Financial referendum

Last updated

The financial referendum (also known as a budget referendum) is a form of the referendum and an instrument of direct democracy. It always relates to parts of the public budget of a government and allows citizens to vote directly on individual budget items.

Contents

Certain initial conditions are usually defined as a prerequisite for holding a financial referendum. In most cases, only budget items that exceed a certain absolute amount or a certain proportion of the total budget or investments that will burden the budget for a number of years can be subjected to a financial referendum.

The financial referendum may be either optional or mandatory. In its optional form a specified number of signatures from voters must be collected within a certain time period to trigger a vote on a budget item. A mandatory financial referendum automatically leads to a vote as soon as the conditions regarding the amount and duration of a budget item are met. [1] Budget items that do not meet the specified conditions or that the local authority is legally obliged to do cannot be subject to a financial referendum.

Switzerland

The financial referendum in Switzerland exists in all cantons and many municipalities. It does not exist however at the federal level. While a few cantons have used the instrument since the 19th century, it has only spread throughout Switzerland since the 1970s. [1] Most cantons and municipalities do not allow both the optional or the mandatory financial referendum. In a few cantons both types exist, whereby higher requirements apply to the obligatory type.

An example from the Canton of Zurich, which included the financial referendum in the complete revision of its constitution in 2005: [1]

Art. 39, point d):

Upon request, the following will be submitted to the people for a vote:

1. New one-off expenses of more than 6 million francs

2. new recurring expenses of more than 600,000 francs

The introduction of the financial referendum at federal level has been discussed in Switzerland for several decades, but has so far been rejected by a majority of Swiss political parties. [2]  Critics argue that a federal financial referendum could hinder the Federal Council in its freedom of action, and delay or even block important investments.

Effects and reception

Financial referendums have a moderating and disciplining effect on public funds and reduce centralization of government spending. [3] Disproportionately high or unpopular expenditure will most likely not be approved by the citizens in referendums, and referendums are associated with significantly lower public expenditure and taxes. [4] [5] Controlling for other factors of spending and demographics, data from Swiss cantons shows having mandatory financial referendums cause an average reduction of government spending by 19%. [6]

Proponents of the financial referendum argue it has features of citizen participation. Comparable to other procedures of citizen participation, it expands the democratic influence and citizens beyond the framework of the legislation to other socio-political issues. Its proponents therefore see the financial referendum as an important step towards further deepening democracy. It strengthens citizens' preoccupation with community finances and promotes awareness of public investment. Due to the largely positive experience with the financial referendum in Switzerland, some civil society organizations in Germany [7] and Austria are calling for it to be introduced there as well.  In many cases this would require a change in their respective constitutions because these often explicitly prohibit votes on parts of the budget, or simply no regulations exist for holding a financial referendum.

Critics of the financial referendum mostly argue that it could block important investments and limit the administration's ability to act. In addition, in contrast to the administration and parliament, citizens are often not in a position to objectively assess the appropriateness of larger budget expenditures.

See also

Related Research Articles

<span class="mw-page-title-main">Politics of Switzerland</span>

The government of Switzerland is a federal state with direct democracy.

<span class="mw-page-title-main">Referendum</span> Direct vote on a specific proposal

A referendum is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption of a new policy or specific law, or the referendum may be only advisory. In some countries, it is synonymous with and also known as plebiscite, votation,popular consultation, ballot question, ballot measure, or proposition.

<span class="mw-page-title-main">Direct democracy</span> Form of democracy

Direct democracy or pure democracy is a form of democracy in which the electorate decides on policy initiatives without elected representatives as proxies. This differs from the majority of currently established democracies, which are representative democracies. The theory and practice of direct democracy and participation as its common characteristic was the core of work of many theorists, philosophers, politicians, and social critics, among whom the most important are Jean Jacques Rousseau, John Stuart Mill, and G.D.H. Cole.

<span class="mw-page-title-main">Town meeting</span> Form of direct democracy for cities or towns

Town meeting, also known as an "open town meeting," is a form of local government in which eligible town residents can directly participate in an assembly which determines the governance of their town. Unlike representative town meeting where only elected representatives can participate in the governing assembly, any town voter may participate in an open town meeting. This form is distinct from town hall meetings held by elected officials to communicate with their constituents, which have no decision-making power.

<span class="mw-page-title-main">Landsgemeinde</span> Form of direct democracy in Switzerland

The Landsgemeinde is a public, non-secret ballot voting system operating by majority rule, which constitutes one of the oldest forms of direct democracy. Still at use – in a few places – at the subnational political level in Switzerland, it was formerly practiced in eight cantons. For practical reasons, the Landsgemeinde has been abolished at the cantonal level in all but two cantons where it still holds the highest political authority: Appenzell Innerrhoden and Glarus. The Landsgemeinde is also convened in some districts of Appenzell Innerrhoden, Grisons and Schwyz to vote on local questions.

<span class="mw-page-title-main">Swiss Federal Constitution</span> Constitution of the Swiss Confederation

The Federal Constitution of the Swiss Confederation of 18 April 1999 is the third and current federal constitution of Switzerland.

Voting in Switzerland is the process by which Swiss citizens make decisions about governance and elect officials. The history of voting rights in Switzerland mirrors the complexity of the nation itself. The polling stations are opened on Saturdays and Sunday mornings but most people vote by post in advance. At noon on Sunday, voting ends and the results are usually known during the afternoon.

<span class="mw-page-title-main">European Referendum Campaign</span>

The European Referendum Campaign (ERC) was an independent, Europe-wide, cross party network of NGOs and individuals which intended to bring together campaigners to fight for democratic development within the European Union. Its sole objective was to gain as many referendums on the 2007 EU Lisbon Treaty in as many EU member states as possible. The ERC was supported by the NGO Mehr Demokratie, and by Democracy International, a split-off of Mehr Demokratie, whose people also created the European Citizens' Initiative. The ERC cooperated with the European political party EUDemocrats – Alliance for a Europe of Democracies, as inspired and presided by Jens-Peter Bonde.

