Legislature and Constituency Size in Italian Regions: Forecasting the Effects of a Reform

In this paper we analyze the effect of different legislature and constituency size on per capita regional expenditure in Italy. According to the theory, legislature size has an indefinite effect on government spending because logrolling and transaction costs may have canceling effects. In turn, smaller constituency size is predicted to decrease government spending, because of homogeneity of interests and low monitoring costs. We find a large and significantly positive effect of the number of legislators and a negative effect for constituency size. We use these findings to forecast the effects of the increase in the number of legislators that are occurring in some regions