IDEAS home Printed from https://ideas.repec.org/a/bpj/jeehcn/v13y2003i4n5.html
   My bibliography  Save this article

Fiscal Decentralisation: The Swiss Case

Author

Listed:
  • Price Victoria Curzon

    (University of Geneva)

Abstract

Switzerland provides a potential laboratory for testing various hypotheses connected with tax competition because of its extremely decentralized fiscal system. Twenty-six cantons (some of them extremely small) have retained the ultimate power of deciding tax questions, and hence not only to limit the Federal level of the State to about 1/3 of total public expenditure, but also to retain absolute power to set their own levels of taxation. Furthermore, citizens can launch referenda on tax issues at any level of government.Fiscal competition between cantons should therefore be easy to spot, resulting in lower tax cantons enjoying higher economic growth (the classical hypothesis), or in a race to the bottom with lower tax cantons offering a lower level of public services (the harmful competition hypothesis). In fact, neither of these hypotheses is confirmed. This leads the author to suggest a third hypothesis based on public choice theory (politicians in high-income cantons are led to raise high taxes). The author suggests that the classical and the public choice hypotheses cancel each other out, leaving a mixed picture. The article ends with some reflexions on the implications of the Swiss experience for fiscal harmonization at a European level.La Suisse offre un véritable laboratoire pour tester plusieurs hypothèses de concurrence fiscale en raison de son système fiscal extrêmement décentralisé. Vingt six cantons (dont quelques uns très petits) ont conservé le pouvoir suprême de décider les questions fiscales et, donc, non seulement de limiter le niveau fédéral de lEtat à 1/3 des dépenses publiques totales, mais aussi de conserver le pouvoir absolu pour fixer leurs propres niveaux de taxation. De plus, les habitants peuvent lancer des référendums en matière fiscale à tout niveau du gouvernement.La concurrence fiscale entre les cantons devrait être par conséquent plus facile à repérer, les cantons les moins imposés ayant une croissance économique supérieure (hypothèse classique), ou en un « nivellement par le bas » face aux cantons les moins imposés offrant un niveau inférieur de services publics (hypothèse de concurrence néfaste). En fait, aucune de ces hypothèses nest confirmée. Cela conduit lauteur à suggérer une troisième hypothèse basée sur la théorie des décisions publiques (les politiciens des cantons à revenus élevés sont conduits à lever des impôts élevés). Lauteur suggère que les hypothèses classiques et celles des décisions publiques se neutralisent lune lautre, laissant place à un modèle mixte. Larticle se termine par quelques réflexions quant aux implications de lexpérience Suisse pour une harmonisation fiscale au niveau européen.

Suggested Citation

  • Price Victoria Curzon, 2003. "Fiscal Decentralisation: The Swiss Case," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 13(4), pages 1-20, December.
  • Handle: RePEc:bpj:jeehcn:v:13:y:2003:i:4:n:5
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/jeeh.2003.13.4/jeeh.2003.13.4.1108/jeeh.2003.13.4.1108.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

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

    References listed on IDEAS

    as
    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Feld, Lars P. & Kirchgassner, Gebhard, 2001. "Income tax competition at the State and Local Level in Switzerland," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 181-213, April.
    3. Kirchgassner, Gebhard & Pommerehne, Werner W., 1996. "Tax harmonization and tax competition in the European Union: Lessons from Switzerland," Journal of Public Economics, Elsevier, vol. 60(3), pages 351-371, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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:jeehcn:v:13:y:2003:i:4:n:5. See general information about how to correct material in RePEc.

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

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.