The Hidden Cost of Direct Democracy: How Ballot Initiatives Affect Politicians' Selection and Incentives
33 Pages Posted: 12 Jun 2011 Last revised: 26 Jun 2016
Date Written: February 23, 2016
Citizen initiatives and referendums play an important role in modern democracies, from treaty ratification in the European Union to gay marriage in California, to the control of foreign workers in Switzerland. Departing from the classic opposition between direct and representative democracy, we study the equilibrium effects of direct democracy institutions on the incentives and selection of elected officials. We find that facilitating direct democracy induces a negative spiral on politicians' role and contribution to society, which may dominate any direct benefit. The theory offers predictions on reelection probabilities and politicians' performance consistent with recent evidence from the U.S. states.
Keywords: Direct Democracy, Initiatives, Political Agency, Referendum
JEL Classification: D72, D78, P16
Suggested Citation: Suggested Citation