This book has investigated macroeconomic policymaking in order to make inferences about the nature of democratic institutions, to get a grasp on problems that may be inherent in them, and to understand how alternative formulations of these institutions might affect performance. It has focused on recent experience in the United States. The concentration on macroeconomic issues has facilitated the evaluation of performance. The concentration on one nation has facilitated an understanding of the importance of process in democracy, and it has permitted an assessment of the consequences of institutional changes over time in that country.

However, economic performance is only one of the many values that may be facilitated or hindered by democratic institutions, and a focus on one country obscures an understanding of the ways in which alternative institutions that vary across countries can affect performance. In this final chapter, we shall consider some ways in which the single country focus may be complemented by further investigation, though without speculating beyond macroeconomic issues. But first a reflection on some of the implications of the methodological approach used in much of the analysis.

DEMOCRATIC POLITICS AND ECONOMIC METHOD

The book has used economic analysis in a sense that goes beyond the obvious character of the subject matter. A fundamental characteristic of economics is the method of constrained optimization. Economics is about how to identify the choices that will maximize welfare functions or minimize loss functions, subject to the constraints of possibility.