Political decision making was the exclusive subject of political science and remained exogenous in the analitical framework of economics. However, the recent development of public economics has changed the situation. The social choice approach deals with collective decision making procedures such as the voting mechanism. The public choice approach regards a political decision as a result of rational behaviors of various agents taking part in the political process. These approaches are principal components of public economics, and a political decision is an endogenous variable for both to solve. This seems one of the distinctive features of public economics.
These attempts to extend the application area of economics beyond the market mechanism to the political process have brought out many meaningful contributions. However, these expansional efforts in economics would come to the limit as long as we stick to the conventional framework of economics, wherein the utility function of each unit is presumed to be given and to remain unchanged. This presupposition prevents economics from handling the consensus formation in the political process.
The democratic political process has two stages. One is the stage of decision making or the voting stage. The other is the stage of consensus formation, preceding the voting stage. The latter is a communication process, in which the cognitive system of each decision unit should be supposed to have some sort of possibility of transformation. If there is no room for any transformation, a consensus is no more than another name for a very special situation where all members have the same political opinion by accident.
The cognitive system of a person is considered to be a system of accumulated informations and to keep self-organizing in the flow of information. We examine, in this paper, the natures and the limits of the economics of the political process from the viewpoint of communication and consensus.

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In recent years, in many advanced Western countries, tax reform has become one of the most hotly debated issues in the area of political economy. Lively discussion and evaluation of the existing tax systems and country-specific proposals for tax reform abound. But, who is empowered to judge the necessity of tax reform, and according to what criteria? Traditional public finance based on welfare economics has implicitly assumed that government has perfect information and that it is a benevolent dictator. Accordingly, it is argued that government will correctly perceive the necessity of tax reform, basing its conclusion on exogenous traditional tax criteria.
From the public choice perspective, however, tax reform is regarded as a means by which governmental decision makers and others seek their own privateinterests, where suitable constitutional restrictions are lacking. Therefore, the realization of a tax reform proposal in the real world may result from the interaction of whole set of rent-seeking behavior of each actor.
The purpose of this paper is to explore what kinds of tax criteria individuals at the constitutional stage will choose to avoid becoming a victim of the tax system, which serves the private interests of government officials and/or various interest groups. This paper uses nearly the same constitutional framework as Brennan and Buchanan (1980) . In addition to their constitutional criterion of binding, I have logically derived new constitutional criteria on the basis of unanimous constitutional agreement among individuals, assuming the minimax behavioral hypothesis. These constitutional tax criteria suggest that it is important how individuals in advance artificially devise and institutionalize the constitutional choice setting for tax rules.

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In this paper, I investigate bureaucratic behavior of the Postal Savings Bureau (PSB) of the Ministry of Posts and Telecomunications, and present the following hypothesis: PSB maximizes the amount of the postal savings funds.
The funds as postal savings must all be redeposited in the Trust Fund Bureau of the Ministry of Finance, and these funds are in-vested in the Fiscal Investment and Loans Program by the Ministry of Finance. From the viewpoint of political economy, it is “individually” rational for PSB to invest its own funds directly in government bonds, government guaranteed bonds, etc. This is why PSB has been intending to develop and provide new services and invest its own funds directly for the last decade. Futhermore, my hypoth-esis also suggests that PSB may intentionally have underestimated the amount of the Postal Savings Special Account deficit.

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As far as policy-making goes, the weight of the ministerial and other organs of nation-al government is on the descendence while that of the ruling Liberal-Democratic Party (LDP) through its Policy Board is on the ascendence. This party-above-government trend seems to be accelerating.
As a political party, LDP shapes its political will through the activities of its Policy Board. Legislative bills, reflecting LDP'S will, are presented to the Diet. Budgetary bills, law enacting bills and LDP'S policies are all deliberated by the Policy Board before they go to the Diet. Under the system of parliamentary democracy and government by parties, it is quite natural that the Policy Board as the organ of LDP to adjust, determine and push party policies should acquire powerful influence. In the recent years, the weight of the Policy Board has been steadily waxing.
Over a long period of time starting with the decade of confusion immediately follow-ing the end of World War II and ending with the years of rapid economic growth, the Policy Board played no more than the role of a cheer leader for the bureaucratic machines of the executive branch of government. But its function took a turn when the country become menaced with fiscal crisis on the do-mestic scene and forced into involvement in summit diplomacy on the internapional scene. Figuratively speaking, the needs have been expanding while the pie has not; the adjustments required are so complex and extensive that the bureaucratic machines cannot handle them because of their vertical structure and their fierce jealousy of jurisdictional turfs. It is this situation that brought to fore those politicians who have learned the bureaucratic know-how of policy-making and are well versed in the art of arbitrating between con-flicting interest.
The problem is, however, that the broiler “common good” is of secondery concern to these people. This is one of the biggest rea-sons market liberalization in Japan has so far proceeded only at a snail's pace. Liberal Demacratic politicians must learn to negoti-ate with the U.S. from a broad and balanced perspective.

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This paper considers the role of information in executing the institutional reform. Each individual is assumed to be ex ante faced with the uncertainty about effects of institutional reform. We suppose that there are two kinds of uncertainty; uncertainty of type 1 which arises from the imcomplete information about structural parmeter (tax reform), and uncertainty of type 2 which arises from the change of economic enviornment in the future (financial reform) . In the case of tax reform (resp. financial reform), “information” means the data about structural parameter (resp. the government's commitment to take complementary measures) .
When the uncertainty about effects of institutional reform is small, if many individuals' welfare can be potentially improved by it, the common consent is easilly given to the institutional reform, and thus information plays no role in executing it. On the contrary, when the uncertainty about effects of institutional reform is great and the individuals are more risk averse, even if social welfare can be potentially improved, there may be the possibility that the proposal for reforming the present system is refused by a member of a community, because expected payoff under new system may be smaller than payoff under status quo for many individuals (i.e. V^h (0) < u^h for many h) . Then, the government is required to provide the information to the individuals to reduce the uncertainty and execute the institutional reform. The value of information is positive under some conditions (i.e. V^h (g) > V^h (0) ), but the institutional reform is not always realized by the provision of in-formation, and the feasibility of it depends on the quality (credibility) of information. Since, in the case of drastic reform, the uncertainty about the effects of it is seemed to be great, the information about structural parameter plays the important role in execut-ing “design” tax reform, and additional regulations are needed to stabilize new financial system, which is formulated with complete abolition of old regulations.

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