A key requirement of democratic governance is that policy outcomes and the majority preference of the electorate are congruent. Many studies argue that the more direct democratic a system is, the more often voters get what they want, but the empirical evidence is mixed. This analysis explores the democratic effect of initiatives and referendums theoretically and empirically. The prediction of the formal model is that “bad” representation (i.e., a large preference deviation between the electorate and the political elite) is good for the democratic effect of direct democracy. An empirical investigation of original voter and elite survey data, analyzed with multilevel modeling and poststratification, supports this argument. Building on the literature, the findings of the analysis suggest that the extent to which direct democratic institutions are conducive for policy congruence—and may thus be advisable as democratic correctives to representative systems—depends on the political conflict structure.