Political scientists are increasingly turning to direct democracy, as practiced in the American states, to investigate a broad range of questions dealing with median voter preferences and policy responsiveness, minority interests, theories of representation, policy implementation, political knowledge and behavior, citizen engagement, mobilization and turnout, voter competence, activities of interest groups and political parties, campaign finance, media effects, and agenda-setting. In this review article, we examine recent research on the instrumental effects of ballot measures on policy outcomes as well as the educative (and spillover) effects of the process of direct democracy on candidate contests. Throughout the article we suggest avenues for possible future research.