Abstract
This paper addresses the question of whether the size of the legislature matters for the size of government. Previous empirical studies have found a positive relationship between the number of legislators and the size of government but it is questionable whether they have identified a causal relationship. In contrast, this paper uses variation in council size induced by statutory council size laws to estimate the causal effect of legislature size on government size. These laws create discontinuities in council size at certain known thresholds of an underlying continuous variable, which make it possible to generate near experimental causal mestimates of the effect of council size on government size. In contrast to previous findings, I find a negative relationship between council size and government size. The estimated elasticity is about -0.12 for Finland and -0.45 for Sweden.
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