The initiative and referendum were intended to curtail the power of organized interest groups, yet business groups account for more spending on ballot measures than any other group by far. Does this mean that direct democracy has become a tool for corporations to buy favorable legislation? This paper reports four types of evidence suggesting that the answer is no: (1) analysis of the content of the universe of state-level initiatives in the United States 1904-2021 shows that anti-business initiatives were more common than pro-business initiatives, both proposed and passed; (2) analysis of contribution patterns for California ballot measures 2000-2020 shows that business groups more often opposed than supported initiatives; (3) abnormal stock returns on election day show that corporate contributors earned positive abnormal returns when initiatives failed and negative abnormal returns when they passed; and (4) for all three types of evidence, business groups fared better with ballot measures proposed by legislatures. I also find similar results for unions.

This paper surveys the extensive literature that seeks to estimate the effect of the initiative and referendum on public policy. The evidence on the referendum uniformly finds that requiring voter approval for new spending (or new debt) results in lower spending (or lower debt). The initiative process is associated with lower spending and taxes in American states and Swiss cantons, but with higher spending in cities. The initiative is consistently associated with more conservative social policies. Policies are more likely to be congruent with majority opinion in states with the initiative process than states without the initiative, suggesting that direct democracy allows the majority to counteract the power of special interests in policy making.

This paper surveys the extensive literature that seeks to estimate the effect of the initiative and referendum on public policy. The evidence on the referendum uniformly finds that requiring voter approval for new spending (or new debt) results in lower spending (or lower debt). The initiative process is associated with lower spending and taxes in American states and Swiss cantons, but with higher spending in cities. The initiative is consistently associated with more conservative social policies. Policies are more likely to be congruent with majority opinion in states with the initiative process than states without the initiative, suggesting that direct democracy allows the majority to counteract the power of special interests in policy making.

 Many political practitioners believe that voters are more likely to approve propositions listed at the top than at the bottom of the ballot, potentially distorting democratic decision making, and this belief influences election laws across the United States. Numerous studies have investigated ballot order effects in candidate elections, but there is little evidence for direct democracy elections, and identification of causal effects is challenging. This paper offers two strategies for identifying the effect of ballot order in proposition elections, using data from California during 1958-2014 and Texas during 1986-2015. The evidence suggests that propositions are not advantaged by being listed at the top rather than the bottom of the ballot. Approval rates are lower with more propositions on the ballot.

 Voter initiatives are important for policy making in many countries. While much research shows that the initiative process affects policy choices, almost no evidence explains how the initiative process affects policy. Initiatives might change policy directly through voters approving laws that override the legislature; or the initiative process may change policy indirectly by permitting threats that induce the legislature to change policy. This paper develops an empirical strategy to measure the direct and indirect effects of the initiative based on the idea that direct effects can be inferred from states that actually pass initiatives while indirect effects can be inferred from states where the initiative is available but not used. Evidence from 50 states on nine separate issues suggests that both direct and indirect effects are important, but the direct effect is several times larger than the threat effect. 

 Most states require voter initiatives to embrace only a single subject, and courts have invalidated many initiatives for violating the single subject rule. Critics argue that the definition of a “subject” is infinitely malleable, so that if judges attempt to enforce the single-subject rule aggressively, their decisions will be based on their personal views rather than neutral principles. We investigate this argument by studying the decisions of state appellate court judges in five states during the period 1997–2006. We find that judges are more likely to vote to uphold an initiative against a single subject challenge if their partisan affiliations suggest they would be sympathetic to the policy proposed by the initiative. More important, we find that partisan affiliation is highly consequential in states with aggressive enforcement of the single subject rule — the rate of voting to uphold an initiative jumps from 41 percent when a judge agrees with the policy to 83 percent when he disagrees — but not very consequential in states with restrained enforcement. The evidence suggests that it may be possible to apply the single subject rule in a neutral way when the judiciary is restrained, but with aggressive enforcement decisions are likely to driven by the political preferences of judges.

