These rules are made for spending: testing and extending the law of 1/n

Bel, Germà, Raudla, Ringa, Rodrigues, Miguel and Tavares, António, (2018). These rules are made for spending: testing and extending the law of 1/n. Public Choice, 174(1-2), 41-60

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  • Sub-type Journal article
    Author Bel, Germà
    Raudla, Ringa
    Rodrigues, Miguel
    Tavares, António
    Title These rules are made for spending: testing and extending the law of 1/n
    Appearing in Public Choice
    Volume 174
    Issue No. 1-2
    Publication Date 2018-01
    Place of Publication Cham
    Publisher Springer
    Start page 41
    End page 60
    Language eng
    Abstract What is the influence of the rules of political representation on local spending? This research tests the law of 1/n in the Portuguese local context and finds that the law fails to apply. We suggest an alternative measure—the density of representation—to assess the impact of the rules of city council representation on local public expenditures. Density of representation is defined as the number of elected officials in the city council divided by city population. We find an S-shaped relationship between the density of representation and the level of local government expenditures. The level of municipal spending initially declines with increases in the density of representation, reflecting an increase in the ability of constituents to monitor their elected representatives. At higher levels of representation density, the relationship becomes positive, suggesting that the dynamics of the budgetary commons become salient. The relationship becomes negative again for extremely high density of representation owing to increases in the transaction costs of legislative decision-making. This paper discusses the implications of our findings for the reform of local government institutions and the rules of political representation.
    Keyword law of 1/n
    density of representation
    local expenditures
    city council
    JEL H72
    Copyright Holder Springer
    Copyright Year 2018
    Copyright type All rights reserved
    ISSN 15737101
    DOI 10.1007/s11127-017-0488-y
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    Created: Mon, 09 Sep 2019, 22:44:39 JST by Mario Peixoto on behalf of UNU EGOV