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

Schneider, Rodrigo and Veras, Henrique (2023) Do bigger legislatures lead to bigger government? Evidence from a Brazilian municipal council reform. Economía LACEA Journal, 22 (1). 117 - 134. ISSN 1533-6239

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Identification Number: 10.31389/eco.417

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.

Item Type: Article
Official URL: https://economia.lse.ac.uk/
Additional Information: © 2023 The Authors
Divisions: LSE
Subjects: J Political Science > JL Political institutions (America except United States)
H Social Sciences > HJ Public Finance
J Political Science > JS Local government Municipal government
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H72 - State and Local Budget and Expenditures
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R51 - Finance in Urban and Rural Economies
Date Deposited: 10 Oct 2023 12:51
Last Modified: 16 Jun 2024 17:30
URI: http://eprints.lse.ac.uk/id/eprint/120411

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