Legislatures and government spending: evidence from democratic countries.

In this paper we study the relationship between legislature size with respect to general government and welfare spending. According to the theory, legislature size has an indefinite effect on government spending because logrolling and transaction costs have canceling effects. Bicameralism is expected to have a negative effect because of the increased transaction cost of finding a viable majority in two houses with different constituencies. We use a cross-section of 75 countries over the period 1990-1998 controlling for some institutional features that differ among countries. We find that both legislature size and bicameralism do not have a significant effect on the two types of spending.