Veto Power and Wealth: Analysis of the Development of the Swiss Old Age Security

Christina G. Zenker

MPRA Paper from University Library of Munich, Germany

Abstract: Switzerland was one of the last OECD-countries to introduce a program for old age security – the AHV. For many decades, expenditures both in absolute terms and as a portion of GDP remained low in OECD comparison. In the 1970ies however, expenditures exploded – within 10 years, the expenditures as a percentage of GDP doubled. This article explains this astonishing development by applying the veto player theory. Veto player theory is useful to determine changes in the policy stability. The higher the policy stability, the more difficult it is to move away from the political status quo. The lower the policy stability, the more probable it is that reforms and changes in government programs can be achieved. This article shows that the policy stability was particularly high in the constitution phase (from 1890 to 1947) and the consolidation phase (from 1974 to the present) and low in the phase in between (from 1948 to 1973), when the foundation for the expansion was set.

Keywords: Veto player theory; Political Institutions; Direct Democracy; Social Spending (search for similar items in EconPapers)
JEL-codes: H55 D02 D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-cdm and nep-pol
Date: 2009-08
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