Democracy by Competition: Referenda and Federalism in Switzerland

Competition is not only a prerequisite for the successful working of economics but also of political coordination systems. We argue that popular referenda and federalism are the key factors in maintaining competition in the political arena. Competitive economic or political markets require free entry and exit and the absence of regulations that prevent suppliers from being successful with the best product-be it goods or services in the form of policies-and prevent citizens from choosing freel