 The quality of government is often measured by the degree of congruence between policy choices and public opinion, but there is not an accepted method for calcu-lating congruence. This paper offers a new approach to measuring policy-opinion congruence, and uses it to study 10 high-profile issues across the 50 states. For the issues examined, states chose the policy preferred by a majority of citizens (equivalent to the median voter outcome) 59 percent of the time — only 9 percent more than would have happened with random policymaking. Majoritarian/median outcomes were 18–19 percent more likely when direct democracy was available, and 11–13 percent more likely when judges were required to stand for reelec-tion. The likelihood of a majoritarian/median outcome was not correlated with a variety of election laws, including campaign contribution limits, public funding of campaigns, and commission-based redistricting.

 Contrary to the claims of many pundits, voter initiatives have not constrained the Califor-nia budget to the extent that fiscal crises are inevitable. I reach this conclusion by examining each of the 111 successful initiatives in the state’s history. For the 2009-2010 budget cycle, voter initiatives locked in about 33 percent of spending, most of which probably would have been appropriated even if not required, and placed no significant prohibitions on the two primary sources of state revenue—income and sales taxes.

 In the public sector, employment may be inefficiently high because of patronage, and wages may be inefficiently high because of public employee interest groups. This paper explores whether the initiative process, a direct democracy institution of growing importance, ameliorates these political economy problems. In a sample of 650+ cities, I find that when public employees cannot bargain collectively and patronage may be a problem, initiatives appear to cut employment but not wages. When public employees bargain collectively, driving up wages, the initiative appears to cut wages but not employment. The employment-cutting result is robust; the wage-cutting result survives some but not all robustness tests. 

 This paper examines the impact of direct democracy on the executive branch. Direct democracy is a mixed blessing for the executive in theory: it weakens the legislature by cutting it out of the lawmaking process, but also allows new laws to avoid the governor’s veto. Empirically, the constitutional initiative is associated with several changes in the organization of the executive branch, including term limits and lower salaries. By taking away the government’s ability to set policy on some issues, the initiative permits citizens to target their votes more narrowly when the governor stands for re-election, providing stronger incentives for good performance. Some evidence from gubernatorial elections over 1950-1988 suggests that voter sanctions are stronger when the initiative is available.

 This essay explores the role of initiatives, the most potent form of direct democracy, in promoting electoral reform in the American states. More than 300 citizen-initiated state-level ballot propositions pertaining to campaigns, elections, voting, and representation have gone before the voters in the last 100 years. The most popular subjects have been term lengths, campaign finance, and redistricting. Despite heavy initiative use, direct democracy states do not appear to have significantly different electoral laws than other states, all else equal, with the notable exception of term limits, which are much more common in initiative states.

 This paper uses fundamental principles of public choice, mainly the median voter theorem, to develop a simple theory of redistricting. The focus is on how closely policy outcomes correspond to majority rule. The main results are: (1) Potential policy bias in favor of nonmajority groups is structurally linked to the number of legislative seats and the population, and the structure of most states puts them very close to the theoretically maximum bias. (2) Random districting, which might seem like the essence of neutrality, does not eliminate policy bias on average. (3) Traditional principles of compact, contiguous districts that respect existing political boundaries, stressed in the Supreme Court’s Shaw v. Reno decision, minimize the chance of nonmajoritarian outcomes. Our analysis also offers a gerrymandering explanation for the positive relation between seats and spending that is usually taken as support for the “Law of 1/n.”

 Demographic, political, and technological trends are fueling an unprecedented growth in direct democracy worldwide. If the trends continue, direct democracy threatens to eclipse legislatures in setting the policy agenda. This article reviews existing scientific knowledge about the initiative and referendum – the main institutions of direct democracy – and highlights key issues for the future.

 Does direct democracy make it impossible to balance the government budget? I address this question with evidence from California, where it is widely believed that voter initiatives have paralyzed the state budget process by locking in high spending while at the same time prohibiting tax increases. A review of all initiatives approved since 1912 shows that no more than 32 percent of appropriations in the 2003-04 budget were locked in by initiatives, and initiatives placed only minimal constraints on the legislature’s ability to raise revenue. Moreover, it seems likely that the legislature would have allocated much of the money to its dedicated purpose even if not required to do so by initiative. Initiatives do not appear to be a significant obstacle to balancing the state budget in California.

