The paper investigates the relationship between polity size and a central aspect of democracy: Political trust. Two schools of thought (Ostrom, 1972) offer competing expectations for this relationship: The reform theory posits a positive relationship while the political economy theory posits a negative relationship. This disagreement is in this paper resolved empirically using recent municipal merger reform in Denmark as a case. The paper addresses the question: How does changing the size of local government affect political trust? This is assessed from the citizens’ point of view using self-reported citizen evaluations of the political community in their municipality. The empirical analysis treats the merger reform as a natural experiment and utilizes a difference-in-difference research design. The data consists of a repeated survey of 900 respondents conducted in 2001 and again in 2009. The analysis finds that political trust is negatively affected when municipal size changes but only under certain conditions: When respondents live in merged municipalities who were relatively small to begin with, and who only constituted a relatively small part of the merged municipality. This validates the expectation from the political economy theory that political trust tends to be lower in smaller municipalities and higher in larger ones.