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Switzerland's Rise to a Wealthy Nation: Competition and Contestability as Key Success Factors

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  • Beatrice Weder
  • Rolf Weder

Abstract

This paper argues that economic competition and political contestability are two key determinants of the successful development of the Swiss economy in the nineteenth and twentieth century. We describe how Switzerland evolved from a relatively poor country with no natural resources and net emigration in 1800 to one of the richest countries of the world two hundred years later. Based on quantitative and qualitative evidence, we argue that early internationalization, open and flexible markets as well as a high degree of competition were crucial for the development of the Swiss economy.

Suggested Citation

  • Beatrice Weder & Rolf Weder, 2009. "Switzerland's Rise to a Wealthy Nation: Competition and Contestability as Key Success Factors," WIDER Working Paper Series RP2009-25, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2009-25
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    File URL: https://www.wider.unu.edu/sites/default/files/RP2009-25.pdf
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    References listed on IDEAS

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    1. Petra Moser, 2005. "How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World's Fairs," American Economic Review, American Economic Association, vol. 95(4), pages 1214-1236, September.
    2. Peter Kugler & Beatrice Weder, 2004. "International Portfolio Holdings and Swiss Franc Asset Returns," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 140(III), pages 301-325, September.
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    6. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    7. Thomas David & André Mach, 2006. "Institutions and Economic Growth: The Successful Experience of Switzerland (1870-1950)," WIDER Working Paper Series RP2006-101, World Institute for Development Economic Research (UNU-WIDER).
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    10. Peter Kugler & Beatrice Weder, 2004. "International Portfolio Holdings and Swiss Franc Asset Returns," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 140(III), pages 301-325, September.
    11. World Bank, 2007. "World Development Indicators 2007," World Bank Publications - Books, The World Bank Group, number 8150.
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    Cited by:

    1. Singh, Nirvikar, 2008. "India’s Development Strategy: Accidents, Design and Replicability," MPRA Paper 12453, University Library of Munich, Germany.
    2. Nirvikar Singh, 2016. "Breaking the Mould: Thoughts on Punjab’s Future Economic Development," India Studies in Business and Economics, in: Lakhwinder Singh & Nirvikar Singh (ed.), Economic Transformation of a Developing Economy, edition 1, chapter 0, pages 451-466, Springer.

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    Keywords

    Competition; Democracy; Economic development; History of economics; Institutional economics; International trade;
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