The more it changes, the more it stays the same? Swiss liberalization and regulatory policies in comparative perspective

Abstract

The wave of liberalization that has swept over most industrialized nations in the course of the last 30 years has led to important changes in state intervention in the economy. It is believed to have provoked a shift from an interventionist state to a regulatory state that limits its activity to the supervision and regulation of markets rather than directly intervening within markets. While the state is still responsible for rule making through authoritative and binding decisions (steering), the functions of service provision and production (rowing) are increasingly assigned to private actors (Jordana and Levi-Faur 2004). Following an apparent paradox, reforms designed to promote market mechanisms over state intervention in areas such as telecommunications, energy and transport have not led to the disappearance of state activity, but have instead promoted a strengthening of public regulation through various instruments, notably independent regulatory agencies (IRAs). The expression ‘freer markets, more rules’ (Vogel 1996) incisively sums up this phenomenon. Over the last few decades, all industrialized countries seem to have converged towards this model. Switzerland is an interesting case for the study of institutional change and the rise of the so-called regulatory state as it displayed varying degrees of ‘fit’ with this model. On the one hand, public interventionism has been limited in comparison with most Western European countries, and private solutions have always been preferred over public intervention. This greater degree of correspondence with the new liberal order is expected to imply a high degree of continuity in regulatory arrangements. On the other hand, however, the state in Switzerland has also notoriously shown a low degree of autonomy vis-a-vis private interests. In view of the fact that regulatory functions require a great degree of independence between regulators and regulatees, this, conversely, is likely to imply great disruption in existing regulatory arrangements. Moreover, Switzerland is not a member of the EU, the main promoter of liberalization and the diffusion of regulatory instruments in Europe, which should imply less severe adaptation pressures. In this chapter, we provide an overview of liberalization and re-regulation reforms in Switzerland with particular attention to path-dependent dynamics in order to explore these ambiguous expectations. First, we will outline the traditional Swiss regulatory model of the post-war period, summarize changes overthe last 20 years from a comparative perspective and provide case studies of regulatory reforms across economic sectors (telecoms and electricity, banking and finance, construction). We conclude with an assessment of regulatory reforms in Switzerland.