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Switzerland Report : Sustainable Governance in the Context of the COVID-19 Crisis


Armingeon, Klaus; Sager, Fritz; Zohlnhöfer, Reimut (2021). Switzerland Report : Sustainable Governance in the Context of the COVID-19 Crisis. Gütersloh: Bertelsmann Stiftung.

Abstract

Switzerland was one of the first European countries to be affected by the coronavirus pandemic. As with other countries that were affected early, Switzerland took longer to respond than countries that were affected later (Kohler et al. 2020; Wenger et al. 2020), because there were no best practice examples to copy (Plümper and Neumayer 2020). Measured in terms of controlling the coronavirus incidence rate (average number of new infections per 100,000 inhabitants), the country’s response to the first wave of the coronavirus pandemic and its aftermath (March – April 2020) was extraordinarily successful. However, its response to the second wave, which began in late August and reached its preliminary peak in November 2020, was significantly poorer. During the first wave, Switzerland pursued a strict, time-consistent lockdown policy. However, the country’s approach to the second wave was hesitant, less strict and less time-consistent, with various temporary, light lockdowns pursued. In particular, during the first wave, efficient and pragmatic economic policies were implemented, including a light-handed lending program managed by private banks and fully guaranteed for loan defaults by the federal government, while a generous short-time work compensation program and several à fonds perdu payments (hardship cases) were introduced by cantonal and federal governments.
At the end of the period under review, Switzerland’s economic growth, government deficit and unemployment rates appeared to have been relatively unaffected. This was due to very favorable conditions at the start of the coronavirus pandemic, namely Switzerland’s highly competitive economy, booming and flexible labor market, efficient infrastructure, reliable public administration, and sound public finances. In addition, the government recently enacted an ordinance regulating lockdown measures within the framework of the Swiss Epidemics Act (EpA 2012). By international standards, democracy in Switzerland has functioned well, and few restrictions have been placed on civil liberties and rights. As a federal state with a weak federal government due to sovereignty residing mainly in the cantons, policy responses to the coronavirus crisis involved complex coordination between cantons, and between cantons and the federal level. Consequently, policymaking was prone to conflict, slow and idiosyncratic, while policy actors were incentivized to avoid blame for policy failures. Policymaking has been strongly path dependent. With the exception of the emergency law period (“exceptional situation”), which increased federal government powers over the cantons, federal economic policy has been coordinated with cantonal policies and worked to a large extent by matching funds. The need for negotiations and compromise in policy formulation resulted in a sluggish process that ultimately delivered relatively inconsistent policies. Corporatist coordination between the state and economic actors continued to be highly effectively. The major achievement was the introduction of a program that entitled struggling firms to request credit from private banks, which would be guaranteed in case of default by the federal government. This program was designed and implemented within a few days by representatives of five major banks together with the Federal Ministry of Finance, and demonstrates the extent of mutual trust and familiarity between the banks and the ministry as well as the country’s pragmatic heterodox economic ideology. Beyond corporatist cooperation, economic interest groups (in particular small- and medium-sized enterprises) were highly successful in achieving their goals, provided there was no opposition from other economic elites or liberal counterparts of industry in the political systems. For example, representatives of the hospitality industry successfully lobbied to remove lockdown restrictions on hotels and restaurants earlier than planned during the first wave (Sager and Mavrot, 2020). However, their demands for a rent reduction program to support hotels and restaurants during the lockdown failed, as the proposal provoked opposition from economic-liberal politicians and other interest groups (e.g., landlords). Path dependence characterized the likelihood of interest groups’ success. While well-organized producer interests (particularly associations of employers and firm owners) could carry the day, weakly organized groups and employees were much less successful. It was only in December 2020 that short-time work compensation for low-wage employees was increased, as requested by trade unions. Meanwhile, the demands of nursing personnel for better working conditions were rejected by parliament in the fall of 2020. Finally, during the coronavirus pandemic, tensions between expert scientific advice and political decision-making became pronounced. It took several weeks following the start of the coronavirus pandemic for the Federal Council to institutionalize a scientific task force, and when it was formed it was composed mainly of life scientists and economists (with sociologists, psychologists and political scientists poorly represented). Scientific advice has been treated as one among many inputs and some politicians – in particular from the right-populist Swiss People’s Party – have made it clear that they do not appreciate scientific input into political decision-making.

