In this paper we study the relationship between legislature size and constituency size with respect to general government and welfare spending. According to the theory, legislature size has an indefinite effect on government spending because logrolling and transaction costs have canceling effects. In turn, smaller constituency size is predicted to decrease givernment spending because of homogeneity of interests and low monitoring costs. We use a panel of 23 OECD countries over the period 1975-1996 controlling for some institutional features that differ among these countries. We find that legislature size outperforms constituency size in explaining government spending. Consequences for lobbies' behavior are drawn.
Trading Interests: Legislature Size, Constituency Size and Government Spending in a Panel of Countries
Ricciuti, Roberto
2004-01-01
Abstract
In this paper we study the relationship between legislature size and constituency size with respect to general government and welfare spending. According to the theory, legislature size has an indefinite effect on government spending because logrolling and transaction costs have canceling effects. In turn, smaller constituency size is predicted to decrease givernment spending because of homogeneity of interests and low monitoring costs. We use a panel of 23 OECD countries over the period 1975-1996 controlling for some institutional features that differ among these countries. We find that legislature size outperforms constituency size in explaining government spending. Consequences for lobbies' behavior are drawn.
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