Some of us never seem to learn. Some of us thought that the election of a muscle-bound actor as governor of California was an amusing, if slightly creepy, sideshow – a lampoon of representative government. Some of us thought that the candidate’s pose as a populist warrior tilting against his state’s ossified power structure was just a dodge. Hard as it may be to believe, it now appears that some of us – we bow our hoary heads in shame, straining the cobwebs that enshroud them – were wrong.

After George W. Bush, Arnold Schwarzenegger is on his way to becoming the most significant U.S. political figure of the first decade of the new century. Whether he will actually rise to that status will likely be determined over the next eight months.

In one sense, Mr. Schwarzenegger can’t help but be influential; governors of California inevitably are. As they never tire of reminding us, they preside over a $1.4 trillion economy, the fifth-largest in the world. For a century, California has seen itself as a laboratory of progressive government and technological innovation.

Yet, more recently that same progressivism and risk-taking has led the state government into disastrous mistakes, and the severity of their consequences is another source of Mr. Schwarzenegger’s significance. The task he faces in trying to undo the damage is, appropriately enough, Herculean – even Conan-esque.

Last week, Governing magazine’s Government Performance Project gave California its lowest rating among the 50 states. That C-minus grade ties the Golden State with Alabama, not the kind of company Californians like to think they deserve.

“People who work in California government love to talk about how their state dwarfs entire countries,” the report’s authors wrote, rather snarkily. “Well, everybody needs something to be proud of. They certainly can’t talk about how the state dwarfs anyone in the quality of its management. When it comes to management, California is the dwarf.”

The report was careful to absolve Mr. Schwarzenegger’s young administration from responsibility for the state’s ills. To the contrary, “in many cases, California is a victim of its initiative process” – a legacy of the progressive era that allows voters to micromanage state government according to whatever spasmodic political impulse seizes them.

Thanks to Proposition 98, for example, 40% of the state’s general revenue must be dedicated to elementary and secondary education. Other initiatives have mandated spending that accounts for an additional 30% of the budget. Budget writers in the legislature have no flexibility in responding to changing financial pressures or political priorities.

Not surprisingly, the state faces chronic deficits. Yet it’s unlikely that, even with a free hand, the present legislature would make the hard decisions required for sound budgeting.

Even by today’s standards, California’s political class is unusually sclerotic. Of the state’s 153 legislative and congressional seats, none switched party control last November, thanks to the legislature’s painstaking gerrymandering.

Mr. Schwarzenegger’s response to this unhappy state of affairs has been to seize the initiative process, a large cause of the state government’s dysfunction, and refashion it into the mechanism by which the failure would be reversed.

For a special election in November, he hopes to submit four initiatives that together would constitute radical, comprehensive political reform. One would require automatic spending cuts when the legislature fails to balance the books.

Another would allow school districts to initiate merit pay for teachers – a direct shot at the teacher unions that have resisted education reform. A third would help unburden the state of its ruinous public-pension obligations.

The fourth is the most far-reaching of all. It would empanel an independent committee to redraw boundaries for political districts – depriving the permanent legislature of its gerrymandering power and reintroducing competition to legislative elections.

“This takes Schwarzenegger back to square one,” says Bill Whalen, a California political consultant and a research fellow at Stanford’s Hoover Institution. “It’s the message that made him governor in the first place. He’s saying if you can light a fire under these guys in Sacramento, you go a long way toward solving the state’s other problems.”

Most delicious of all, Mr. Schwarzenegger has discovered that among the most prominent opponents of his anti-gerrymandering initiative are fellow Republicans in the state’s congressional delegation. The opposition is a reminder of the trans-partisan nature of the permanent political establishment – and it allows Schwarzenegger to cast himself again as the populist warrior beyond narrow party interest.

Can he persuade voters to go along? Last week’s Field Poll showed public support for all but one of the proposals hovering about 50%. (Merit pay for teachers gets 60% support.)

“Redistricting is a hard sell for voters,” Mr. Whalen says. “It’s complicated. They think gerrymandering is a contestant on ‘Survivor.’ But remember, this is what Schwarzenegger does best,” Whalen said. “It’s a matter of getting people’s attention. He can simplify things, make them real for people. And when he does, he’s very hard to beat.”

If Mr. Schwarzenegger wins, he will emerge as a colossus of the U.S. political landscape. And he may even force Democrats to give thanks – because the foreign-born Republican governor can’t run for president in 2008.

Mr. Ferguson is a columnist for Bloomberg News.