Disclaimer. Don't rely on these old notes in lieu of reading the literature, but they can jog your memory. As a grad student long ago, my peers and I collaborated to write and exchange summaries of political science research. I posted them to a wiki-style website. "Wikisum" is now dead but archived here. I cannot vouch for these notes' accuracy, nor can I say who wrote them.
Lupia and Matsusaka. 2004. Direct democracy: New approaches to old questions. Annual Review of Political Science 7:463-482.
A review of the literature on direct democracy, structured around four main research questions.
As Lupia and McCubbins (1998) argued, voters don't need perfect information. As long as institutions help voters discern people's incentives (e.g. truth-in-advertising laws, perjury penalties, etc), voters can rely on cues and information shortcuts. Lupia (1994) showed that voters who (in exit polls) vote based on cues vote the same as people who really know the issues.
Money helps defeat initiatives, but it doesn't do much to help them pass. This makes sense, given voters' baseline preference to stick with the (familiar) status quo. Spending by business groups is far less effective than spending by public interest groups. Convincing voters that an initiative represents an actual improvement over the status quo requires more than money: it requires endorsements (i.e. cues for voters) from well-known groups/individuals and volunteers.
As Gerber (1996) shows, initiatives can affect policy without even being used. Policy reflects public opinion more closely in states that have the option of the initiative--especially when it is an easy option to use (i.e. it's not too hard to get something onto the ballot).
Initiatives today tend to move policy in a conservative direction; in an earlier period, they tended towards liberalism. The authors suggest that initiatives may be a "median reverting" institution--when legislators drift too far from the median preference, institutions pull them back.
Even if voters get something passed, they rely on the legislators (who didn't pass the initiative themselves, apparently) to implement it. This presents a problem, although the authors have no data to verify whether the problem actually exists.
As the authors remind us, legislatures are strongly interested by special interests. The question, then, is whether special interests are relatively stronger in initiative campaigns than in the legislature--a question about which we have little data. However, Gerber (1999) has shown that initiative states tend to have policy more in line with public opinion than non-initiative states.
In the direction of change argument (3b, above), the authors imply that legislators (today) are consistently more liberal than their constituents. This makes no sense. And if it isn't true, then their argument holds no water.
Research by the same authors
Research on similar subjects