Social Choice, Crypto-Initiatives and Policy Making by Direct Democracy

Abstract

The initiative process was created originally to enable citizens to enact public policy directly and in so doing to overturn the dominion of interest groups and of state and local party machines. In recent years, initiatives have been thought to serve as a check on legislative authority and to provide the people with a means to pressure the legislature into adopting more public regarding policies. Indeed, the general consensus emerging from the most recent academic research is that, at their worst, initiatives are benign, while at their best, they serve to further the interests of electoral majorities.

A few scholars, however, have found reason to pause in their celebration of the initiative, finding shortcomings in its process, its outcomes, or both. In this paper we argue that initiatives will only infrequently improve the public's welfare. We begin with a survey of the basic social choice and public choice critiques of the initiative process. We argue that, despite recent rigorous scholarly attention as to the effects of initiatives, we find little reason yet to reject the social and public choice criticisms of policy making via direct democracy. We then offer a series of anecdotes about the rise of crypto-initiatives, which are initiatives that use direct democracy as an instrument to achieve non-policy related goals. Finally, we conclude that the problems inherent in the initiative process are being magnified by the increase in crypto-initiatives and the rise of the crypto-political machines, the new 527 PACs, that sponsor them. Increasingly, the public welfare may be only an incidental consideration in the sponsorship, passage and implementation of initiatives. This in turns implies that we consider anew limiting or amending the initiative process.

Keywords: initiatives, public policy, legislative authority, policymaking, social choice, public choice, direct democracy, crypto-intiatives, political machines, political action committee

JEL Classification: K10