Financial issues have played an important role in the electoral campaign this year in Japan.
EPA / Frank Robichon
The use of direct democracy to fix budgets and taxes as in Switzerland could help Japan balance its accounts, explores a Japanese economist. And strengthen confidence in politics.
When sliding the bulletin in the ballot box, many choose this or that party according to the tax and budgetary policies proposed during the campaign.
Ditto in Japan where the recent elections were marked by budgetary themes: value added tax, free education, increase in the defense envelope. On July 20, a large number of electricities and voters voted according to these questions, but without having the certainty that their choices will be followed by effects.
A principle would like public finance issues to be endorsed by democratic means. In Japan, it is Parliament that takes care of it in the name of the people, according to a so -called representative democracy.
But does Parliament respond to what a majority of the population want in budgets? Specialist in public finances at the Ibaraki University, Yuta Kakegai recalls that Japan has the highest public debt in the world.
“But compared to other countries, public opinion in Japan is actually more favorable to budget cuts and the reduction of debt,” he explains. Paradox, the state continues to go into debt while the population wishes to see this slate reduced. Which creates a gap.
Tax democracy as a brake on expenses
Yuta Kakegai, specialist in financial sciences in Japan and author of a recent work on tax democracy in Switzerland.
Photo made available
Where does this big gap come from and what would it be necessary to remedy it and guarantee “a tax democracy”? Yuta Kakegai sketches several ways of exit in her book The Horizon of Fiscal Democracy: Autonomy, Diversity and Direct Democracy in Switzerland. Literally in French “the horizon of tax democracy: autonomy, diversity and direct democracy in Switzerland”.
The academic speaks of “imperfect democracy” if it does not influence public finances. “Tax democracy is necessary to guarantee principles and go beyond speeches taking into account economic reality”. It designates Switzerland as a typical tax democracy.
It demonstrates in a concrete way, he writes, that in a system where public finances are controlled by democratic means, expenses do not sore.
In 2023, Switzerland’s public debt amounted to 39.2% of the gross domestic product (GDP), while the debt rate remains greater than 200% of GDP in Japan.
Understand the Ba-Ba of Finance
But in the early 1990s, with the bursting of the real estate crisis, Switzerland had to face a budget deficit. Reforms were undertaken in the mid -1990s, notes Yuta Kakegai in her book.
He cites the transition from turnover tax (ICHAExternal link) to the value added tax (VAT), the introduction of a debt brake and the objectives of reduction of the deficit. A policy that has led Switzerland to new surpluses.
According to the author, “neoliberal reforms” were engaged in the idea of first creating a “small board” to apply them. But these radical proposals were swept by referendum, while at the same time an increase in taxes accompanied by a budgetary discipline always found more echo in public opinion.
In Switzerland, he points out, “during votes at the national or local level, brochures are distributed in each household to review the ins and outs of financial issues”. These cumulative efforts play, to hear it, a crucial role in better understanding the ba-ba of finances.
He also adds that “democracy is not at the origin of the debt crisis”, but desperate that it has become “an empty shell”.
Swiss tax democracy
What are the tools used in Switzerland to avoid a situation like in Japan? For Yuta Kakegai, a financial democracy first requires “participation” and “deliberations”, two areas where Switzerland excels.
The votes that stand there regularly through popular initiatives and referendums are an example of how to control public finances through the participatory route. In Switzerland, citizens who have the right to vote can at any time launch an initiative or a referendum with, as condition, a number of signatures required.
Plus
Plus
Swiss democracy
How the system of direct democracy works in Switzerland
This content was published on
30 mar. 2025
Swiss popular votes are often envied abroad. But what about the instruments of direct democracy that are the popular initiative and the referendum? And how did the current system evolve? Explanations.
Read more how the direct democracy system works in Switzerland
Yuta Kakegai observed that for questions related to budgets and finances, it is locally that participation is the strongest. In more than 1650 Swiss municipalities, the municipal assembly to which the electoral body is invited decides on taxes and budgets.
Cities like Aarau have activated an automatic mechanism which, when a threshold is crossed in the budgetary increases, the compulsory referendum starts. None of that in Japan where policies have carte blanche at the local level as well.
Decisions made by simple majority during a referendum also do not necessarily reflect the wishes expressed by all parties. Public finance experts like Yuta Kakegai consider that participatory instruments are essential for better democratic control. Deliberations, discussions and consultations must take place beforehand.
The Japanese academic greets the systemExternal link as he is practiced in Switzerland. He recalls the main lines in his work. Before submitting a bill to the Parliament, the Federal Council, the Swiss government, consults the cantons, the municipalities and the political parties, as well as all of the organizations concerned.
Japan certainly has participatory and deliberative mechanisms such as petitions and motions. As well as “commentsExternal link audiences, ”he adds. But, according to him, these contributions do not work properly.
If at the local level, it is possible to highlight certain themes for a referendum, the decision to carry out this referendum remains the responsibility of the authorities. And the results that would result from it are not binding.
“Japan could introduce a system with a vote as soon as a number of signatures are collected,” he suggests.
Limits of participation and deliberation
But in Switzerland too, the wishes of the people are not always rewarded with a suitable financial situation. The participative and deliberative mechanisms also show certain limits. Locally, the processes can be long and repetitive. In 2019, in the city of Olten, the referendum launched against an increase in taxes decided by the Parliament had led, for example, to the freezing (Shutdown) of the annual budget.
“However, the opinions issued by minorities may have the impact in Switzerland,” notes the author. In particular when a locality or a canton adopts a policy that part of the beneficiaries judges far too radical.
In 2005, the canton of Obwald wanted to introduce declining taxes for wealthy people. This once led the Communist deputy Romand Josef Zysiadis to move from the canton of Vaud to Obwald after a majority of the population approved the law. The case had caused a stir in the media. With Obwald electricals and voters, he had used to the Federal Court (TF), the highest legal body in the country, to oppose this reform. The TF had finally proved him right, leading to the cancellation of this law and contradicting cantonal justice which had not wanted to get into matters.
“If democracy is only understood as dialogue to achieve consensus, divergent opinions are excluded,” analyzes Yuta Kakegai. “Protest and civic commitment are key elements of all democracy, even if some means are not always legitimate,” he continues. But, according to him, there is in Switzerland “an active culture of engagement in social movements” which serves as a basis for initiating appeals.
He finally explains that in Japan, “people make it as if they did not participate in demonstrations or as if there was no sense to do so”.
Maximum efficiency
Number of electricities and voters in Switzerland share the feeling that this system allows them to influence politics. In 2023, a European survey ranked Switzerland first in this area on 28 countries surveyed. Only 10% of the Swiss population would refute this thesis.
Text reread and verified by Benjamin von Wyl, translated from German by Alain Meyer/Op