Does the size of the legislature affect the size of government? Evidence from two natural experiments

This paper makes use of regression discontinuity designs to estimate the effect of the number of legislators on the size of government. The results indicate a negative effect, i.e., the larger the size of the legislature the smaller is the size of government. This runs counter to conventional wisdom. One potential explanation is that more legislators can better control a budget maximizing bureaucracy. I present evidence that is consistent with the proposed mechanism.

► Does legislature size affect government size?
► We use two regression-discontinuity approaches from Finland and Sweden.
► The empirical results suggest a negative relationship.
► This may be due to an agency problem between legislators and the bureaucracy.