The Impact of Politics, A Survey of the Literature

Abstract

In chapter 1 we concluded that public sector decision making may well have certain regularities, but that in order to get a better insight into these regularities political processes should explicitly be taken into account. In this chapter we present a critical review of the wide-ranging theoretical approaches and the — mostly rather scattered — empirical findings that figure in the literature on the impact of politics, political processes and institutions on (macro) economic policy. This literature belongs to the research fields of public choice — mainly — and Marxian economics. The literature is rather novel, with much incoherence still, and with mostly ambiguous empirical results up till now. At this moment, it is not evident which ideas, approaches, hypotheses should be rejected, and in favour of which alternatives. For these reasons, it seems very useful to give the literature involved a more or less full treatment. Those readers who are already familiar with the literature, may prefer to skip to section 2.8 where the main lines of argument are summarized and the conclusions are drawn.