Referendum is a method of direct democracy that allows voters to approve or reject new laws or proposals. A referendum may involve any proposed change to binding documents, including constitutions, laws, statutes, regulations, contracts, budgets, policies or code amendments, country measures, organizational procedures, and even election laws (as long as they are not a ballot initiative).

The use of referendums reflects a belief in the ability of the body politic to arrive at optimal decisions and a desire for legitimacy. Those who support the use of referendums argue that voter apathy and disenchantment with traditional forms of democracy can be resolved through direct participation in democratic decision making. However, surveys in referendum campaigns consistently indicate that the main complaint of citizens is that they receive too little information about the finer points of a referendum proposal.

A referendum campaign requires extensive resources and the participation of a wide range of stakeholders. The process is prone to errors and misinformation, and the effects of referendums can be unpredictable. Referendums are more likely to be successful when they provide voters with clear ideological cues, as in the case of the British electoral reform referendum, or when the benefits and costs of a change are apparent to citizens.

Some governments impose participation quorums in referendums, where a certain percentage of eligible voters must participate in order for the outcome to be legally valid. This can prevent a referendum from being skewed by low turnout or dominated by a motivated minority.