The federalistic structure of Switzerland’s political system requires that all examinations of the financial situation of the public sector at the national level must consider the canton and municipal levels as well. However, whereas federal financials are excellently documented as far back as the 1850s, comprehensive and unified statistics of canton financials were not developed until 1930, when the statistical processing of canton financials was entrusted to the Federal Taxation Administration (“Eidgenössische Steuerverwaltung” / “Administration fédérale des Contributions”). After that, it took another quarter of a century before government entities finally succeeded in also comprehensively covering municipalities. The fact that we are now capable of presenting homogenous series on canton and municipal finances – and thus for the public sector as a whole – for a period extending over several decades in the first place, is due to the Federal Taxation Administration, which in the years 1973 and 1974 published three volumes containing data extending back to the early 1930s. Additional retrospective overviews were found in the volumes 1977–1992 of the series “Public Finance in Switzerland” by the Federal Statistical Office (later the Federal Office of Statistics). Since the Federal Office of Statistics has been using a new method for the processing of its data since 1990, we did not extend the time series included in the table section of this chapter past the year 1989.

Federal, Canton, and Municipal Expenditures and Value Added during the Period 1850–1913

Applying modern financial-statistical categories, Patrick Halbeisen and Roman Lechner reconstructed the federal, canton, and municipal value added for the second half of the 19th century in their licentiate thesis (“Lizentiatsarbeit”), contribution to the National Fund project “Geldmenge und Wirtschaftswachstum in der Schweiz 1851–1913” (“Money supply and economic growth in Switzerland 1851–1913”). Their estimating concept is based on the assumption that expenditures by the public sector represent a measure of the value provided by them.
From an empirical point of view, the estimate is based on a full survey at the federal level and partial tallies for individual cantons and municipalities. The value added of cantons was determined through a projection which on the one hand drew from contemporary counts in all cantons from the years 1863, 1888, and 1913, and from the annual results of the official financials for the cantons of Zurich, Berne, Basle-City, St. Gall, Argovia, Vaud, and Geneva on the other. Since those cantons represented approximately 70% of the total value added generated by all cantons between 1850 and 1913, the estimate appears reliable. In contrast, the development of municipal finances could only be reconstructed in a rough fashion. While for this level of political government, we are in the possession of three contemporary surveys or estimates which report on total municipal expenses by canton in the years 1863, 1900, and 1910, continuous annual series could only be created for the cantons of Zurich, Basle- City, Vaud, and Neuchâtel. In addition, those series do not extend far back into the 19th century; the earliest records are from the year 1879. In order to determine the development of municipal expenditures, Halbeisen and Lechner only had at their disposal, apart from the abovementioned statistics, the data from periodical surveys by the cantons of Berne, Glarus, and Zoug.
The construction of a municipal value added series required two additional hypotheses: first, it was conjectured that trend deviations in the value added curves for cantons and municipalities were identical. This assumption offered itself after a comparison between municipal expenditures in the cantons of Zurich, Basle-City, Vaud, and Neuchâtel, and the canton value added indices revealed that the two series highly correlated for the period 1879–1913. Second, it was assumed that the arithmetic mean of the value added quotient determined for the municipalities of the cantons of Zurich and Basle-Country (26%) was transferable to the municipalities of the remaining cantons as well.
In addition to the value added estimates, Halbeisen and Lechner’s contribution to the statistics on the development of public finance in Switzerland between 1850 and 1913 also contains detailed overviews of the individual expenditure and revenue components for the cantons of Zurich and Berne. It seemed appropriate to include those tables in the “Historical Statistics of Switzerland”, though caution must be applied when comparing these statistics with those of the Swiss Taxation Administration, beginning in 1930.

