ABSTRACT
This chapter outlines the structure of a new model of governmental budgeting. It is based on the idea of conflicting spending expectations by interest groups mediated by a governmental bargaining process. The claims of the interest groups model are based on the assumption that society is composed of interest groups able to influence governmental budget decisions. As long as the budget proposals of the government satisfy the levels of expectations of an interest group hypothesize that the group has no complaints about the proposed budget. The tolerance for performance gaps is negatively correlated to the power of a group. The claims resulting from the evaluation are transmitted to the governmental decision-making model where they are used to modify the budget proposals. Among other things, the behavior of the model must be analyzed for more realistic scenarios with several budget variables and with exogenously triggered changes of the political regime.
