ABSTRACT
The Swiss federation has no sovereignty. Federal institutions can only assume tasks which are explicitly enumerated in the constitution. Constitutional change must be approved by popular vote. A majority of the population and a majority of cantons have to approve the change. Sovereignty resides with the 26 states (Kantone) (Article 3 Constitution), to the extent that it is not restricted by the constitution.1 The cantons have major competencies in various policy fields, including tax policy.2 With regard to their discretionary powers, Swiss cantons are comparable to the states of the USA. However, Swiss cantons are strongly interlocked with federal agencies. Federal agencies depend on cantonal administrations for policy implementation and the cantons are dependent upon transfers from the federal state. In this regard, Swiss federalism shares important traits with the German model of federalism. Judged by the major findings of research on federalism, Switzerland is in the worst of all possible worlds:
1 The large discretionary power of the American states implies complexity, duplication, confusion and inefficiency. This is a prominent critique easily found in textbooks on American federalism (Ripley and Slotnick 1993:728).
