Legislature Size and Welfare: Evidence from Brazil

Abstract

How does legislature size impact public service provision? Despite the importance of institutional design for democratic governance, the effect of legislative features on citizen welfare remains little understood. In this paper, we use a formal model to show that increasing legislature size improves public goods delivery. We argue that changes in bargaining costs depend on whether additional legislators share the executive's party affiliation: More opposition members reduce the equilibrium public goods provision, while more government-aligned members increase it. We test this theory by exploiting sharp discontinuities in city council size in Brazil. We show that an additional city councilor has a 91% chance of belonging to the mayoral coalition, and this significantly improves primary school enrollment and infant mortality rates. To explore possible mechanisms, we surveyed 174 former city councilors and analyzed 346,553 bills proposed between 2005 and 2008. This paper has implications for the design of representative institutions.