This paper analyzes a relationship between the size of government
expenditure and political structure in the parliament. It considers a political
rent-seeking economy in which the size of government expenditure is
determined by the rent-seeking politicians and the lobbying groups of voters.
The pressure groups seek economic rents to influence the choice of the
politicians. According to the results of the model, the larger the political
concentration in the parliament or the more competitive the lobby-market for
political rents, the larger the equilibrium level of government expenditure.
The empirical results confirms that the political concentration in the local
parliament affects the size of local government expenditure.