Argument: Citizens are not informed enough to make good policy
Zwentendorf: In 1978 there was a referendum about turning on an Austrian nuclear plant called Zwentendorf. This plan was scrapped (50.5% voted against), which wouldn't be a big deal unless this plant was already built and ready to be turned on. Firstly, it meant throwing approximately 1 billion dollars out of a window at that second. Secondly, maintaining a nuclear plant to avoid leakage means another millions of Euros annually. A great example how direct democracy enabled a fatal policy contradiction.
Port of San Diego: In 2008 "the Board of Port Commissioners voted unanimously to oppose a proposed ballot initiative that seeked to amend the San Diego Unified Port District's master plan to allow hotels, restaurants and possibly a sports stadium at the Tenth Avenue Marine Terminal cargo facility. The Board unanimously agreed that the initiative threatens the viability of the terminal by allowing non-maritime uses. (...) The Board, along with its outside legal counsel, questioned the legality of the initiative while raising a concern that the proposed changes could compromise security at the Tenth Avenue Marine Terminal. (...) The San Diego Unified Port District is part of a network of ports across the country and world, particularly in the Far East and Europe. Reconfiguring the way cargo is delivered to the Port of San Diego and others could complicate cargo handling at other ports, particularly along the West Coast. (...) Pete Litrenta, executive director of the Ship Repair Association, characterized the initiative as nothing more than a land grab by developers and out of town investors. "This is bad for the region and upsets the economic diversity of our regional economy by replacing maritime businesses with more hotels and retail business," he said to the board.""
Direct democracy hardly allows for well-informed and good-quality decisions. In the representative democracy it is the politicians and/or experts who make important decisions regarding laws, finance, etc. In contrast, in direct democracy we give the people the opportunity to decide on the issues at hand, although they most probably lack specific knowledge to make good-quality decisions. This can lead to short-sighted decisions that are after all not for the good. For example we can look at the referendum in Panama in 2006. Its people voted for a controversial 5 billion dollar scheme to expand the Panama canal's capacity, completely neglecting possible environmental risks.
James Boyle. "The initiative and referendum: its folly, fallacies, and failure." (1912): "a small minority of the total number of the voters and human nature being what it is probably a large proportion of the signers have not got the slightest knowledge of what they signed It is notorious that men can be easily persuaded to sign petitions for almost anything."
James Boyle. "The initiative and referendum: its folly, fallacies, and failure." (1912): "It would be as easy to run the business of a big railroad by leaving every detail of its management to a vote of the shareholders as it will be to run the business of a State under the new system."
Honorary James Bryce the British Ambassador to the US, said in 1910: "The less you trustj them the worse they will be TheyV may be ignorant yet not so ignorant as the masses."