When do Representative and Direct Democracies Lead to Similar Policy Choices?

The paradigm of a direct democracy in which individuals vote direclty on the issues is widely used in the recent political economy literature that explicitly models the interaction between economic and political behavior. Yet, in most existing democracies policy decisions are delegated to elected officials. This begs the question of whether direct democracy models are useful for understanding actual policy choices. This question is also of independent interest since until the eighteenth century, the possibility that legislatures might consist of elected representatives remained mainly outside the theory and practice of democratic government. To answer this question we posit a model in which elected officials are better informed than the public about exogenous circumstances, but at the same time, are also influenced by particular constituencies whose desires policies generally differ from those of the decisive voter in the population.