Whenever a normative statement was made in Chapters 5 to 12, it was based on the efficiency criteria of welfare economics. This left open the issue of whether a Pareto-optimal design of a health care system might ever be achieved. Therefore, this chapter raises the question of what determines the actual (rather than any desired) institutional structure of a health care system. This type of question is the topic of ‘Political Economy’, also known as ‘Public Choice’. This is a comparatively recent field of theoretical and empirical research into behavior in the political domain.1 With regard to health policy and regulation, the following agents can be distinguished.