Federalism and direct democracy, notably when faced with distributional choices of a territorial nature, can either block or enable each other. Nevertheless, in 2004 Switzerland managed to radically overhaul its system for the redistribution of financial resources between cantons, while also re-allocating several public powers to either the national or regional level. Using a rational choice approach, we investigate why a two-thirds majority of Swss citizens and 23 out of 26 cantons agreed to the most widespread reform of Swiss federalism since the 19th century in the popular vote of 28 November 2004. We will show how the Swiss system of constitutional reform, by demanding a popular as well as a cantonal majority, incentivised creative solutions in search of this double majority. The many regional winners became interested in selling the reform as a national success-story that even managed to convince some (but not all) of the prospective losers.