 This article surveys research on direct democracy, concluding that direct democracy is a more effective governance practice than sometimes believed.

 This article surveys the literature on direct democracy, with an emphasis on how recent research has changed the field’s understanding of some longstanding questions.

 Despite its widespread appeal and long history in American government, the initiative process remains controversial.  One of the most recurrent criticisms is that the initiative allows well organized and well financed special interests to subvert the policy process.  This Article reports some scientific evidence on the subversion hypothesis.  For the period 1987–2000, the evidence shows that the initiative changed the course of state and local fiscal policy, but that the changes were consistent with the wishes of the majority.  None of the evidence supports the subversion hypothesis.

 In many Swiss cantons, new government programs must be approved by a referendum of citizens before money can be spent. Referendums seem like a natural way to address citizen –legislator agency problems, yet statistical evidence on how referendums affect spending decisions is almost nonexistent. We estimate regressions for Swiss cantons using panel data from 1980 to 1998 and find that mandatory referendums reduced government spending by 19% for the median canton after controlling for demographics and other determinants of spending.

 This chapter describes legal provisions for the initiative and referendum in American cities.

 This note identifies problems with a methodology that has been used to test whether policy is more or less responsive to public opinion in states with voter initiatives. The methodology is to regress a policy variable on a measure of constituent preferences, and compare the coefficients for states with and without voter initiatives. The states with the largest coefficients are said to be more responsive to public opinion. Such an inference is shown to be invalid.

 This paper explores the benefits and costs of the voter initiative, a direct democracy device that allows policy decisions to be made by voters rather than their elected representatives. Previous research suggests that by introducing “competition” into the proposal process, the initiative leads to policies that are closer to the median voter’s ideal point. In our model, in contrast, the effect of the initiative is conditional on the severity of representative agency problems and uncertainty about voter preferences. The initiative always makes the voter better off when representatives are faithful agents, but when voter preferences are uncertain, initiatives can cause “shirking” representatives to choose policies farther from the voter’s ideal point. Our evidence shows that initiatives are more common in states with heterogeneous populations, and initiatives reduce state spending when Democrats control the government and when citizens have diverse preferences. 

 This paper tests whether state and local fiscal policy depended on the number of seats in the legislature in the first half of the 20th century. We find that large legislatures spent more, as implied by the “Law of 1/n” from the fiscal commons/logrolling literature. The same relation appears in the latter half of the century, and therefore seems to be systematic. We also find—again consistent with postwar evidence—that only the size of the upper house was important. We are unable to find robust evidence that expenditure depended on the partisan makeup of the legislature.

 This paper compares the fiscal policy of initiative and noninitiative states in the first half of the twentieth century. States with initiatives had higher combined state and local expenditure after controlling for income and other demographics but a lower ratio of state to local expenditure. This, together with existing evidence from later in the century, suggests that the voter initiative does not have a consistent effect on the overall size of state and local government. However, it does systematically lead to more decentralized expenditure.

 This paper evaluates the ability of common explanatory variables to predict who votes. Logit voting regressions are estimated with more than three dozen explanatory variables using survey and aggregate data for the 1979, 1980, 1984, and 1988 Canadian national elections. We find that the usual demographic variables such as age and education, and contextual variables such as campaign spending have significant effects on the probability of voting, but the models have low R2’s and cannot predict who votes more accurately than random guessing. We also estimate regressions using past voting behavior as a predictor of current behavior, and find that although the explanatory power rises it remains low. This suggests that the difficulty in explaining turnout arises primarily from omitted time-varying variables. In some sense, then, it appears that whether or not a person votes is to a large degree random. The evidence provides support for the rational voter theory, and is problematic for psycho/sociological approaches.

