Tw. Gilligan et Jg. Matsusaka, Fiscal policy legislature size, and political parties: Evidence from stateand local governments in the first half of the 20th century, NAT TAX J, 54(1), 2001, pp. 57-82
This paper tests whether state and local fiscal policy depended on the numb
er of seats in the legislature in the first half of the 20th century. We fi
nd that large legislatures spent more, as implied by the "Law of 1/n" from
the fiscal commons/logrolling literature. The same relation appears in the
latter half of the century, and therefore seems to be systematic. We also f
ind-again consistent with postwar evidence-that only the size of the upper
house was important. We are unable to find robust evidence that expenditure
depended on the partisan makeup of the legislature.