Legislature Size does Matter for Public Spending: Causal Evidence and Mechanisms at Work

Abel François, Touria Jaaidane and Sophie Larribeau ()

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Abstract: The impact of the legislature size on public spending is still discussed and empirical results are mixed. To tackle the endogeneity issue and properly address the question, we take advantage of two exogenous variations in the French municipal council to infer causality instead of simple correlation. First, for the smallest cities, the council size has dropped from 9 to 7 in 2014, forming a natural experiment which can be analyzed using a difference-in-difference strategy. Second, we rely on the law establishing that council size is a deterministic step function of municipal population size. We exploit the induced discontinuity around population thresholds. Then we show that the council size is clearly a positive causal factor of municipal public spending. Investigating several potential mechanisms explaining the causal link, we find that the relationship is driven by both electoral and political issues, and is not channeled by a lower control over either councilors by voters or bureaus by councilors.

Keywords: Legislature; size; -Public; Spending; -Municipality; -Local; government (search for similar items in EconPapers)
Date: 2025-04-04
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