Affiliation:
1. Institute for Swiss Economic Policy, University of Lucerne , Lucerne , Switzerland
Abstract
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.
Reference5 articles.
1. Heinemann, F., and J. Nover. 2023. “State-Owned Enterprises, Fiscal Transparency, and the Circumvention of Fiscal Rules: The Case of Germany.” ZEW Discussion Paper, 23-058.
2. Jarck, J., M. Salvi, and C. A. Schaltegger. 2022. “Die Schuldenbremse: Erfahrungen und Heraus-forderungen aus einer Schweizer Perspektive.” Perspektiven der Wirtschaftspolitik 23 (4): 252–70. https://doi.org/10.1515/pwp-2022-0032.
3. OECD. 2023. “Government Finances and Public Sector Debt.” https://www.oecd.org/sdd/na/government-finances-and-public-sector-debt.htm.
4. Salvi, M., C. A. Schaltegger, and L. Schmid. 2020. “Fiscal Rules Cause Lower Debt: Evidence from Switzerland’s Federal Debt Containment Rule.” Kyklos 73 (4): 605–42. https://doi.org/10.1111/kykl.12251.
5. Villinger, K. 2023. “Schuldenbremse: Ein Blick zurück in die Entstehungsgeschichte.” Speech for the anniversary event «Schuldenbremse: Eines der wichtigsten Instrumente der Schweizer Finanzpolitik wird 20 Jahre alt», September 23, Bern.