Public Choice

, Volume 174, Issue 1–2, pp 41–60 | Cite as

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

  • Germà Bel
  • Ringa Raudla
  • Miguel Rodrigues
  • António F. TavaresEmail author


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.


Law of 1/n Density of representation Local expenditures City council 

JEL Classification

H72 H19 



The authors would like to thank Richard Feiock and Tjerk Budding for the comments and suggestions. This research received funding from the project “SmartEGOV: Harnessing EGOV for Smart Governance (Foundations, methods, Tools)/NORTE-01-0145-FEDER-000037”, supported by Norte Portugal Regional Operational Programme (NORTE 2020), under the PORTUGAL 2020 Partnership Agreement, through the European Regional Development Fund (EFDR), from the Portuguese Science and Technology Foundation (Fundação para a Ciência e Tecnologia) [Grant No. PEst-OE/CJP/UI0758/2014], and from the Estonian Research Council Grant PUT-1142. Germà Bel thanks support by the Spanish Government under Project ECO2016-76866-R.

Supplementary material

11127_2017_488_MOESM1_ESM.doc (186 kb)
Supplementary material 1 (DOC 186 kb)


  1. Aidt, T. S., & Shvets, J. (2012). Distributive politics and electoral incentives: evidence from seven US state legislatures. American Economic Journal: Economic Policy, 4(3), 1–29.Google Scholar
  2. Azfar, O. (2001). The logic of collective action. In W. F. Shughart II & L. Razzolini (Eds.), The elgar companion to public choice (pp. 59–82). Cheltenham: Edward Elgar.Google Scholar
  3. Baqir, R. (2002). Districting and government overspending. Journal of Political Economy, 110(6), 1318–1354.CrossRefGoogle Scholar
  4. Bradbury, J. C., & Crain, W. M. (2001). Legislative organization and government spending: Cross-country evidence. Journal of Public Economics, 82, 309–325.CrossRefGoogle Scholar
  5. Bradbury, J. C., & Stephenson, E. (2003). Local government structure and public expenditures. Public Choice, 115, 185–198.CrossRefGoogle Scholar
  6. Buchanan, J. M., & Tullock, G. (1962). The calculus of consent. Ann Arbor, MI: University of Michigan Press.CrossRefGoogle Scholar
  7. Buchanan, J. M., & Yoon, Y. J. (2002). Universalism through common access: An alternative model of distributive majoritarian politics. Political Research Quarterly, 55(3), 503–519.CrossRefGoogle Scholar
  8. Bulut, Y., & Taniyici, S. (2006). Representativeness and attitudes of municipal council members in Turkey: The case of Erzincan Province. Local Government Studies, 32(4), 413–428.CrossRefGoogle Scholar
  9. Clingermayer, J. C., & Feiock, R. C. (2001). Institutional constraints and policy choice: An exploration of local governance. Albany, NY: SUNY Press.Google Scholar
  10. Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 3(1), 1–44.CrossRefGoogle Scholar
  11. Cox, G. W. (1990). Multicandidate spatial competition. In J. Enelow & M. Hinich (Eds.), Advances in the spatial theory of voting. New York: Cambridge University Press.Google Scholar
  12. Crain, W. M. (1999). Districts, diversity, and fiscal biases: evidence from the American states. The Journal of Law and Economics, 42(2), 675–698.CrossRefGoogle Scholar
  13. Crowley, G. R. (2015). Local intergovernmental competition and the law of 1/n. Southern Economic Journal, 81(3), 742–768.CrossRefGoogle Scholar
  14. Dixit, A., Grossman, G., & Helpman, E. (1997). Common agency and coordination: general theory and application to government policy making. Journal of Political Economy, 105, 752–769.CrossRefGoogle Scholar
  15. Drew, J., & Dollery, B. (2016). The price of democracy? Political representation structure and per capita expenditure in Victorian local government. Urban Affairs Review, Early View. Scholar
  16. Egger, P., & Koethenbuerger, M. (2010). Government spending and legislative organization: quasi-experimental evidence from Germany. American Economic Journal: Applied Economics, 2(4), 200–212.Google Scholar
