Does direct democracy enhance political efficacy? This article examines the effect of direct democracy on political efficacy. Normative theorists have suggested that direct democracy has educative effects on citizens, such as promoting political efficacy. While a number of studies have examined the corresponding hypothesis, their empirical findings are not clear-cut. This study attributes the inconsistent results to two problems of the existing studies: the employment of cross-sectional data and the heterogeneity of popular vote issues. This study closes this gap by examining the effect of direct democracy in local politics on political efficacy in a more systematic and controlled way. More concretely, it utilizes the Japanese case: In the first decade of this century, more than 400 Japanese municipalities held a popular vote for the first time because the Japanese national government promoted municipal merger. Therefore, the Japanese case provides multiple popular votes on comparable substantive topics that can be conceived as an homogeneous treatment. By applying multilevel modeling to panel survey data, this study demonstrates the causal effect that the popular vote increases the level of internal political efficacy.