Swiss coronavirus policy and companies

The project examined how fiscal policy, institutional structures, and firm behaviour interacted during the COVID-19 pandemic in Switzerland. Combining novel data collection with empirical methods from causal inference, political economy, and data science. It generated systematic evidence on how cantonal fiscal measures, short-time work schemes, and inter-cantonal interactions affected firm survival, business expectations, and economic stability. The findings offer concrete guidance for future crisis management.

The Covid-19 crisis required rapid and large-scale policy responses. In a federal system like Switzerland, responsibilities are shared across federal and cantonal levels, creating both flexibility and coordination challenges. At the same time, firms’ expectations and behaviour play a central role in how policies translate into economic outcomes.

The aim of the project was to understand how fiscal policies and non-pharmaceutical measures are designed and implemented in a federal system, how they affect firms’ expectations and outcomes, and how institutional settings shape policy effectiveness during crises.

The findings show that support measures' effectiveness also depends on communication, timing and coordination.

Communication and timing: Clear, credible fiscal policy announcements significantly improved firms’ expectations even before implementation. Separate estimates suggest that targeted cantonal support lowered monthly bankruptcy rates in the affected sectors and cantons by around 0.05 percentage points two to three months after announcement—roughly half their 2019 average of 0.1% per month.

Targeted support: Short-time work schemes helped stabilise employment, improve firm survival and reduce social costs.

Coordination: Decentralised decision-making allowed cantons to adopt measures to local economic conditions. At the same time, cantonal decisions and developments were interconnected. Stronger coordination and clearer responsibilities between federal and cantonal authorities could improve economic stabilisation measures in future crises.

Comprehensive data: A key project outcome is a dataset covering 1’330 fiscal support measures announced during the pandemic at the federal level and across all 26 cantons. In future crises, such tools can help detect economic disruptions and assess policy effects on businesses in real time.

For future crises, timely monitoring of economic developments is essential. The Web-based Affectedness Indicator developed in this project provides valuable insights for policymakers. It helps improve understanding of the interactions between economic policy measures at both the federal and cantonal levels and their effects on businesses. This can support the design of future targeted and credible interventions and improve coordination across cantons. For research, the project demonstrates the value of combining new data sources with causal methods to better understand crisis dynamics and policy impacts.

Drivers, impacts and interrelationships of cantonal policies and firm behaviour during the pandemic years in Switzerland

The publications of the project can be found in the SNSF Data Portal.