- Having a mandatory budget referendum in place reduces public spending by 12%.
- Voter initiatives that allow citizens to propose new laws also lower public spending. For every 1% reduction in the signature requirement, public spending declines by 0.6%.
- The constraints imposed by direct democracy at the state level do not result in more local spending. This result suggests that state politicians cannot avoid the disciplining effect of direct democracy by simply shifting responsibilities to lower levels of government.
A further paper that is worth reading is: "Preferences Matter! Voter Preferences, Direct Democracy and Government Spending" (Unpublished Manuscript) a paper written in December 2011.