Recent attempts to incorporate optimal fiscal policy into NewKeynesian models subject to nominal inertia, have tended to assume that policymakers are benevolent and have access to a commitment technology. A separateliterature, on the New Political Economy, has focused on real economies...

In this qualitative sociological and quantitative economic policy paper, we start out from the assumption of a very recent European Commission Background paper on the "Efficiency and effectiveness of social spending", which says the effectiveness of social spending can be defined by the degree...