although early forms of local democracy go back as far as the twelfth century, it was primarily through the reception of ideas stemming from the French Revolution that direct democracy was extended, modernized and institutionalized at the cantonal level (Kölz 1992).

The gradual consolidation

We now turn to federalism, yet another fundamental institution that underpins the Swiss political system. As discussed in chapter 1, Switzerland's modern federal state was created in 1848 following the two consecutive collapses of the former Confederation. Similar to the transition from the Articles of Confederation to the Federal Constitution of the United States in 1787, the transition from the Confederation to the federal state in Switzerland was revolutionary in the sense that it abolished the unanimity principle and replaced it by a system of qualified majority for amending the supreme law. In both cases, this ‘federalist deficit’ – the unanimity principle for constitutional change – could therefore be overcome (Trechsel 2005). However, in 1848, the federal level of government in the newly created state was extremely weak, as the cantons were able to preserve significant parts of their power. According to Stepan (1999), Switzerland – together with the United States and Australia – fits into the category of ‘coming together’ federalism, where the creation of the federal state is based on a largely voluntary agreement. The creation of the Swiss federal state is based on the logic of relatively autonomous units that ‘come together to pool their sovereignty while retaining their individual identities’ (Stepan 1999: 23).

Introduction

The presentation of the party system allows us to get a first idea of the political forces that determine Swiss politics. In a comparative perspective, three characteristics of the Swiss party system have long been salient – its fragmentation, its relative stability and its domination by parties of the moderate right. As Kerr (1987: 123) observed, the ‘dispersion of political power finds its fullest expression in a highly fragmented party system’. The fragmentation has been typical for the system as a whole as well as for each party taken separately. It has its origin in the large number of social and cultural cleavages, in the federal structure of the Swiss state and in the effects of the electoral system. Political stability is a result of the integrative force of the institutional framework and of the consensual political culture. Switzerland has long provided one of the main examples for Lipset and Rokkan's (1967) ‘freezing hypothesis’, according to which contemporary party systems still reflect the cleavage structure of the European societies at the end of World War I. The traditional weakness of the Swiss left and the domination by parties from the moderate right can at least in part be explained historically by the cultural dividedness, the early industrialization and the early democratization of the country (Bartolini 2000). However, as we will show in this chapter, in the course of the 1990s, the Swiss party system started to change and its volatility increased – with profound effects on the configuration of power in Swiss politics.

Introduction

This chapter provides an overview of the Swiss system of government and its two branches, the legislative and the executive. We will first present the structure and functioning of the Federal Parliament before having a closer look at the Federal Council, the executive body of the Confederation. This will be followed by a discussion of the relationship between the two and the current problems they are facing. We will conclude this chapter with an assessment of possible options for reforming the Swiss system of government.

The Federal Parliament

In chapter 3 the reader was provided with the most basic information concerning the set-up of the Federal Parliament. In this chapter we go further and present a more detailed picture of the Swiss Parliament's structure and role. The Federal Parliament is the highest authority of the Confederation, subject to the rights of the people and the cantons. In academic literature, a classic distinction is made between parliaments of work and parliaments of debate. While the latter could characterize the British House of Commons, where major political decisions are taken following plenary discussions, the Swiss Parliament clearly belongs to the first category: it is a parliament of work; the bulk of work is undertaken within committees, outside the plenary chamber (Linder 1999: 195; Ochsner 1987). Other chief examples of parliaments of work include the US Congress and the European Parliament. According to Lüthi (1987: 88), Swiss MPs spend more than 70 per cent of their time working for parliamentary committees.

State formation

Until the French Revolution, the Swiss Confederation remained no more than a loose alliance of thirteen cantons with strong ties to allied territories such as Geneva, Grisons or Valais, plus subject territories (e.g. Vaud, Argovia, Thurgovia, Ticino or Valtellina) of their component units or of the federation as a whole. The Confederation exercised only limited governmental capacity. The only stable institution that the Thirteen and their allies maintained was a permanent assembly of delegates – the Diet, which met regularly in order to discuss matters of common interest, especially of war and peace. Together with the ancient pact from the thirteenth century and some other agreements, the national peace treaties, concluded after the religious civil wars in the sixteenth and seventeenth centuries, constituted the fundamental law of the Confederation (Körner 1986: 398). Most importantly, in the first peace of Kappel in 1529, which had put a temporary end to the war between the cantons that had converted to the new Protestant creed and the cantons that remained Catholic, the belligerents had promised to no longer interfere in each other's religious affairs. The formula chosen already stated the principle of what would later become a ‘defensive’ kind of federalism. The second peace of Kappel confirmed the preceding formula in 1531: each camp promised to respect the religious choices made by the other one.

