IESET.
Hypotheses·growth·hayek_decentralised_governance_swiss_cantonal_growth

Across 26 Swiss cantons 1990-2023, cantons with persistently lower effective corporate tax rates, looser regulatory burden, and higher Fraser-style sub-national economic-freedom ranks exhibit higher per-capita GDP growth, higher private business formation rates, and higher net inward migration of high-earning workers than cantons with persistently tighter regulation and higher tax rates.

This is the Hayekian prediction in microcosm: decentralised jurisdictional competition produces a discovery process that selects efficient policy bundles. Switzerland's 26-canton experiment with substantial fiscal and regulatory autonomy is the cleanest available test inside a single-currency, single-language- family, single-rule-of-law institutional environment.

INCONCLUSIVEengine/runs/hayek_decentralised_governance_swiss_cantonal_growth

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['swiss_fso:gdp_cantonal', 'swiss_fso:business_demography', 'swiss_fso:tax_migration_register']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['swiss_fso:gdp_cantonal', 'swiss_fso:business_demography', 'swiss_fso:tax_migration_register']

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 1 country or place units from 1990 to 2023, using a panel fe design, with fixed effects for canton and year.

what was measured
What changed
  • Cantonal effective corporate tax rate
  • Cantonal regulatory burden index
What we checked
  • Cantonal income per capita growth 5y
  • Cantonal business formation rate
  • Net high earner migration
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/hayek_decentralised_governance_swiss_cantonal_growth
1007550250199020072023CHE
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show cantonal_gdp_per_capita_growth_5y across 1 sampled countries over 1990–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for hayek_decentralised_governance_swiss_cantonal_growth. Published chart will be generated from engine/runs/hayek_decentralised_governance_swiss_cantonal_growth/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:52:50Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across 26 Swiss cantons 1990-2023, cantons with persistently lower effective corporate tax rates, looser regulatory burden, and higher Fraser-style sub-national economic-freedom ranks exhibit higher per-capita GDP growth, higher private business formation rates, and higher net inward migration of high-earning workers than cantons with persistently tighter regulation and higher tax rates. This is the Hayekian prediction in microcosm: decentralised jurisdictional competition produces a discovery process that selects efficient policy bundles. Switzerland's 26-canton experiment with substantial fiscal and regulatory autonomy is the cleanest available test inside a single-currency, single-language- family, single-rule-of-law institutional environment.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is falsified if at least 2 of the 3 outcomes do not show the predicted sign at p<0.05, OR if the business-formation outcome (the discriminator from accounting-relocation) is not significantly positive at p<0.05.

formal test & threshold
test:      panel_fe_cantonal_freedom_three_outcome_test
threshold: sign(low_tax → gdp_pc_growth) > 0 at p<0.05 AND sign(low_regulatory_burden → business_formation) > 0 at p<0.05 AND sign(low_tax → net_high_earner_migration) > 0 at p<0.05 REQUIRED: at least 2 of 3, INCLUDING the business_formation channel

Method

Template
panel_fe
Fixed effects
canton, year
Clustering
canton
Sample
1 countries · 1990 – 2023
Evidence type
associational

Canton-year panel, two-way FE, clustered by canton. Three parallel regressions on the three outcomes. Heterogeneity: report the French-speaking vs German-speaking sub-samples separately because institutional culture varies. Heterodox / social-democratic null is that low-tax cantons are simply attracting tax-avoidance activity rather than productive investment, so the GDP-growth correlation reflects accounting relocation not real growth. The business-formation outcome is the cleanest discriminator because accounting relocation does not require new firms to be founded.

Data

VariableSourceTransform
cantonal_gdp_per_capita_growth_5y
outcome
swiss_fso:gdp_cantonaltier 1
log_diff_5y
cantonal_business_formation_rate
outcome
swiss_fso:business_demographytier 1
level
net_high_earner_migration
outcome
swiss_fso:tax_migration_registertier 1
level
cantonal_effective_corporate_tax_rate
treatment
swiss_fso:fiscal_statistics_cantonaltier 1
level
cantonal_regulatory_burden_index
treatment
academic:swiss_cantonal_regulation_indextier 4
level
cantonal_top_income_tax_rate
treatment
swiss_fso:fiscal_statistics_cantonaltier 1
level
cantonal_population_density
control
swiss_fso:population_statisticstier 1
log
cantonal_industry_composition
control
swiss_fso:gdp_cantonal_by_sectortier 1
shares
language_region_fixed_effect
control
constructed:German / French / Italian / Romansh region indicatortier 5
categorical

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — hayek_decentralised_governance_swiss_cantonal_growth

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['swiss_fso:gdp_cantonal', 'swiss_fso:business_demography', 'swiss_fso:tax_migration_register']

Pre-registration

  • Claim: Across 26 Swiss cantons 1990-2023, cantons with persistently lower effective corporate tax rates, looser regulatory burden, and higher Fraser-style sub-national economic-freedom ranks exhibit higher per-capita GDP growth, higher private business formation rates, and higher net inward migration of high-earning workers than cantons with persistently tighter regulation and higher tax rates. This is the Hayekian prediction in microcosm: decentralised jurisdictional competition produces a discovery process that selects efficient policy bundles. Switzerland's 26-canton experiment with substantial fiscal and regulatory autonomy is the cleanest available test inside a single-currency, single-language- family, single-rule-of-law institutional environment.
  • Falsification rule: The hypothesis is falsified if at least 2 of the 3 outcomes do not show the predicted sign at p<0.05, OR if the business-formation outcome (the discriminator from accounting-relocation) is not significantly positive at p<0.05.
  • Falsification test: panel_fe_cantonal_freedom_three_outcome_test

Estimate

  • Error: no outcome variable loaded; missing: ['swiss_fso:gdp_cantonal', 'swiss_fso:business_demography', 'swiss_fso:tax_migration_register']

Variables resolved

Variables missing data

  • swiss_fso:gdp_cantonal (outcome, name=cantonal_gdp_per_capita_growth_5y) — vintage not on disk
  • swiss_fso:business_demography (outcome, name=cantonal_business_formation_rate) — vintage not on disk
  • swiss_fso:tax_migration_register (outcome, name=net_high_earner_migration) — vintage not on disk
  • swiss_fso:fiscal_statistics_cantonal (treatment, name=cantonal_effective_corporate_tax_rate) — vintage not on disk
  • academic:swiss_cantonal_regulation_index (treatment, name=cantonal_regulatory_burden_index) — vintage not on disk
  • swiss_fso:fiscal_statistics_cantonal (treatment, name=cantonal_top_income_tax_rate) — vintage not on disk
  • swiss_fso:population_statistics (controls, name=cantonal_population_density) — vintage not on disk
  • swiss_fso:gdp_cantonal_by_sector (controls, name=cantonal_industry_composition) — vintage not on disk
  • constructed: German / French / Italian / Romansh region indicator (controls, name=language_region_fixed_effect) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:50+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Hayek (1939 "The Economic Conditions of Interstate Federalism"; 1948 "Individualism and Economic Order"). Modern adjacents: Tiebout (1956), Bewley critique. Swiss cantonal autonomy is closer to a natural experiment than US-state competition because the cantonal policy space is genuinely autonomous on tax, regulation, and spending in ways US states are not.

Authored framework. Read the transparency note.