Democracy and welfare economics Book

	Preface
1	Economics and politics	1
1.1	The size of the public sector	1
1.2	Economics and political science	2
1.3	Economic theory of political decision-making	5
1.4	Methodological individualism	6
1.5	Welfare economics	7
1.6	Centralisation and concentration	8
1.7	Democracy and bureaucracy	10
1.8	Political system and political process	11
1.9	Further outline of this book	13
2	Welfare and welfare optimum	15
2.1	Individual welfare	15
2.2	Social welfare	26
2.3	Optimum welfare	33
3	Negotiation	47
3.1	Freedom of exit and non-commitment	47
3.2	Self-interest and class-interest	48
3.3	The participation decision	50
3.4	Voluntary exchange	55
3.5	Game theoretical approach	60
3.6	Negotiations democracy in practice	79
4	Majority decision	87
4.1	Majority versus unanimity	87
4.2	Majority decision and collective consistency	93
4.3	Majority decision and social welfare	107
5	Representation	116
5.1	Elected representatives	116
5.2	The demand for government policy	117
5.3	The supply of government policy	128
5.4	Representation and social welfare	142
6	Implementation	148
6.1	The power of bureaucracy	148
6.2	Bureaucratic behaviour	154
6.3	Bureaucracy and social welfare	164
7	The political process	175
7.1	The political process as a number of production stages	175
7.2	The welfare effects of the four decision-making models	178
7.3	The public sector: a huge Leviathan?	181
	Notes	185
	References	191
	Index	204