The aim of the paper is to show that the Swiss cantons do not care –or do not care that much– of the obligation of the article 100 of the federal Constitution, namely to adapt their fiscal policy according to the business cycle. More secifically, the paper aims at confirming on a factual basis that the cantonal fiscal policies are pro-cyclical. Indeed 2003 caracterised by an economic slowdown that could have been already anticipated while preparing the cantonal budgets for that very year. Whereas in most cantons it can be seen that the budgetary proposals for 2003 are either neutral toward the business cycle or more often procyclical. This statement is reinforced by statistical studies carried out by various researchers both at the cantonal individual level and allover the cantons using data for the long run. The meta-analysis of these studies shows that the Swiss cantons usually had behaved procyclically since there had been systematically and clearly more pro- cyclical impulses than contra-cyclical impluses.
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Paper provided by EconWPA in its series Public Economics with number
0507016.