Derivation of the density functional theory from the cluster expansion

The density functional theory is derived from a cluster expansion by truncating the higher-order correlations in one and only one term in the kinetic energy. The formulation allows self-consistent calculation of the exchange correlation effect without imposing additional assumptions to generalize the local density approximation. The pair correlation is described as a two-body collision of bound-state electrons, and modifies the electron- electron interaction energy as well as the kinetic energy. The theory admits excited states, and has no self-interaction energy.