1. Introduction.- 1.0 General introduction.- 1.1 Scope of the book.- 1.2 Organization of the book.- 1.3 Some remarks on the terminology used.- I Theories of government behavior.- 2. Discussion of the literature on government behavior.- 2.0 Introduction.- 2.1 The median voter model and its extensions.- 2.2 The theory of bureaucracy and political behavior.- 2.3 Political business cycle models.- 2.4 Some preliminary conclusions.- 3. Government popularity, reelection efforts and ideology.- 3.0 Introduction.- 3.1 The Frey-Schneider model.- 3.2 A multinomial logit model of voting behavior.- 3.3 Application to the Netherlands 1970-1987.- 3.4 Politico-economic reaction functions.- 3.5 Empirical results for the Netherlands 1970-1986.- 3.6 Concluding remarks.- 4. The interest function approach.- 4.0 Introduction.- 4.1 The interest function approach.- 4.2 Application of the interest function approach.- 4.3 Discussion.- II Government behavior: a time-series analysis.- 5. A behavioral model of government expenditure and transfer payments.- 5.0 Introduction.- 5.1 The model.- 5.2 The solution of the model.- 5.3 Discussion of the solution of the model.- 5.4 The growth of government.- 5.A List of symbols used in Chapters 5 and 6.- 6. An empirical application to the Netherlands: 1952-1986.- 6.0 Introduction.- 6.1 The relative influence weights and the political system in the Netherlands.- 6.2 Multiple positions, mobility and the transition weights.- 6.3 Summary of the theoretical results: towards empirical estimation.- 6.3.0 Introduction.- 6.3.1 Estimation method.- 6.4 Empirical results for the Netherlands 1952-1986.- 6.5 An evaluation.- III Government behavior: a cross-section analysis.- 7. Local government behavior.- 7.0 Introduction.- 7.1 Local government behavior and intergovernmental transfers.- 7.2 Determinants of intergovernmental grants.- 7.3 Fiscal illusion and the so-called flypaper effect.- 7.4 Towards a model of central and local government behavior.- 8. A theoretical model of a multi-level government.- 8.0 Introduction.- 8.1 An overview of the model.- 8.2 Decisionmaking at each level.- 8.3 The general solution of the model.- 8.4 Discussion.- 8.A List of symbols used in Chapters 8 and 9.- 9. Empirical analysis of local and central government behavior in the Netherlands.- 9.0 Introduction.- 9.1 The data.- 9.2 Relative influence weights and preference weights.- 9.3 Application I: Determinants and results of decisionmaking at the local government level.- 9.3.0 Introduction.- 9.3.1 Estimation method.- 9.3.2 Empirical results for level L.- 9.3.3 Remarks.- 9.4 Application II: the influence of local governments on the central government.- 9.5 Application III: the effects of institutional reforms on local government decisionmaking.- 9.6 Concluding remarks and summary of part III.- 10. A summary and evaluation.- 10.0 Introduction.- 10.1 Summary of the book.- 10.1.0 General summary.- 10.1.1 Summary of Part I.- 10.1.2 Summary of Part II.- 10.1.3 Summary of Part III.- 10.2 An evaluation.- 10.2.0 Introduction.- 10.2.1 The interest function approach revisited.- 10.2.2 Multi-level versus centralized government behavior.- 10.2.3 The implications of government behavior for private markets.- 10.2.4 The role of the time-horizon for the political decisionmaking process: constitutional economics.- Notes.- References.- Author index.

project was the development and application of a model of central and local government behavior. It was carried out in collaboration with the Dutch Department of Home Affairs, during the period September 1985 - April 1987. The project's aim was the study of the determinants of local government decisionmaking in the Netherlands and the implications of so-called intergovernmental relations for local government behavior. During that project I was assisted by Sander Helder and Marc Tigche1aar. The results of that project appeared in a book, co-authored by Frans van Winden, entitled Gemeentefinancien en Gedecentra1iseerde. Bes1uitvorming(Loca1 Public Finance and Decentralized Decisionmaking). This book is, for the time being, the end product of my research on government behavior. Much more research is needed on the study of government behavior and the application of models which, from an economic point of view, focus on the implications of the interaction between economics and politics. The knowledge of this process is not only interesting as such, but also from a practical point of view. without a good positive analysis of the behavior of the government in modern industrialized economies it is neither possible to see through its operations nor to use its policies as an effective instrument in the pursuit of economic targets.