Inspired by Shadbegian (1999), we use the passage rate of citizen initiatives in a state as an instrument in the analysis. The underlying assumption is that the states where citizens are more successful in passing their initiatives (on any subject matter) are more likely to adopt TELs. Since the initiatives could encompass all subject matters, its passage rate does not If the proposed instrument is valid, that is, they satisfy the conditions of instrument relevance and exogeneity, the coefficient on the endogenous variable from equation (1) can be estimated using a two-stage least squares (2SLS) model. The first stage begins with an ordinary least squares (OLS) regression expressed as follows: