Economic Freedom of the World

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Economic freedom of the World

Introduction

The paper reviews the financial crisis and effect of recession in Switzerland. We will also discuss the policy responses along with the political processes as they grew within the regions. The long term economic planning and performance of Switzerland is main focus of the paper as we analyze the important highlights of the economy starting from the year 2000 till date.

Switzerland's 2008 EFW Index

Switzerland is fortunate enough to be ranked on the 4th position on the Economic Freedom ratings with 8.08 index points. Switzerland is ranked first out of 43 countries in the European region, and its overall score is much higher than the world average. The country is recognized to have high levels of investment freedom, trade freedom, financial freedom, property rights, business freedom, and freedom from corruption. It also ranked eighth out of 178 countries in Transparency International's Corruption Perceptions Index for 2010 (Gwartney, Lawson and Hall, 2011). There is strict legislation in place to control corruption and enforcement procedures against domestic corruption are effective: giving or accepting a bribe is subject to criminal and civil penalties, including imprisonment. The country's labor regulations are relatively flexible and generally, the labor-management relations are cordial (Porter, 2003).

Switzerland's Economic Analysis

In 2010, Switzerland was ranked first in the World Economic Forum's global competitiveness index for its excellent business environment and technological innovation. Although Switzerland has a strong capacity for innovation, it lags behind in terms of entrepreneurship. A 2010 study by the Swiss-American Chamber of Commerce and Booz & Company has raised questions about Switzerland's ability to establish new industries and startup companies to take on competition from global entrepreneurs. Changes are required to promote an entrepreneurial culture that meets the challenge of a growing knowledge economy and increases competition from emerging countries (Gwartney, Lawson and Hall, 2011).

The country was placed 27th in the World Bank's ease of doing business index in 2011, which indicates a relatively conducive business environment. In this regard, the Swiss regulatory environment guarantees the freedom to start, operate, and close a business. Corporate tax rates are low compared to many other European countries, which makes it an attractive destination for investment.

Despite these positive indicators, the government has lagged behind those of many other countries with regard to introducing competition in select product and services markets. The government continues to influence the prices of agricultural goods and pharmaceutical products, while the pricing of the state-owned utility services are influenced through subsidies (Porter, 2003).

The cantons and communes, the regional and local bodies of Switzerland, have successfully implemented the environmental policies promoted by the federal government. There has been all-round co-operation among stakeholders. Recent environmental policies have focused on partnerships with businesses and civil society, applying the "polluter pays" principle. The country has been able to achieve its targets on some parameters, largely as a result of increased cooperation.

However, Switzerland must improve its environmental performance a great deal. Although emissions of greenhouse gases (GHGs) as a result of economic activity ...