Why Switzerland is so rich and tops the Human Development Index
Switzerland leads the Human Development Index. Armed neutrality, direct democracy and tax competition: the keys Spain still refuses to copy.
English · Original discussion in Spanish · Published
Switzerland, the country that won without firing a shot: neutrality and direct democracy
Switzerland once again tops the Human Development Index, and the mirror is once again held up to half a continent. The short answer to the Swiss success is that the country played its cards well, very well. The long answer is meatier and needs no Swiss Army knives.
Armed neutrality as a competitive advantage
The main reason: no war ever swept over Switzerland. While half of Europe burned, the country manufactured precision goods, sold defence equipment and looked after other people's money. That compounding effect, generation after generation, has built a capital cushion that far more populous rivals cannot match.
Added to this is an institutional engineering that is no miracle:
The awkward factor: culture and exclusivity
Calvinism, banking secrecy and an immigration policy that only admits talent and capital are also cited as drivers. Nothing to do with chocolate. The comparison with Spain is inevitable: while the Swiss referendum stops nonsense within fifteen days, here the productive model has specialised in the brown envelope, the property windfall and the kickback. The Alpine country is not copied because, ironies of analysis, our business lies elsewhere.
The analysis gets stuck at one point: the Swiss model requires centuries, institutions that are respected and a citizenry that does not swallow tall tales. It cannot be improvised. And that is where the economic discussion runs out of comfortable answers.
Switzerland once again tops the Human Development Index, and the mirror is once again held up to half a continent. The short answer to the Swiss success is that the country played its cards well, very well. The long answer is meatier and needs no Swiss Army knives.
Armed neutrality as a competitive advantage
The main reason: no war ever swept over Switzerland. While half of Europe burned, the country manufactured precision goods, sold defence equipment and looked after other people's money. That compounding effect, generation after generation, has built a capital cushion that far more populous rivals cannot match.
Added to this is an institutional engineering that is no miracle:
- Direct democracy: citizens strike down whatever they consider nonsense in a referendum within 15 days.
- Tax competition between cantons: it is not a tax haven, it is real competition: whoever raises taxes loses companies.
- Bilateral agreements with the EU without being a member: single market access without paying Brussels' political sponsorship.
The awkward factor: culture and exclusivity
Calvinism, banking secrecy and an immigration policy that only admits talent and capital are also cited as drivers. Nothing to do with chocolate. The comparison with Spain is inevitable: while the Swiss referendum stops nonsense within fifteen days, here the productive model has specialised in the brown envelope, the property windfall and the kickback. The Alpine country is not copied because, ironies of analysis, our business lies elsewhere.
The analysis gets stuck at one point: the Swiss model requires centuries, institutions that are respected and a citizenry that does not swallow tall tales. It cannot be improvised. And that is where the economic discussion runs out of comfortable answers.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (28 replies).
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