Perhaps the most dramatic change in the California political system over the past two decades has been the increasing use of the initiative process. Between 1976 and 1996, Californians voted on 106 statewide ballot initiatives. Spending on initiative campaigns has grown commensurately, peaking in 1996 at an all-time high of $140 million. Many observers argue that the initiative process has been captured by wealthy economic interests able to “buy” favorable initiative legislation. This background paper presents evidence to the contrary. Despite their vast monetary resources, economic interests are generally unable to enlist the sympathy of a sufficiently large number of people to pass new laws through the initiative process. Economic groups more often and more successfully use their resources to oppose ballot measures and thereby maintain the status quo.