In Switzerland, citizens have the last word on money matters

In the northwestern Swiss city of Aarau, citizens can use referendums to weigh in on government spending Keystone

If citizens in the Swiss town of Aarau think that their politicians plan to waste too much money, they can interfere using a special veto power. Although it is rarely used, the measure’s effects manifest themselves in other ways.

This article is part of #DearDemocracy, a platform on direct democracy issues from swissinfo.ch.

 “Participatory budgeting” – where everyone can have a say on how public money is used – has become all the rage recently. Citizens of cities like Madrid and Paris have already had several chances to decide how multimillion-Euro budgets are spent. But Switzerland is the only country where the method is regularly used, according to the Italian research group Politis.

PLACEHOLDER

For the Swiss, participatory budgeting has deep roots in the political landscape. Most cantons and communes hold optional or even required referendums on financial matters.

 Control over the town’s finances

In Aarau, a town between Bern and Zurich prized for its picturesque historic centre, it is mandatory for the town’s electorate to have their say on budget items with significant financial implications. Aarau holds obligatory referendums on financial matters if the expenditure amounts to CHF6 million ($6.1 million) or more. 

The people can also have their say on any other budget item through an optional referendum, as long as 10% of all residents sign up to hold a vote in the specified amount of time. 

In recent decades, the power to veto decisions using this two-pronged approach has created a lively culture of debate in Aarau regarding public funds. The town’s appearance even reflects it. The flourish of greenery that is the Schlossplatz square looks beautiful on a peaceful, sunny spring day. But it might look very different if town citizens had not used a referendum on financial matters to stop a car park being built on the site. 

A few metres away, the Aare river flows calmly along its canalised bed. The municipal government actually wanted to spend CHF3.6 million restoring it to a near-natural state by planting bushes and creating winding river banks, inlets and ponds. However, the conservative right Swiss People’s Party thought the proposal was too expensive and unnecessary, collected signatures against it, initiated a referendum on financial matters and successfully overturned the decision with the people’s support.

Corrective action by the people

People in Aarau are clearly proud of their ability to intervene in political decisions. A man enjoying an espresso in the park says that although he generally trusts members of parliament, he feels it’s good to be able to intervene if they start “doing anything absurd”. And an elderly woman waiting for a bus says that “as taxpayers, we want the chance to have our voices heard”. 

The town’s residents gather signatures for optional referendums against planned budget items around once a year, but they don’t always get enough people to sign and the prospects of successfully vetoing a budget are not particularly high. In fact, the people of Aarau have only managed to veto two financial decisions in the last 15 years – the car park construction and the river re-naturalisation measures.

Invisible ways of cutting costs 

Even though the referendum on financial matters rarely succeeds at the municipal level, its mere existence has an influence behind the scenes. 

“Overall, it creates a tendency for decision-makers to act more sensibly and with a greater level of awareness when it comes to public expenditure,” says Andreas Glaser, Professor of Law at the University of Zurich and Director of the Centre for Democracy in Aarau. That leads to more careful spending of the town’s public budget, he adds. 

PLACEHOLDER

Research bears that out; a recent study showed that per capita public expenditure is considerably lower in communes that hold referendums on financial matters than in those that don’t. 

But like most instruments of direct democracy, such referendums significantly delay projects, in some cases for years. And Glaser says the ballot measures can have unequal effects, tending to question funding for minority groups more than for well-organised campaigns. 

This inequality can especially affect teenagers or foreigners who are not eligible to vote, but the evidence is hard to find since Glaser points out that these groups are not usually the recipients of large sums of money in Aarau. 

Why not nationwide? 

Despite contributing to well-balanced budgets in Switzerland, the referendum on government spending only exists on the cantonal and communal levels. Financial decisions made for the country as a whole are not subject to referendums. 

Both chambers of Swiss parliament debated whether to introduce such an instrument about a decade ago, but ultimately rejected it out of fears that it would block the government’s freedom to act and would block key investments.

Financial referendums – a history

A few Swiss cantons have been holding referendums on financial matters since the 19th century, but they only became more common in the 1970s.

Obligatory referendums on financial matters can be used to contest one-off large sums or high recurring expenses and come in a variety of forms.

The criteria required to hold an obligatory referendum vary in from canton to canton and are established in each canton’s constitution. 

The very first referendum on financial matters held in Aarau involved moving a monument that had stood in the centre of a square near the train station for years. When the square was redesigned in 1971, plans were made to “banish” the monument to the grounds of a school. However, the teaching staff collected signatures against the budget item related to the move and the people supported their opposition to the plan at the ballot box. The monument was returned to the square and can now be found at the nearby military barracks.

Translated from German