The Endogenization of Government Behaviour in Macroeconomic Models

1. Front Matter

   Pages I-XI

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2. What this Book is All About

   • Ben C. J. van Velthoven

   Pages 1-6

3. The Traditional Theory of Economic Policy

   • Ben C. J. van Velthoven

   Pages 7-34

4. The Impact of Politics, A Survey of the Literature

   • Ben C. J. van Velthoven

   Pages 35-100

5. The Interest Function Approach

   • Ben C. J. van Velthoven

   Pages 101-128

6. The Endogenization of State Expenditure and Taxation in A Simple Keynesian Model

   • Ben C. J. van Velthoven

   Pages 129-154

7. An Application to the Netherlands

   • Ben C. J. van Velthoven

   Pages 155-184

8. A Dynamic Version of the Model with an Endogenous Social Power Structure

   • Ben C. J. van Velthoven

   Pages 185-202

9. Towards A Politico-Economic Theory of Social Security

   • Ben C. J. van Velthoven

   Pages 203-248

10. Towards A Behavioural-Theoretic Analysis of Budget Deficits

    • Ben C. J. van Velthoven

    Pages 249-292

11. Epilogue

    • Ben C. J. van Velthoven

    Pages 293-301

12. Back Matter

    Pages 303-367

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In chapter 2 we concluded that the present public choice and marxist approaches to the study of political processes, as far as relevant for the analysis of economic policy making, are unsatisfactory, for reasons of incoherency, insufficient empirical support, and lack of specificity~ It was suggested that a different approach to the subject might be fruitful. To that purpose, we now turn our attention to the so-called interest function approach to the study of politico-economic phenomena, that has been developed by Van Winden (1983). See also Van Winden (1987), Van Velthoven and Van Winden (1986). Without paying too much attention to the specific conduct of and intricate relationships between voters, politicians, bureaucrats and interest groups, the interest function approach intends to combine valuable elements of the marxist and public choice analyses. According to Van Winden (1983, p. 12) "this means that in studying the interaction between state and private sector, attention should be paid to: - social classes, and the impact of class/power relationships on political and economic processes; - the way that social power structures (involving the real control over state activities) are maintained or altered; - the relative autonomy of political processes (involving the state) and its consequences for, as well as its dependence on economic processes; - individual motivations; - the possibility of mathematical formalization. " Section 3. 2. will give a general introduction to the concepts and the line of argument of the interest function approach.

• Keynes
• econometrics
• economic policy
• economic theory
• macroeconomics
• social security
• taxation

• Department of Economics, Faculty of Law, Leiden University, Leiden, The Netherlands

  Ben C. J. Velthoven

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