Monarchy and Democracy in Liechtenstein

by Dr Alastair Paynter

In 2021, 44 states worldwide have a monarch as Head of State. Of these, sixteen are part of the Commonwealth (although this will be reduced to fifteen when Barbados becomes a republic). In Europe alone, there are twelve sovereign monarchies—Andorra, Belgium, Denmark, Liechtenstein, Luxembourg, Monaco, the Netherlands, Norway, Spain, Sweden, the United Kingdom and Vatican City. In most of these states, the power of the monarch has been drastically reduced over the last century to the extent that the roles are largely symbolic and ceremonial. In others, like the United Kingdom, the monarchy does still possess more powers than most imagine, but has over the course of modern history tended not to use them. Many today consider monarchical power to be inherently anti-democratic.

However, one curious case-study to the contrary is the Principality of Liechtenstein. This tiny, Alpine microstate lies nestled between Switzerland and Austria, and has a population of only 38,000. A relatively poor agrarian country just a century ago, it has since grown into one of the most prosperous states in the world (it has the third highest GDP per person in the world when adjusted for purchasing power parity), with an economy rooted in manufacturing and finance. Yet what makes Liechtenstein’s politics so unique? It is the only state in the world whose constitution balances a strong, active monarchy with both representative and direct democracy. There are frequent referendums on legislative measures and the people themselves can bring measures to the table with the popular initiative. Yet, at the same time, the ruling Prince possesses a level of political power unheard of in other modern European states. He can veto any law, dismiss any government or minister at will and appoint judges. Such powers have the support of significant portion of the population. In fact Prince Hans-Adam II has considered them essential to a meaningful monarchy, rejecting the idea that ‘the Prince should be no more than a hand-shaking puppet for the Government, which is partly the case in other monarchies.’            

The story of Liechtenstein’s constitutional development is a fascinating one. The Principality’s name comes from the family name of its rulers, the Liechtensteins. In 1699, Hans Adam I, whose grandfather Karl had been made a hereditary Prince of the Holy Roman Empire by Ferdinand II in 1621, purchased the Lordship of Schellenberg, followed by the County of Vaduz in 1712. In 1719 Emperor Charles VI decreed that Schellenberg and Vaduz be united into one territory, the new Principality of Liechtenstein. After the dissolution of the Holy Roman Empire in 1806, Liechtenstein was incorporated into the new Confederation of the Rhine, its Prince no longer owing any feudal obligations beyond the Principality itself. In the century following the Napoleonic wars, Liechtenstein had a number of successive constitutions—in 1818, 1862 and then 1921—each one more liberal than the last. By avoiding involvement in the First World War, the royal family managed to avoid the fate of their close neighbours in Austria, whereupon their national policy turned west to become more closely aligned with Switzerland, with whom it shares a customs and monetary union. Despite its precarious position, and a failed Nazi putsch, Liechtenstein, like Switzerland, managed to maintain its neutrality during the Second World War.            

Swiss influence has been telling in one very important way. In the 1921 constitution, sovereignty was rooted in both the Prince and the people, and following the Swiss example, referendums were introduced. Through the referendum and the popular initiative Liechtenstein enjoys a level of direct democracy unheard of in nearly the entire rest of the world. The most recent significant changes to the constitution occurred in 2003, when the people overwhelmingly voted in favour of Prince Hans-Adam II’s* controversial proposed changes to the constitution. The changes were criticised by the Council of Europe and widely reported at the time in the world’s media as a ‘regressive’ step away from modern constitutional monarchy and back towards the absolute monarchy of Europe’s past. The reality is quite different. While Liechtenstein certainly balances the old and the new, it would be a mistake to simply see it as a kind of high-tech, anachronistic holdover from the Holy Roman Empire. For one thing, owing to Hans-Adam’s libertarian philosophy, individual municipalities can vote to secede from the Principality and the people can even vote for the abolition of the monarchy. Such a move is highly unlikely, however, given the popularity of the monarchy, a fact cemented by the regular, extensive engagement of the royals with ordinary citizens. In fact, a counter-referendum to curtail the Prince’s power was defeated in 2012, with 76% people voting against. While containing many ‘traditional’ elements, Liechtenstein is very much a modern monarchy, albeit one of a very different mould from other European states. It may be a tiny state, but its successes over the past century certainly merit greater attention. It shows that decentralised democracy can indeed work well with traditional monarchic authority. It also suggests that the popular conception of political modernity as a trend towards either republicanism or weaker purely ceremonial monarchy is at best misleading.

* although Hans-Adam is the reigning prince, by constitutional convention, his son, the Hereditary Prince Alois became regent in 2004.