Abstract

Switzerland was one of the first European countries to be affected by the coronavirus pandemic. As with other countries that were affected early, Switzerland took longer to respond than countries that were affected later (Kohler et al. 2020; Wenger et al. 2020), because there were no best practice examples to copy (Plümper and Neumayer 2020). Measured in terms of controlling the coronavirus incidence rate (average number of new infections per 100,000 inhabitants), the country’s response to the first wave of the coronavirus pandemic and its aftermath (March – April 2020) was extraordinarily successful. However, its response to the second wave, which began in late August and reached its preliminary peak in November 2020, was significantly poorer. During the first wave, Switzerland pursued a strict, time-consistent lockdown policy. However, the country’s approach to the second wave was hesitant, less strict and less time-consistent, with various temporary, light lockdowns pursued. In particular, during the first wave, efficient and pragmatic economic policies were implemented, including a light-handed lending program managed by private banks and fully guaranteed for loan defaults by the federal government, while a generous short-time work compensation program and several à fonds perdu payments (hardship cases) were introduced by cantonal and federal governments.
At the end of the period under review, Switzerland’s economic growth, government deficit and unemployment rates appeared to have been relatively unaffected. This was due to very favorable conditions at the start of the coronavirus pandemic, namely Switzerland’s highly competitive economy, booming and flexible labor market, efficient infrastructure, reliable public administration, and sound public finances. In addition, the government recently enacted an ordinance regulating lockdown measures within the framework of the Swiss Epidemics Act (EpA 2012). By international standards, democracy in Switzerland has functioned well, and few restrictions have been placed on civil liberties and rights. As a federal state with a weak federal government due to sovereignty residing mainly in the cantons, policy responses to the coronavirus crisis involved complex coordination between cantons, and between cantons and the federal level. Consequently, policymaking was prone to conflict, slow and idiosyncratic, while policy actors were incentivized to avoid blame for policy failures. Policymaking has been strongly path dependent. With the exception of the emergency law period (“exceptional situation”), which increased federal government powers over the cantons, federal economic policy has been coordinated with cantonal policies and worked to a large extent by matching funds. The need for negotiations and compromise in policy formulation resulted in a sluggish process that ultimately delivered relatively inconsistent policies. Corporatist coordination between the state and economic actors continued to be highly effectively. The major achievement was the introduction of a program that entitled struggling firms to request credit from private banks, which would be guaranteed in case of default by the federal government. This program was designed and implemented within a few days by representatives of five major banks together with the Federal Ministry of Finance, and demonstrates the extent of mutual trust and familiarity between the banks and the ministry as well as the country’s pragmatic heterodox economic ideology. Beyond corporatist cooperation, economic interest groups (in particular small- and medium-sized enterprises) were highly successful in achieving their goals, provided there was no opposition from other economic elites or liberal counterparts of industry in the political systems. For example, representatives of the hospitality industry successfully lobbied to remove lockdown restrictions on hotels and restaurants earlier than planned during the first wave (Sager and Mavrot, 2020). However, their demands for a rent reduction program to support hotels and restaurants during the lockdown failed, as the proposal provoked opposition from economic-liberal politicians and other interest groups (e.g., landlords). Path dependence characterized the likelihood of interest groups’ success. While well-organized producer interests (particularly associations of employers and firm owners) could carry the day, weakly organized groups and employees were much less successful. It was only in December 2020 that short-time work compensation for low-wage employees was increased, as requested by trade unions. Meanwhile, the demands of nursing personnel for better working conditions were rejected by parliament in the fall of 2020. Finally, during the coronavirus pandemic, tensions between expert scientific advice and political decision-making became pronounced. It took several weeks following the start of the coronavirus pandemic for the Federal Council to institutionalize a scientific task force, and when it was formed it was composed mainly of life scientists and economists (with sociologists, psychologists and political scientists poorly represented). Scientific advice has been treated as one among many inputs and some politicians – in particular from the right-populist Swiss People’s Party – have made it clear that they do not appreciate scientific input into political decision-making.

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Item Type:Published Research Report
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:150 Psychology
Language:English
Date:2021
Deposited On:02 Feb 2022 13:03
Last Modified:15 Mar 2022 03:50
Publisher:Bertelsmann Stiftung
Number of Pages:52
OA Status:Green
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.11586/2021107
Official URL:https://www.sgi-network.org/docs/2021/country/SGI2021_Switzerland.pdf
  • Content: Published Version
  • Language: English