diciary. A separation of powers to the different state authorities puts them in a competitive situation
such that they keep each other in check and subordinate themselves to each other. Third, democracy
is a means to have political decisions oriented by the preferences of the individuals that are governed.
Given that individuals voluntarily subordinate to a constitution, accept a limitation of their liberty and
tolerate the partial coercion by the state, the citizens must have a say in political decision-making in
order to have sufficient possibilities to control and sanction representatives.
Since the constitution provides the rules of the political game, it is too dangerous to enable represen-
tatives to determine the constitution without the explicit consent of the citizens. There is hence an in-
herent logic in the direct democratic decision of constitutional changes. Representatives should not
have a final say on the rules that are supposed to impose restrictions on them. The competence
competence to change the constitutional contract must be with those voluntarily subordinating to it.
The case for direct democratic decision-making in particular on the constitutional level follows from
the need to control representatives in order to enforce the preferences of citizens. It is this eternal
fear of political philosophers and the more recent arguments by rational choice theorists that provide
the basic argument for direct democracy. The same logic holds with respect to the foundation of a
new federation by a new constitution as in the case of the European Union. This is even more im-
portant since the European Convention does not consist of independent wise men that have no inter-
est in the constitutional rules they propose. The Convention is comprised of MEP’s, members from
national executives and legislatures, and members of the Commission. As Vaubel (2002) recently ar-
gued, it cannot be expected that these members of the Convention decide by abstracting from their
individual interests. In this situation, the final acceptance of the European Constitution by the Euro-
pean people in a constitutional referendum is a necessary condition for a European federation to pro-
vide sufficient constitutional restrictions on EU representatives.
2.2 Information, Control and Interest Groups
Proposals of direct democracy are challenged by several arguments, the most important ones are the
information and the interest group arguments. Direct democracy is supposed to have an informational
disadvantage compared to representative democracy that originates from the division of labour be-
tween ordinary citizens and politicians (Kirchgassner, Feld and Savioz 1999, Feld and Kirchgassner
2000). Like people who allow their investment consultant discretion in financial decisions, they dele-
gate decision-making power on political issues to political specialists who have a comparative ad-
vantage in doing politics. Delegation to representatives in the public sector occurs in order to save
information costs. However, representatives then may have leeway to act opportunistically or in the
partial interest of narrowly defined groups. A trade-off between agency costs and information cost
savings occurs that can be resolved by organising political decision-making basically as a representa-
tive democracy, but allowing citizens to intervene selectively in politics by referenda and initiatives
when political outcomes deviate unacceptably strongly from their interests. Referenda and initiatives
serve as means to selectively control representatives between election years in a representative de-
mocracy. Whereas a pure representative democracy has an information advantage over direct de-
mocracy, referenda and initiatives allow to control representatives more strongly.