  17. Farnham, P. G. (1990). The Impact of Citizen Influence on Local Government Expenditure. Public Choice, 64(3), 201–212.CrossRefGoogle Scholar
  18. Feiock, R., MacDonald, L. & Ihlanfeldt, K. (2009). Housing values and the density of political representation at the local level, Florida State University (unpublished paper).Google Scholar
  19. Ferejohn, J. (1986). Incumbent performance and electoral control. Public Choice, 50(1), 5–25.CrossRefGoogle Scholar
  20. Figueiredo, D., & Rui, J. P., Jr. (2003). Budget institutions and political insulation: why states adopt the item veto. Journal of Public Economics, 87(12), 2677–2701.CrossRefGoogle Scholar
  21. Fiorino, N., & Ricciuti, R. (2007). Legislature size and government spending in Italian regions: Forecasting the effects of a reform. Public Choice, 131(1–2), 117–125.CrossRefGoogle Scholar
  22. Gabrini, C. J. (2010). Do Institutions Matter? The Influence of Institutions of Direct Democracy on Local Government Spending. State and Local Government Review, 42(3), 210–225.CrossRefGoogle Scholar
  23. Gilligan, T. W., & Matsusaka, J. G. (1995). Deviations from constituent interests: The role of legislative structure and political parties in the states. Economic Inquiry, 33, 383–401.CrossRefGoogle Scholar
  24. Gilligan, T. W., & Matsusaka, J. G. (2001). Fiscal policy, legislature size, and political parties: Evidence from state and local governments in the first half of the 20th century. National Tax Journal, 54(1), 57–82.CrossRefGoogle Scholar
  25. Hajnal, Z. L., & Trounstine, J. (2010). Who or What governs? The effects of economics, politics, institutions, and needs on local spending. American Politics Research, 38(6), 1130–1163.CrossRefGoogle Scholar
  26. Halse, A. H. (2016). More for everyone: the effect of local interests on spending on infrastructure. European Journal of Political Economy, 43, 41–56.CrossRefGoogle Scholar
  27. Hendrick, R. M., Jimenez, B. S., & Lal, K. (2011). Does local government fragmentation reduce local spending? Urban Affairs Review, 47(4), 467–510.CrossRefGoogle Scholar
  28. Horn, M. J. (1995). The political economy of public administration: institutional choice in the public sector. Cambridge, MA: Cambridge University Press.CrossRefGoogle Scholar
  29. Keefer, P., & Knack, S. (2007). Boondoggles, rent-seeking, and political checks and balances: public investment under unaccountable governments. The Review of Economics and Statistics, 89(3), 566–572.CrossRefGoogle Scholar
  30. Langbein, L. I., Crewson, P., & Brasher, C. N. (1996). Rethinking ward and at-large elections in cities: Total spending, the number of locations of selected city services, and policy types. Public Choice, 88, 275–293.CrossRefGoogle Scholar
  31. Lee, D. (2015). Supermajority rule and the law of 1/n. Public Choice, 164(3–4), 251–274.CrossRefGoogle Scholar
  32. Lindberg, S. I. (2013). Mapping accountability: core concept and subtypes. International Review of Administrative Sciences, 79(2), 202–226.CrossRefGoogle Scholar
  33. MacDonald, L. (2008). The impact of government structure on local public expenditures. Public Choice, 136, 457–473.CrossRefGoogle Scholar
  34. Miller, G. J. (2005). The political evolution of principal-agent models. Annual Review of Political Science, 8, 203–225.CrossRefGoogle Scholar
  35. Moe, T. M. (1984). The new economics of organization. American Journal of Political Science, 28, 739–777.CrossRefGoogle Scholar
  36. Mohtadi, H., & Roe, T. L. (2003). Democracy, rent seeking, public spending and growth. Journal of Public Economics, 87(3), 445–466.CrossRefGoogle Scholar
  37. Morgan, D. R., & Kickham, K. (1999). Changing the form of county government: Effects on revenue and expenditure policy. Public Administration Review, 59(4), 315–324.CrossRefGoogle Scholar
  38. Mukherjee, B. (2003). Political parties and the size of government in multiparty legislatures. Comparative Political Studies, 36(6), 699–728.CrossRefGoogle Scholar