 Partisan bias occurs when the translation of the popular vote into legislative seats differs between competing parties. This paper contains a theoretical and empirical analysis of the consequences of an efficient gerrymander for the partisan bias of an electoral system. Under partisan apportionment, bias is shown to depend on some structural features of the electoral environment; namely, the size of the voting population and the number of single-member districts within a political jurisdiction. A statistical analysis reveals the predicted relationships in data on Congressional elections across states in the 1950–1984 period. This paper highlights the importance of some measurable features of the electoral environment for determining bias and provides an indirect test of partisan gerrymandering in congressional apportionment processes.

 This article studies voting behavior on 16 environmental ballot propositions in California in order to characterize the demand for environmental goods. The environment is found to be a normal good for people with mean incomes, but some environmental goods are inferior for those with high incomes, at least when supplied collectively. An important ‘‘price’’ of environmental goods is reduced income in the construction, farming, forestry, and manufacturing industries. Income and price can explain most of the variation in voting; there is little need to introduce ‘‘preference’’ variables such as political ideology.

 In 23 American states, citizens can initiate and approve laws by popular vote while in the other 27 states laws can only be proposed by elected representatives. This paper compares the fiscal behavior of state and local governments over the last 30 years under these two institutional arrangements. The main finding is that spending is significantly lower, on the order of 4 percent, in states with voter initiatives than in pure representative states. It is also found that local spending is higher and state spending is lower in initiative states. On the revenue side, initiative states rely less on broad-based taxes and more on charges tied to services. Taken together, the evidence indicates that the initiative leads to a reduction in the overall size of the government sector and suggests it leads to a reduction in the level of  redistributional activity.

 This paper investigates the determinants of state spending over 1960-1990. Recent empirical studies suggest that state government expenditure is greater than the electorate desires. Our main finding is that expenditure was positively related to the number of seats in a state’s legislature. This is consistent with the hypothesis that logrolling leads representatives to spend more than their constituents would like. We also find that political parties do not have a pronounced effect on overall levels of expenditure, but do influence the composition of spending. In particular, Democratic control of state government is associated with higher levels of welfare spending.

 Voting research is rich in empirical  regularities yet a parsimonious theory of voter turnout that can match the facts has proven to be elusive. This paper argues that voter turnout patterns can be explained by extending the traditional rational voter model to include limited information. A model is presented in which utility-maximizing consumers receive higher payoffs from voting the more confident they are of their vote choice. The model provides an explanation for the most important cross-sectional voter turnout patterns. In addition, it suggests a novel explanation for the post-1960 decline in U.S. participation.

 This paper presents evidence that voter participation does not depend on the probability that one vote is decisive. An extensive summary of the empirical participation literature is provided which shows that most but not all studies have found that turnout in an electoral district is higher when the race is closer. Individual-level vote regressions for the 1979 and 1980 Canadian national elections are estimated using objective measures of closeness (as opposed to self-reported measures). The main finding is that a citizen is no more likely to vote in a close election than in a landslide election. District-level turnout regressions for the same elections are also estimated, and a significant relation between closeness and turnout is observed. This suggests that aggregation bias may generate a spurious closeness-turnout relation in district-level regressions.

This paper uses a new data set of 885 California ballot propositions from 1912 though 1990 to test the hypothesis that voter turnout increases as an election becomes closer. Various measures of voter participation are regressed on various measures of election closeness. The main finding is that there is not a systematic relation between closeness and turnout. Two conclusions are drawn: (1) voters are not sensitive to the probability their votes are decisive, and (2) other studies which found higher turnout for close elections probably detected an increased  mobilization of party elites in tight races.

 This paper develops a theory of direct legislation to explain (i)why some issues are resolved by popular vote and others by elected representatives, and (ii) why citizens vote on some ballot propositions and abstain on others. Evidence is provided by a new data set describing 871 California propositions. The main findings are the following. “Good government” issues were usually resolved by legislative measures and distributional issues by initiatives. Citizen-initiated legislation was more common when representatives were unresponsive to the electorate. Voter turnout was higher on distributional propositions than good government propositions. Voter participation on ballot measures has been increasing over time.