Do bigger legislatures lead to bigger government? Evidence from a Brazilian municipal council reform

Rodrigo Schneider and Henrique Veras

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Do bigger legislatures lead to bigger government? We exploit a Brazilian reform that allocated the number of municipal council seats based on population thresholds in a regression discontinuity design. We find that larger councils have significantly higher public expenditures on social goods and legislative costs. Increased spending is partly financed by significantly higher local tax revenues and is driven by a less salient form of tax to voters – on services – than property taxes. As a potential explanation for our findings, we show that, more council seats led to greater political diversity.

Keywords: legislature size; municipal councils; local taxes; government expenditure; regression discontinuity; Brazil (search for similar items in EconPapers)
JEL-codes: D72 H72 R51 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2023-09-29
New Economics Papers: this item is included in nep-pol and nep-ure
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Published in Economía LACEA Journal, 29, September, 2023, 22(1), pp. 117 - 134. ISSN: 1533-6239

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:120411

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