IDEAS home Printed from https://ideas.repec.org/a/bpj/evoice/v21y2024i1p213-218n1010.html
   My bibliography  Save this article

The Swiss Debt Brake Is Democratic, Strict, Transparent, and Binding. A Model to Follow?

Author

Listed:
  • Mosler Martin

    (Institute for Swiss Economic Policy, University of Lucerne, Lucerne, Switzerland)

  • Schaltegger Christoph

    (Institute for Swiss Economic Policy, University of Lucerne, Lucerne, Switzerland)

Abstract

The Swiss debt brake at the federal level was accepted in 2001 by a direct democratic referendum, where it received an overwhelming approval rate of almost 85 percent “yes” votes. The fiscal rule mandates that budgeted expenditures cannot exceed cyclically adjusted expected revenues, targeting gross debt while prohibiting new structural debt. Violations due to ordinary or extraordinary expenditures are transparently recorded in separate accounts, which must be balanced within three and six years, respectively. The federal rule is complemented by decentralized debt brakes at the cantonal level. Compared to a synthetic Switzerland without the federal debt brake, the fiscal rule did not decrease public investments, with the notable exception of military expenditure. Additionally, the accuracy of budget forecasts has improved, evidenced by reduced discrepancies between projected and actual revenues and expenditures.

Suggested Citation

  • Mosler Martin & Schaltegger Christoph, 2024. "The Swiss Debt Brake Is Democratic, Strict, Transparent, and Binding. A Model to Follow?," The Economists' Voice, De Gruyter, vol. 21(1), pages 213-218.
    • Handle: RePEc:bpj:evoice:v:21:y:2024:i:1:p:213-218:n:1010
    DOI: 10.1515/ev-2024-0021
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ev-2024-0021
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ev-2024-0021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    fiscal rule; debt brake; Switzerland; federal level;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:evoice:v:21:y:2024:i:1:p:213-218:n:1010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.