The Parkinson's Law states:
work expands to fill the time availableThis is for managers a good reason to give less time to workers to achieve the company's goals. In my opinion (and fortunately not only in my opinion) this rule can be very counter-productive.
This rule applies only if you really overestimate a project and therefore give a far too big budget to the project. Then people might think that they want to get also something from the money you have too much to give away. And further - usually projects are underestimated in the required time/people/money budget and not overestimated.
In all other cases reducing the time/people/money budget for something simply means reducing the output quality accordingly!
On the other hand if you give slightly more budget than necessary then people could improve quality and/or service for (additional) benefit for the customer. Further - remaining time is a possibility to review and learn additional lessons.
The only remaining argument for the Parkinson's Law is people's procrastination tendency. But I do think that simply reducing the available budget is not a solution for the procrastination problem.
Related post: Urging to forge at full speed, Productivity limits, Minimum effort.