In the last quarter century, the naïve simplification that the sole aim of governments was the welfare of citizens has been abandoned, and it is recognized that the government is a positive actor on the economic stage with its own interests. Positive political economy consists of attempts to explain economic policies, which require knowledge of how the government is constituted, how it takes decisions, and on what principles, if any, it acts. Government decisions are collective decisions, and so the theory of collective decision and voting is relevant, and is examined. This heterogeneous chapter examines various attempts to explain government behaviour using economic concepts. It is concluded that little progress has been made in discovering any general truths.
Keywords: autocracy; collective choice; democracy; endogenizing government; growth of government; median voter; minorities; policy formation; policy reform; protection; voting
Chapter. 8439 words.
Subjects: Public Economics
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