Regulatory Competition and Federalism in Switzerland: Diffusion by Horizontal and Vertical Interaction

The impact of regulatory competition on policy outcomes and particularly on policy innova-tion is widely debated among scientists from different fields as well as among policymakers. In this paper, Swiss cantonal regulation is studied in order to gain further insights into the policy impact of regulatory competition and harmonization. Starting from a theoretical per-spective that particularly emphasizes the beneficial impact of inter-jurisdictional competition on policy innovations, and a discussion of the existing empirical evidence on regulatory com-petition, the development of the common market, regulatory competition and harmonization in Switzerland across time is analyzed. In an econometric analysis of the extent of regulation at the Swiss cantonal level, some indicative empirical evidence on the main determinants of Swiss cantonal regulation is derived.