Federal Finances since 1913

The two world wars, the major economic crash in the beginning of the 1920s, and the Great Depression during the years 1932–1936 severely stressed the federal budget and left deep marks on the expenditure as well as on the revenue side of Switzerland’s national finances. The fact that federal financial politics in the era of the world wars were forced time and again to adapt to changed political, social, and economic conditions, made the creation of homogeneously structured national finance statistics between 1914 and 1950 virtually impossible. A multitude of in part complementary and in part contradicting individual statistics has been passed on from that turbulent era, but a critical evaluation of those sources has not yet, by any means, been completed. At this point, only statistical raw data for the years 1938–1953 – subject of a wellfounded financial- sociological analysis by historian Jakob Tanner – has been adequately processed. Sources reporting on individual aspects of federal finances of prior decades include various publications of the Federal Statistical Office, the studies by the grand master of Swiss financial statistics, Jakob Steiger, and finally, Hanspeter Oechslin’s analysis of the Swiss federal taxation system.
For federal subsidies, it was necessary to subdivide the period 1913–1989 into four sections. Nonetheless, the structure of the official statistics permitted the creation of tables which each overlap by several years, so that users of this data can determine which series can be tied together.

Total Expenditures and Revenues of the Cantons 1894–1989

The total expenditures and revenues of the cantons have been documented in the Statistical Yearbook of Switzerland since 1894. When, in 1930, the Swiss Taxation Administration was commissioned with the processing and publication of the statistics previously handled by canton governments, a significant qualitative break resulted, as evidenced by a comparison of values in the two statistics for the years 1930–1932. In contrast, the transfer of the responsibility for the statistics to the Federal Finance Administration in the early 1970s had no impact on the comparability of data.

Federal, Canton, and Municipal Finances 1930–1989

While the first of the three abovementioned special publications issued by the Swiss Taxation Administration in the years 1973 and 1974 is exclusively dedicated to canton budgets, the subsequent volume deals with federal, canton, and municipal finance. The two publications do not contain annual series for the years 1930–1950, but only data for certain selected years. Federal revenues are documented on an annual basis since 1951; federal, canton, and municipal expenditures – deaggregated according to functional and economic categories – and canton and municipal revenues, subdivided into item groups, were only periodically surveyed or retroactively calculated, even between 1950 and 1965. For 1938, in his pioneering finance-statistical study of the financial needs of the federation, the cantons, and the municipalities, Karl Hänecke estimated functionally subdivided municipal expenditures in addition to municipal tax revenues. To the best of our knowledge, there has not been another attempt at retrospectively estimating municipal expenditures between the world wars.
The Swiss financial statistics have become increasingly more complex during the course of the 20th century. The borders between the federal, the cantonal, and the municipal levels became increasingly blurred, due to the growing importance of federal subsidies to the cantons and municipalities, the legally determined contribution percentages to the cantons of federal revenues, and the financial exchanges between cantons and municipalities and among cantons themselves. It is clearly possible to deal with gross values as long as operations are strictly limited to one of the three levels, but as soon as it becomes necessary to present data for cantons and municipalities combined, or for the entire public sector, there is a need to clean up and process the data. The official statistics indicate in which cases dual counts were avoided or retroactively subtracted. We included such notes unchanged.
There is already a table appendix in Hänecke’s dissertation that contains canton data as well as data at the municipality level grouped by canton. The retrospective overviews of the Swiss Taxation Administration and the annual series “Public Finances of Switzerland” (“Öffentliche Finanzen der Schweiz”) – handled by the Federal Statistical Office – also separately show the functionally grouped expenditures and revenues of the cantons and municipalities for each canton. The combined expenditures and revenues of cantons and municipalities, net of redundancies, are presented as well. We re-composed part of those figures and integrated them into this publication.

Taxation of Income and Fortune Categories in Canton Capitals during the Period 1914–1989

The final volume of the three special publications issued by the Swiss Taxation Administration is entitled “Forty Years of Taxes”. This publication primarily offers an overview of taxation, in canton capitals, of various categories of income and capital holdings from 1930 to 1973. We did not simply reprint this statistic, but extended it forward to 1989 and back to 1914 with the help of other sources. When interpreting the provided percent and per thousand figures, it must be considered that they relate to nominal values. In addition, the qualitative break that occurred in these statistics in the second half of the 1960s must not be dismissed.

SOURCE: «Public Finances» in Ritzmann/Siegenthaler, Historical Statistics of Switzerland, Zürich: Chronos, 1996, 939-943