<span class="mw-page-title-main">Federal budget of Switzerland</span> Budget of the Swiss federal government

The Swiss federal budget refers to the annual revenue and expenditures of the Swiss Confederation. As budget expenditures are issued on a yearly basis by the government, the federal council, and have to be approved by the parliament, they reflect the country's Fiscal policy.

A three-part referendum was held in Switzerland on 21 October 1877. A federal law on working in factories was approved by voters, whilst a federal law on compensation for not serving in the military and a federal law on the political rights of settled and travelling people and the loss of rights for Swiss citizens were both rejected.

Three referendums were held in Switzerland during 1895. The first was held on 3 February on a popular initiative on a federal law on Swiss embassies abroad, and was rejected by a majority of voters. The second was held on 29 September on a federal resolution on amending the constitution regarding the institution of a match monopoly, and was rejected by a majority of voters and cantons. The third was held on 3 November on a constitutional amendment regarding the military, and was also rejected by a majority of voters and cantons.

Four referendums were held in Switzerland during 1949. The first two were held on 22 May on revising article 39 of the federal constitution concerning the Swiss National Bank and a federal law amending a 1928 law on measures against tuberculosis, with both rejected by voters. The third was held on 11 September on a popular initiative "for the recurrence to direct democracy" and was narrowly approved. The final one was held on 11 December on a federal law to amend the employment status of federal civil servants, and was also approved.

Referendums in Germany are an element of direct democracy. On the federal level only two types of a mandatory binding referendum exist – adopting a new constitution and regional referendums in case of restructuring the states. On the state level, all states have various types of statewide and municipal referendums.

<span class="mw-page-title-main">Popular initiative in Switzerland</span> Law suggested by the people of Switzerland

A popular initiative allows people to suggest laws on a national, cantonal, and municipal level.

A mandatory referendum, also known as an obligatory referendum, is a referendum that is legally required to be held under specific circumstances. This is in contrast to an optional referendum, which comes from either by public or legislative request. The actions that require mandatory referendums are set by law and normally concern major governmental actions or matters of large public significance. The most commonly found example worldwide of a mandatory referendum is a required referendum to adopt or amend a national constitution, which exists in many countries.

The optional referendum is a referendum which comes from a request by governmental authorities or the public. The best known types of optional referendums is the popular initiative to request a law, and the popular referendum to repeal a law. The collection of signatures from the public is normally necessary to organize an optional referendum, but some jurisdictions allow government agencies to request for a referendum also. It is a form of direct democracy.

<span class="mw-page-title-main">Government spending in the United States</span>

Government spending in the United States is the spending of the federal government of the United States and the spending of its state and local governments.

Federal referendums were held in Switzerland on 7 March, 13 June, 26 September, and 28 November 2021. Swiss referendums take three forms: popular initiatives, which are citizen proposals to create a new law and require 100,000 valid signatures on a petition to get on the ballot; facultative or optional referendums, which are citizen proposals to approve or reject a piece of existing law and require 50,000 valid signatures on a petition to get on the ballot; and mandatory referendums, which are required to revise the constitution, join an international organisation or introduce emergency federal legislation for over a year.

<span class="mw-page-title-main">2022 Swiss referendums</span>

Federal referendums were held in Switzerland on 13 February, 15 May and 25 September 2022. Swiss referendums take three forms: popular initiatives, which are citizen proposals to create a new law and require 100,000 valid signatures on a petition to get on the ballot; facultative or optional referendums, which are citizen proposals to approve or reject a piece of existing law and require 50,000 valid signatures on a petition to get on the ballot; and mandatory referendums, which are required to revise the constitution, join an international organization or introduce emergency federal legislation for over a year.

<span class="mw-page-title-main">Mandatory referendums in Switzerland</span> Direct democracy instrument in Switzerland

Switzerland employs mandatory referendums as a tool of direct democracy.

References

  1. 1 2 3 "Supplemental Information 3: An excerpt from Data Downloads page, where users can download original datasets". doi: 10.7717/peerj.9467/supp-3 .{{cite journal}}: Cite journal requires |journal= (help)
  2. "Am Finanzreferendum scheiden sich die Geister | NZZ". Neue Zürcher Zeitung (in German). Retrieved 2021-08-29.
  3. Schaltegger, Christoph A.; Feld, Lars P. (2001) : On Government Centralization and Budget Referendums: Evidence from Switzerland, CESifo Working Paper, No. 615, Center for Economic Studies and ifo Institute (CESifo), Munich. https://www.econstor.eu/bitstream/10419/75978/1/cesifo_wp615.pdf
  4. Wagschal, Uwe (May 1997). "Direct Democracy and Public Policymaking". Journal of Public Policy. 17 (2): 223–245. doi:10.1017/S0143814X0000355X. ISSN   1469-7815. S2CID   154835432.
  5. Nguyen-Hoang, Phuong (2012). "Fiscal effects of budget referendums: evidence from New York school districts". Public Choice. 150 (1/2): 77–95. doi:10.1007/s11127-010-9690-x. ISSN   0048-5829. JSTOR   41406869. S2CID   254938258.
  6. Feld, Lars P.; Matsusaka, John G. (May 2002). "Budget Referendums and Government Spending: Evidence from Swiss Cantons" (PDF). Initiative and Referendum Institute. Retrieved 2021-08-28.
  7. Demokratie, Mehr. "Mehr Demokratie e.V. Landesverband Berlin/Brandenburg: Finanzreferendum". Mehr Demokratie e.V. (in German). Retrieved 2021-08-29.