The Partisan Politics of Gold: Switzerland and the Sale of Gold
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West European Politics ISSN: 0140-2382 (Print) 1743-9655 (Online) Journal homepage: http://www.tandfonline.com/loi/fwep20 The partisan politics of gold: Switzerland and the sale of gold Mark E. Duckenfield To cite this article: Mark E. Duckenfield (2006) The partisan politics of gold: Switzerland and the sale of gold, West European Politics, 29:1, 113-133, DOI: 10.1080/01402380500389315 To link to this article: https://doi.org/10.1080/01402380500389315 Published online: 20 Aug 2006. Submit your article to this journal Article views: 75 View related articles Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=fwep20 West European Politics, Vol. 29, No. 1, 113 – 133, January 2006 The Partisan Politics of Gold: Switzerland and the Sale of Gold MARK E. DUCKENFIELD m.e.duckenfield@lse.ac.uk This paper explores the relative strength of social, economic and political factors in determining public attitudes towards the sale of a portion of Switzerland’s gold reserves and how the money realised from these sales should be used. Partisan political allegiance and generational economic interest are the major factors in determining attitudes towards gold sales in Switzerland in the early 2000s. Cantons and individuals that had supported the Swiss People’s Party were more inclined to support its Gold Initiative than supporters of the Swiss Social Democratic Party and other parties of the left which actively campaigned against it. This pattern suggests that, contrary to the suggestions of previous studies, Swiss political parties can play a substantial role in framing political options in referendum campaigns. The Partisan Politics of Gold For over a century, political parties in Western Europe have played a central role in most aspects of political affairs – competing for public office, aggregating interests, integrating citizens into the political system, encoura- ging civic participation, framing political debates and educating voters on complex issues of public policy. However, over the past several decades, concerns have grown among politicians and scholars that political parties are losing their traditional salience (Dalton et al. 1984; Inglehart 1984). Nevertheless, some scholars argue that concerns about partisan dealignment are overdrawn and that partisan loyalties are resilient long-term bonds between voters and political parties (Bartolini and Mair 1990: 287). The academic discussion about ‘when parties matter’ in economic policy- making has paralleled these concerns about partisan alignment. Even if partisan attachments linger, do parties make a difference in policy outcomes? Manfred Schmidt argues that while the partisan composition of governments matter for policy formulation, a country’s particular institutional arrange- ments heavily circumscribe the political opportunities available to parties. Correspondence Address: m.e.duckenfield@lse.ac.uk ISSN 0140-2382 Print/1743-9655 Online ª 2006 Taylor & Francis DOI: 10.1080/01402380500389315 114 M. E. Duckenfield In countries with majoritarian electoral systems and strong central governing institutions, parties matter a great deal and can make decisive policy changes. In contrast, the role of parties is more limited in ‘semi-sovereign’ countries that have numerous veto players, strong counter-majoritarian constitutional arrangements and even co-governance between the nominal ruling parties and the opposition. These societies tend to experience policy inertia regardless of the party-political composition of the government (Scharpf 1988; Schmidt 2002). Other scholars have found support for variations on these partisan and institutional arguments in relation to government fiscal, unemployment, pension and general welfare state policies (Garrett and Lange 1991; Huber et al. 1993; Schmidt 1996; Garrett 1998; Swank 2002). Most of these debates have focused on parties as competitors in legislative elections, an area where the role of political parties is at its strongest. Referendums complicate policy-making by adding an additional veto player, the general electorate, to the political system in a manner which undermines the role of political parties as the aggregators of political interest and the government as policy-maker (Tsebelis 1995; Barducci 1998: 116; Tsebelis and Hug 2002). Studies that have looked at the role of Swiss parties in referendum campaigns, an area where single issue campaigning is at its most prominent, have tended to downplay the role of the major parties or to stress the limitations that referendums place on them (Kerr 1987: 135–6; Strøm 2000). These studies support the contention that political parties have less influence over outcomes compared with organised interest groups (Kobach 1993, 1994: 122–34; Linder 1994). There is some evidence that social movements and small, non-governing parties do make use of refer- endums to put pressure on the government to change its agenda; however, the influence of the governing parties is still seen as weak (Kriesi and Wisler 1996; Sela¨ la¨ 1999). Alexander Treschel and Pascal Sciarini pose a modest dissent from the prevailing position that referendums empower ‘the people’ at the expense of elites and the Swiss parliament by arguing that elite consensus in the national legislature can be a powerful influence in favour of the Swiss government’s position during a referendum campaign (Treschel and Sciarini 1998). In this article, I challenge the view that referendums ‘usurp’ Swiss parties of their role in articulating political preferences, thus rendering them redundant in referendum campaigns (Kobach 1994: 123). Using an analysis of voting patterns and public opinion polls, I argue that political parties in Switzerland can initiate referendums to raise their public profile and draw attention to differences between themselves and their rivals. In the case study presented here – a referendum in support of using the proceeds of Swiss gold sales to benefit the state pension system – the Swiss People’s Party (SVP) used the special interest appeal of a referendum to target older voters in an attempt to expand the party’s appeal beyond its own traditional supporters to a particular demographic subset of the population. The SVP’s role in successfully framing the issue is also apparent in the attitudes of its The Partisan Politics of Gold in Switzerland 115 younger members who were substantially more likely to back their party’s referendum than supporters of other political parties. Domestic Background In 1998, the Chairman of the Swiss National Bank (SNB), Hans Meyer, and the Federal President, Arnold Koller, announced a plan to sell one-third of Switzerland’s gold reserves in order to rationalise the SNB’s foreign reserves and provide an endowment for a Solidarity Association (Solidaritatstiftung) for victims of humanitarian disasters (Swiss Finance Ministry 1997). The plan met with widespread popular resistance as many Swiss citizens were reluctant to part with a major portion of their national gold reserves while many also resented the linkage between the Solidarity Association and accusations of Swiss complicity in the Holocaust. With support from three of Switzerland’s four major parties, the Swiss government pushed ahead with its plans, changed the Swiss constitution, won a referendum on its constitutional changes, and then re-wrote both the Swiss National Bank and currency statutes. Under the new legislation the SNB embarked on its plan to sell 1,300 tonnes of gold over several years, beginning in 2000. However, while the SNB has gone forward steadily with monthly gold sales, it has failed to distribute the proceeds of these sales for any purpose, retaining the monetary sales in a separately-managed account that will be distributed once the government decides what to do with the funds. Political parties of the left and right have proposed various uses for these funds, but none of them has reached fruition. Two popular initiatives, one involving support for the Swiss public pension system and the other a division of the gold sale profits between the federal government and the cantons, have been rejected in national referendums, leaving the final status of the $16 billion raised through gold sales uncertain. This paper explores the relative influence of social, economic and political factors in determining public attitudes towards the sale of a portion of Switzerland’s gold reserves and how the money realised from these sales should be used. International Background For thousands of years, gold has been money. Over the millennia, it has served as the central measure of value for financial systems as diverse as those of the Phoenician, Venetian and British empires. The international gold standard of the late nineteenth and early twentieth centuries exported what was then the British standard to the rest of the developed and much of the developing world. The traditional gold standard provided one of the bases for the first age of globalisation and helped provide monetary stability during a period of unprecedented trade and economic expansion. Beginning in 1873, Switzerland allowed full convertibility of the Swiss franc into gold. During the 1930s, Switzerland along with the rest of the world, suspended 116 M. E. Duckenfield gold convertibility. After the Second World War, Switzerland participated in the Bretton Woods system that established a dollar–gold exchange standard. Switzerland’s large trade surplus and Zurich’s attractive position as an international financial centre