The United States is a distinctive case for studying the way extensive direct democracy can affect fiscal policy. Every state in the Union allows voters to decide certain ballot questions about how to raise and spend public revenue. The U.S. record shows that large‐scale plebiscites fail to produce reliably “pro‐poor” government finance. Direct citizen involvement in fiscal policy has not led to uniformly equitable or financially sustainable state budgets. Nor has it mobilized low‐income groups to express and defend their economic interests. When called upon to make decisions about the amounts and purposes of statewide government spending, the electorate is apt to disregard any hardship for poor people. Political parties and advocacy organizations, working through traditional representative institutions, are usually a more promising avenue for fighting poverty.
Goldsmith, Arthur A., "Plebiscites and the Public Purse: U.S. Experience with Direct Democracy" (2004). College of Management Working Papers and Reports. 12.