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

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.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 n.º 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-Rinfo:eu-repo/semantics/publishedVersio