Disentangling the Direct and Indirect Effects of the Initiative Process

A large literature documents that initiative states choose different policies than noninitiative states, but little is known about why the policies are different. Do initiatives change policy directly by overriding representatives, or indirectly by providing a threat that alters legislative behavior? This paper develops an empirical strategy to quantify the direct and indirect effects by comparing policy choices in states that actually pass initiatives with policies in states where the initiative is available but none are approved by voters. Evidence from all 50 states on nine separate issues suggests that both direct and indirect effects are important, but the direct effect is several times as large as the indirect effect.