  39. Oliver, J. E. (1999). The effects of metropolitan economic segregation on local civic involvement. American Journal of Political Science, 43(1), 186–212.CrossRefGoogle Scholar
  40. Oliver, J. E. (2001). Democracy in Suburbia. Princeton, NJ: Princeton University Press.Google Scholar
  41. Olson, M. (1965). The logic of collective action: public goods and the theory of groups. Cambridge: Harvard University Press.Google Scholar
  42. Ostrom, E. (1990). Governing the commons. Cambridge, MA: Cambridge University Press.CrossRefGoogle Scholar
  43. Ostrom, E. (2000). The danger of self-evident truths, PS: Political Science and Politics, 33(1), 33–44.Google Scholar
  44. Ostrom, E. (2005). Understanding institutional diversity. Princeton, NJ: Princeton University Press.Google Scholar
  45. Park, J., McCabe, B. C., & Feiock, R. C. (2010). Direct democracy provisions and local government fiscal choices. The American Review of Public Administration, 40(4), 400–410.CrossRefGoogle Scholar
  46. Perotti, R., & Kontopoulos, Y. (2002). Fragmented fiscal policy. Journal of Public Economics, 86(2), 191–222.CrossRefGoogle Scholar
  47. Pettersson-Lidbom, P. (2012). Does the size of the legislature affect the size of government? Evidence from two natural experiments. Journal of Public Economics, 96(3), 269–278.CrossRefGoogle Scholar
  48. Primo, D. M. (2006). Stop us before we spend again: institutional constraints on government spending. Economics and Politics, 18(3), 269–312.CrossRefGoogle Scholar
  49. Primo, D. M., & Snyder, J. (2008). Distributive politics and the law of 1/n. Journal of Politics, 70(2), 477–486.CrossRefGoogle Scholar
  50. Raudla, R. (2010). Governing budgetary commons: what can we learn from Elinor Ostrom? European Journal of Law and Economics, 30, 201–221.CrossRefGoogle Scholar
  51. Raudla, R. (2015). The effects of electoral rules on public finances: Taking stock. In H. Peukert (Ed.), Taking up the challenge. Marburg: Metropolis.Google Scholar
  52. Ricciuti, R. (2003). Trading interests: Legislature size, constituency size and government spending in a panel of countries. Rivista di Politica Economica. 93(1), 315–335.Google Scholar
  53. Ricciuti, R. (2004). Political fragmentation and fiscal outcomes. Public Choice, 118(3–4), 365–388.CrossRefGoogle Scholar
  54. Sass, T. R. (1991). The choice of municipal government structure and public expenditures. Public Choice, 71(1), 71–87.CrossRefGoogle Scholar
  55. Shughart, W. F., & Tollison, R. D. (1986). The political economy of legislation and the growth of government. Research in Law and Economics, 9, 111–127.Google Scholar
  56. Thornton, M., & Ulrich, M. (1999). “Constituency size and government spending. Public Finance Review, 27(6), 588–599.CrossRefGoogle Scholar
  57. Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.CrossRefGoogle Scholar
  58. Tullock, G. (1959). Some problems of majority voting. Journal of Political Economy, 67(6), 571–579.CrossRefGoogle Scholar
  59. Tullock, G. (1967). The welfare costs of tariffs, monopolies, and theft. Western Economic Journal, 5, 224–232.Google Scholar
  60. von Hagen, J. (2003). Budgeting institutions and public spending. In A. Shah (Ed.), Ensuring accountability when there is no bottom line. Handbook on public sector performance reviews (Vol. 1, pp. 36–73). Washington, DC: The World Bank.Google Scholar
  61. Weingast, B. R., Shepsle, K. A., & Johnsen, C. (1981). The political economy of benefits and costs: a neoclassical approach to distributive politics. The Journal of Political Economy, 89(4), 642–664.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2017

Authors and Affiliations

  1. 1.Departament de Política EconòmicaUniversitat de BarcelonaBarcelonaSpain
  2. 2.Ragnar Nurkse School of Innovation and GovernanceTallinn University of TechnologyTallinnEstonia
  3. 3.Research Center in Political Science, School of Economics and ManagementUniversity of Minho (Campus de Gualtar)BragaPortugal

Personalised recommendations