All Good Things Go Together? The Policy Effects of Direct Democracy

Contrary to the views of many pundits, referendums have exhibited more positive in countries where the citizens themselves can initiate votes and in nations where constitutional amendments must be approved by the voters. It appears empirically that provisions for referendums are correlated with lower levels of inequality, better health care and lower budget deficits in these countries. The paper argues that the referendum is a catalyst rather than a direct cause cause of policy improvements. It is not the mere provision for referendums that engenders more equality better healthcare, and smaller budget deficits. Rather the presence of this institution seems to prompt elected politicians to introduce measures that are in the best interests of the majority. Using aggregate statistics as well as case-study examples, the paper analyses the direct and indirect effects of referendums and initiatives in both frequent user jurisdictions (Switzerland and US States) as well as the effects of direct democracy on public policy outcomes in polities with fewer referendums in Europe.