Introduction

Neutrality constitutes one of the three fundamental institutions characterizing the Swiss political system. Today, only a few states in the world can be considered ‘neutral’ and in Europe only Austria, Finland, Ireland, Liechtenstein, Sweden and Switzerland belong to this category. Switzerland's neutrality, however, is the most longstanding. Historians of neutrality, such as Paul Schweizer (1895) and Edgar Bonjour (1965), believe that the sources of Swiss neutrality reach back as far as 1515, the year in which the Swiss armies suffered a major defeat against the armies of François I, King of France, at the battle of Marignano. More recent research on the history of neutrality challenges the assertion of such a longstanding tradition, showing that the latter is disputable (Suter 1999). Scholars agree, however, on the crucial role of the Congress of Vienna in 1815 in relation to Swiss neutrality. It was during this watershed event, as the map of Europe was being redrawn in the aftermath of the Napoleonic wars, that Swiss delegate Charles Pictet de Rochemont succeeded in persuading the great European powers to recognize and guarantee Switzerland's self-imposed ‘permanent and armed neutrality’ (Widmer 2003).

Since 1815, the principle of neutrality has unquestionably been the keystone of Switzerland's foreign policy. Equally unquestionable is the fact that neutrality never constituted a goal per se but was considered to be a means to an end, or rather two ends: preserving Switzerland's independence from external threats and maintaining internal unity.

Introduction

As we have seen, Swiss ‘consensus democracy’ is characterized by a high degree of power sharing between different institutions and political actors, and by a large number of veto points, where policy proposals can be blocked by coalitions of opposing actors. Following Neidhart's (1970) well-known argument, we have already pointed out that the direct-democratic opening of the Swiss political system has led to the transformation of a ‘plebiscitary democracy’ into a ‘negotiation democracy’ (chapter 4). In other words, all actors capable of making a credible referendum threat have been integrated into the decision-making process. This includes not only the major political parties that have all been integrated into a stable, grand coalition (see chapter 5), but also major interest groups, the cantons and even social movement organizations, which are usually integrated from the start into elaborate pre-parliamentary consultation and negotiation procedures.

As a result of its inclusive and complex character, the political decision-making process in Switzerland has traditionally been reactive, slow and incremental (Kriesi 1998a: 293–7). Thus, decision making with regard to major societal problems is usually only taken up under immense external pressure – either from the international environment, or from exogenous domestic sources such as the economy or the citizens. Moreover, the decision-making process usually takes a very long time. Poitry (1989) calculated the average duration of such a process for all the proposals adopted by Parliament during the legislative period 1971–6.

Introduction

Austrian post-war politics until the 1980s was a classic example of stability. For almost forty years after 1945, either the Social Democrats (SPÖ) or the Christian Democrats (ÖVP) governed the country: from 1945 to 1966 together in a grand coalition, the type of government most often associated with Austria. From 1966 to 1983, first the ÖVP, then the SPÖ (1970–83), managed to achieve majorities of their own and built five consecutive single-party governments. Until the early 1980s, voters were extremely loyal to the major parties not least because they were not affected by several social and economic problems experienced in other European countries, such as mass unemployment, strikes and riots, which famously inspired Pope Paul VI to call Austria an ‘Island of the Blessed’.

Since the 1980s, Austria has experienced far-reaching developments: the breakdown of Austro-Keynesianism and nationalized industries led to important changes in macro-economic policy, because market forces have become accepted as a legitimate instrument for achieving growth (Lauber 1992: 170; Winckler 1988). The end of the communist regimes in neighbouring countries redeemed Austria from its status as a Western border state, but civil wars in the Balkans gave rise to almost forgotten fears for security and led to waves of refugees. EU membership was finally achieved in 1995, but quarrels about neutrality, the ‘sanctions’ against the government in 2000, and the opening of borders to East European workers gave rise to Euroscepticism.

