1. A Small State between a Liberal and a Coordinated Market System
Switzerland
A Small State between a Liberal and a Coordinated Market System

2. Thesis:
Switzerland has an Economic System which tends more toward the Liberal Market Anglo-Saxon Model than towards the Coordinated Market Continental European Model

3. Content: Liberal and Coordinated economies
Labor Market, Welfare State, Performances
Recent Trends and Conclusion

4. Liberal and Coordinated Economies:
Liberal market Economy (LME):
Coordination through market
Coordinated market Economy (CME):
Coordination through formal or informal networks

5. Liberal market Economy (LME): Coordinated market economy (CME):
Labor Market:
Liberal market Economy (LME):
Labor Force unionized to a minor degree
Weak peak labor and business organizations
No strong involvement of the state in the bargaining process
Coordinated market economy (CME):
Labor Force unionized to a high degree
Strong peak labor and business organizations
Involvement of the state in the bargaining process

6. Labor Market: Labor Union Density (1985 - 1992) - Source: Hall/Soskice
95%
100%
57%
50%
37%
34%
32%
29%
15%
10% Ø Ø
► Tendency towards Liberal Market Economy

7. Liberal market Economy (LME): Coordinated market economy (CME):
Welfare State:
Liberal market Economy (LME):
Only partial developed Welfare state
Social benefits mainly contributed by private investment
Decommodification low
Taxes Low
Coordinated market economy (CME):
Fully developed Welfare state
Social benefits mainly contributed by employer or state
Decommodification medium – high
Taxes High

8. Welfare State: Decommodification Index (2000) – Source: Scruggs/Allan40 40 37 27 30 25 22 20 20 16 10
► Tendency towards Liberal Market Economy

9. Welfare State: Tax Burden (2000) - Source: OECD54
50,1
50%
38,6
40%
32,2
32,1
30,6 30
30%
20%
10%
► Tendency towards Liberal Market Economy

10. Liberal market Economy (LME): Coordinated market economy (CME):
Performance:
Liberal market Economy (LME):
More Globalized economies
Recent lower unemployment rates
Coordinated market economy (CME):
Less globalized economies
Recent higher unemployment rates

11. Performance: Unemployment rate (2004 – March 2007) - Source: OECD
10% 8% 6%
5.4 – 4.8
5.5 – 4.4
4.8 – 5.4
4.5 – 3.7
4.6 – 2.7 4% 2%
► Tendency towards Liberal Market Economy

12. Recent Trends in Switzerland:
1990 – 2004
Total Government Expenditure / per year : ,5%
Expenditure Social Welfare / per year: ,1%
→ 2004, 52% of government expenditure in favor of social welfare
► Tendency towards Coordinated Market Economy

13. Recent Trends in Switzerland:
1990 – 2005
Development Tax Burden: %
(EU 1,2%, US – 0,5%)
► Tendency towards Coordinated Market Economy

14. Recent Trends in Switzerland:
2000 – 2004
Growth rates: : 3,6%
2001: 1%
2002: 0,3%
2003: - 0,2%
2004: 2%
► Tendency towards Coordinated Market Economy

15. Thesis:
Switzerland has an Economic System which tends more toward the Liberal Market Anglo-Saxon Model than towards the Coordinated Market Continental European Model however, recent developments indicate a slight turnaround

16. Growth Measures Swiss Federal Council (2005):
1. More competition in the domestic market
2. More integration in the world market
3. Limitation of government expenditures
4. Maintain a high labor force participation rate
5. Maintain a competitive education system
6. Economic law should facilitate economic growth

17. Literature
Economie Suisse, Media Conference 2007, (accessed August )
Esping-Andersen Gosta, The Three Worlds of Welfare Capitalism, Cambridge: Polity Press, 1990
Hall, Peter A, David Soskice, Varieties of Capitalism, New York: Oxford University Press, 2001
Katzenstein, Peter J, Small States in World Market, London: Ithaca, 1985.
OECD, Growth figueres, (accessed August )
OECD, Tax Burden 2000, (accessed August )
OECD, Unemployment Rate 2003 – 2007, (accessed August )
Phelps Edmund S, Dynamic Capitalism, New York: Wall Street Journal, Oct
Rosser, J. Barkley, Marina V. Rosser, Comparative Economics in a Transforming World Economy, Cambridge: MIT Press, 2004
Scharpf, Fritz W, Vivien A. Schmidt, Welfare and Work in the Open Economy. From Vulnerability to Competitiveness. Volume 1 Oxford: Oxford University Press, 2000.
Scruggs Lyle A, James P. Allan, Trends in Welfare State Decommodification in Eighteen Advanced Industrial Democracies , Paper for annual meeting of the American Political Schience Association, Philadelphia, PA, August 27/31, 2003, (accessed August )
Switzerland, Federal Council, Das Wachstumspaket des Bundesrates: Stand der Umsetzungen Ende 2005, (accessed August )
Wolf Martin, European corporatism needs to embrace market-led change, London: Financial Times, Jan