Theorists such as Carole Pateman and Benjamin Barber suggest that democratic participation will engage citizens and lead them to have more positive regard for political processes and democratic practices. The American states provide a setting where provisions for direct voter participation in legislation vary substantially. If participatory institutions have an ‘educative role’ that shapes perceptions of government, then citizens exposed to direct democracy may be more likely to claim they understand politics and be more likely to perceive that they are capable of participation. They may also be more likely to perceive that government is responsive to them. We merge data on state-level political institutions with data from the 1992 American National Election Study to test these hypotheses with OLS models. Our primary hypotheses find support. We present evidence that the effects of exposure to direct democracy on internal and external political efficacy rival the effects of formal education.