Introduction

The country chapters have shown how the structure of electoral competition has been affected by globalization in the recent period. In each of the six countries, we found strong evidence for a transformation of the main dimensions of the political space and for patterns of realignment. In the present chapter, we focus on the demand side of electoral competition, analyzing in more detail the formation of a potential for the new integration v. demarcation cleavage. We take here a comparative perspective and consider similarities and differences among countries in the nature of these developments. It must be emphasized that the nature of our data imposes some limitations on the extent to which voters' attitudes can be compared across elections. To be able to perform similar analyses and to rely on comparable categories of issues across space and time, it was necessary to standardize all scales measuring issue-orientations. This implies that differences among groups of voters are always expressed in a relative way. Absolute positions or absolute distances in the political space cannot be compared directly. This is certainly annoying, but it is unavoidable given the lack of survey questions and designs that are directly comparable across several countries and elections. While this problem limits the type of comparisons that can be performed, it leaves enough room to analyze several of the central implications of our theoretical argument.

Today, in 2008, the euro is the common currency of fifteen EU countries with around 320 million inhabitants, and most other member states are aiming to join the euro area in the near or not-so-distant future. With the issuance of euro-denominated banknotes and coins at the beginning of 2002, the former national currencies were taken out of circulation, their names henceforward consigned to the history books. The fact that isolated attacks by populist politicians fail to elicit much support for a return to the national currency only serves to confirm that the common currency has become an irreversible reality, and that going back is not really an option.

Globally, too, the euro has become firmly established as the second most important currency after the US dollar. By some measures, for example in terms of its share of global official reserves, the euro still lags a long way behind; but in other respects, notably in its role as currency of denomination for credit, the euro has more or less drawn level with the American currency. Investors all around the world put their faith in the euro and buy euro-denominated long-term paper. Confidence in the stability of the euro is reflected in inflation expectations that are firmly anchored at low levels, helping explain what are, historically, exceptionally low long-term nominal interest rates.

Orientations in the ECB Governing Council

When the Governing Council of the ECB convened for its first meeting in Frankfurt on 9 June 1998, the assumption of monetary policy responsibility for the euro still seemed such a distant prospect, and yet the calendar showed it to be so close at hand. As was to be expected, and out of sheer necessity, the first few meetings were dominated by organisational and technical matters such as procedural rules, budget issues or the conditions of employment for the ECB's staff.

In developing the policy instruments as part of the monetary policy preparations, consideration also had to be given to their organisational and legal framework. For the difficult task of producing macroeconomic projections for the future euro area, the groundwork had to be laid for efficient cooperation between the ECB and the national central banks.

Inevitably, little time remained to discuss the economic situation. Moreover, a lot of what the national central bank governors had to say was, understandably, still focused on the specific situation in the individual countries. The national institutions, after all, continued to bear responsibility for the national currencies. However, the Governing Council could not possibly wait for the start of monetary union to direct its attention towards the euro area as a whole.

Introduction

The UK constitutes the paradigmatic case of a majoritarian democracy. As we have argued in Chapter 2, such a system discourages the rise of new challengers in the party system. This implies a greater stability of partisan configurations, but it does not mean that party systems are not subject to change. Under conditions of majoritarian democracies, the transformation of the party system is, however, more likely to involve the transformation of mainstream parties. As we have argued in Chapter 2, in majoritarian systems, the number of mainstream parties is more limited and, as a consequence, their internal composition is likely to be more heterogeneous than in proportional systems. New structural cleavages are likely to cut across the mainstream parties and to put them under great tension. The strain is expected to be particularly strong in the mainstream party that finds itself in the opposition. Such a party is likely to expand the scope of conflict on issues linked to the new cleavage, i.e. to adopt a more radical stance with regard to such issues. Therefore, in a majoritarian system such as the UK, shifts of power within mainstream parties are not only more likely to occur than in PR systems, but they also take on a much greater significance.

In the period covered by our project, two decisive shifts have occurred in each one of the major parties – the Conservative Party and the Labour Party – with far-reaching implications for the restructuration of the party system as a whole.