Why Is Switzerland So Rich?

In a standard country, you have only one chance in 4 or 5 years to change your politicians and then basically have to put up with everything the winners come up with, checks and balances notwithstanding. And the candidates are chasing enormous power.

In CH, the threat of a hostile referendum is always hanging over the heads of your politicians. Their position of power over their voters is much weaker than elsewhere.

I envy you your system. I wish we adopted it in 1990 after the Velvet Revolution. By now, our people would have learnt how to use it and would tame the excesses of the first years.

"We are simply in a geographic region that has always been economically active."

So is Iraq (since Antiquity) or South Africa (since the Age of Sail).

For Americans, Imagine if the majority of your tax money was directed and spent at your county, not state level. What might your schools and infrastructure look like?

For context, California has 8 counties more populous than the largest Swiss canton.

Another factor outside of consensus government is the federalism of government. From outside people would not believe how federal Switzerland is. In terms of school system, you can take the train, go 5 villages over and the school system might be very different. Along with many other things that would be different.

The amount of federalism Switzerland is comparable to what the US has, except Switzerland has it for areas that would be counties in the US.

What this prevents is the ultra dominance of capital city regions like England or France has. Infrastructure is developed for the whole country (even if the French speaking parts endlessly complain about not getting enough, arguably for good reason).

I would say, one of secret of Swiss success is simply, don't do anything really badly. Everything is somewhere between good and great.

One of the things I think we are not very good at is digital government, but because the old school government works pretty good and government is pretty responsive its not as big a deal. But I would love to be Estonia level with that. This is one case were federalism makes things harder.

In Switzerland government directly spends about 32.0% of GDP. That is well below OECD avg.

In how we got there. Basically the government was naturally pretty conservative in spending terms for a long term. In the 90s all of a sudden debt shot up, going from 10% of GDP to 30% of GDP in 10 years (that federal only, its more if you take all the rest). This was something that wasn't popular, and we voted on it.

https://www.bk.admin.ch/ch/d/pore/va/20011202/index.html

84.7% of people voted to adopt the "debt break". Since then debt as % of GDP has been going down or remained flat.

We did take on extra debt for Covid, but this by law has to be paid back by 2035.

It certainly does not. It's among the lowest in Europe. Significantly lower than surrounding countries.

The only explanation I have for this phenomenon is that this was in the news media a lot in the 90s, but so many other things were in the news more, but this thing seems to have entrained itself as the first thing that comes to mind when mentioning Switzerland.

Over 25% of the population are foreigners and over 40% of citizens have a immigration background.

Immigrants often become more Swiss than traditional residents, whether they are from Albania, Italy, Turkey or Germany (these some of the largest groups).

In fact we have a more heterogenous, multicultural and multilingual country than most other western nations.

And it was like that since basically forever. That’s why decentralization, federalism, neutrality are deemed so important I think.

Around 25% of residents were born outside Sweden and about a third have foreign born parents. Really not so different than some of the most successful U.S. states.