In this research note we have set ourselves the following three principal objectives. First, we show that the well-known concept of consensus democracy, which covers various forms of the division of power, involves analytical problems. Confusion may arise when relating consensus democracy to government action, because the institutions subsumed under the broad concept of consensus democracy, such as executive power-sharing, the multiparty system and federalism, are likely to have different and contradictory effects on the size of government. In this vein, we provide considerable evidence that different aspects of consensus democracy have contradictory effects on government size. In doing so, we endorse the view that it is only variance in the type of democracy (majoritarian versus consensus democracy) that causes systematic differences in government action. Secondly, in scrutinizing the contradictory effects of various aspects of consensus democracy on government size, we distinguish and operationalize the three different analytical views of Crepaz, Lijphart and Tsebelis on how political institutions may be distinguished with regard to their veto nature. Thirdly, we try to close a gap in understanding comparative politics, by quantifying and comparing the veto potential of direct democracy. International comparative investigations of the effects of direct democracy on public policy are hardly possible. The Swiss cantons present themselves as a suitable alternative source of evidence, given that they vary considerably with respect to their plebiscitary elements.

To understand why consensus democracies have a contradictory effect on government size, it is crucial to bear in mind that there are two separate dimensions of the majoritarian–consensual contrast.