Exit or voice?

If there’s only one institution providing a given service, it’s pretty challenging on the margin to get improvements to the given service. After all, they’re not going to lose you if their service is mediocre.

One standard refrain is to democratize, or if already in name democratic, to encourage participation. This idea is the core of voice as a strategy to reform institutions. You give the stakeholders the ability to influence the movers and shakers by opening a line of communication.

This strategy certainly works some of the time. Intentional communities can work together to produce great things.

Interestingly, voice seems to work even better when exiting is on the table. This is in large part because it’s a lot more binary, and allows for more game theoretical changes. If I can go from 1 to 0, my funding and energy is able to be spent doing something else.

City governments for instance tend to generally be pretty good, because it’s easy to move areas. Oftentimes when cities have problems, they’re a result of federal and state policies to prevent what they call ‘race to the bottom’ or what I call low taxes, and minimal restrictions on what people can do.

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