ABSTRACT
This chapter discusses a framework is developed akin to F. W. Scharpf's model - that is used to analyse political economic interaction in the Netherlands. It provides a survey of the main characteristics of the Dutch political economic institutions. The preferences of the middle income groups depend on the economic circumstances and vary from lower taxation to more social security spending. Central in Scharpf's analysis is the contrast between Keynesian and monetarist macroeconomic policy and the consequences for inflation and unemployment. The working mechanism of Scharpf's model is determined by the assumption that labour unions only act on the basis of economic self-interest. Whether the economic outcomes really are advantageous is subject to international economic influences and to the extent the labour movement really succeeds in moderating wage claims while the government concentrates on employment policies. The oil crisis of 1973 and a deterioration of the international economic situation hampered the realization of central agreements during the Den Uyl government.
