Torsten Persson

Guido Tabellini

What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis. Combining the best of three separate traditions—the theory of macroeconomic policy, public choice, and rational choice in political science—Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.

Explaining Economic Policy

Political Economics

Barry Eichengreen

Gerard Roland

Charles Wyplosz

Erik Berglöf

Erik Berglof

Monitoring European Integration was established in 1990 as an annual series of reports on the progress of economic integration in Europe. The objective of the reports is to raise the level of public discussion on European policy issues. Monitoring European Integration combines intellectual rigour with attention to key policy issues and is the only analysis of European integration that is specifically aimed at both European and non-European audiences. The series offers a distinctive and valuable forum for discussions of European economic policy which are analytically rigorous and yet accessible to policy-makers. The European Convention, which meets from March 2002-03, will make recommendations to heads of states on how to better run affairs in the EU. This report examines the various rationales of how to apportion responsibilities and make decisions, and offers a number of wide-ranging proposals.

A Political Architecture for Europe

Built to Last

Guido Tabellini

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