Political competition, electoral participation and public finance in 20th century Latin America

Article history: Received 21 June 2009 Received in revised form 6 April 2010 Accepted 27 June 2010 Available online 29 July 2010 Rational choice models predict that political competition and political participation have opposite effects on the size of government. We investigate these theories using data from a panel of 18 Latin American countries during the 20th century. Our research builds evidence for the prediction that reforms enhancing political competition tend to limit the size of government, while reforms increasing political participation tend to increase the size of government. Furthermore, we find that reforms which remove literacy requirements from franchise laws are associated with governmental expansion, while changes in women's suffrage laws have no impact on the size of government. Our findings demonstrate the empirical relevance of the distinction between political competition and participation. © 2010 Elsevier B.V. All rights reserved. JEL classification: D7 H11