As highlighted in Chapter I, the relatively poor performance of the Swiss economy over the past 20 years has mainly structural roots, with cyclical factors and negative shocks playing a lesser role. Human resources are well used and highly qualified, thanks to a flexible labour market and a good education system, which explains to a large extent the high living standard. However, several markets have not functioned well and the competition framework has not provided conditions conducive to greater dynamism. This has resulted in sluggish productivity growth which largely explains the lacklustre performance of the Swiss economy. While there is a long-standing tradition of maintaining a business-friendly climate, this often translates into a mild attitude towards anti-competitive behaviour. Since the early 1990s, reforms have aimed to improve the competition framework, although the range of problems addressed is sometimes narrow, the pace of reform is slow and initiatives are often taken in reaction to developments in neighbouring countries. Moreover, reform attempts have sometimes been blocked by popular vote, perhaps because the large potential benefits of liberalisation and their compatibility with legitimate security concerns are not well understood and need to be better explained. This chapter will highlight the potential gains from reforms, pointing to key areas where efforts would be most beneficial...