Exit, Voice, and Loyalty in Urban Politics

Peter John (University of Manchester)

Policy background

• Choice a key objective of government policy - assumed to deliver benefits to the consumer

• Choice and voice assumed to be complementary – see Social Market Foundation, Choice: The Evidence (2004)

• No tests of this statement

Hirschmann

• Exit, Voice and Loyalty (1970)• Studied nationalised industries in Africa –

found that competition led to loss of efficiency – a puzzle

• Argued that consumers who are locked in agitate to keep services efficient. No incentive to voice under competition when other opportunities available

Hirschmann (continued)

• Posited a negative trade-off between exit and voice

• Mediated by loyalty – a less clear part of the Hirschman model

• Can apply to a variety of settings: schools, employment quits (unions), consumers (see Dowding et al review article: EJPR, 2000)

Modifications

• Voice is too simple – there are different types of voice, collective (eg voting, group membership) and individual (e.g. complaining)

• Collective voice is harder to organise because of CA (PD problems)

• So hypothesis is that individual voice does not trade-off with exit, collective voice does – exit and two voice

Modifications continued

• Exit takes different forms to:– Moving providers within jurisdiction

– Moving jurisdiction

– Exit to private services

So three exit, two voice model

Also voice can be divided into voting and more active categories, so three voice, three exit!

Thinking about loyalty

• Loyalty not well defined in Hirchmann• Better to see it as social investment which

increases voice and reduces exit• Can be conceptualised as social capital

– Neighbourhood attachment

– Trust

– Group membership

Satisfaction

• Need to think about as a separate variable

• Also can mediate exit-voice tradeoff

• Something that providers can affect at the aggregate level

Hypotheses• H1: Intentions to exit will decrease collective voice activity.

• H2: Intentions to exit will decrease individual voice, but less than collective voice

• H3 – Social investment increases collective and individual voice

• H4: Lack of exit availability will increase collective voice more than individual voice

• H5: Dissatisfaction will increase voice first, then exit

• H6: Satisfaction will increase after exit

• H7: Satisfaction will increase after voice has been successfully responded to

The study

• Internet Survey – YouGov

• Sampled 9500 which yielded 4067 responses, a response rate of 42.1 per cent.

• In wave 2 we got a response of 2,619, 64.5 per cent of wave two.

• In wave three we surveyed those who responded in wave two and supplemented the panel to yield 4952 responses which includes 1744 of those from wave 2.

• In wave four we surveyed all the previous waves producing 3468 responses (1690 from waves 1; 1486 from wave 2; and 2941 from wave 3).

• There were 1138 respondents who answered all waves.

• On-line questionnaire

Dynamic aspects of the study

• What does an event in one period do in the next period?

• Key event is exit to the private sector - does exit increases satisfaction

• First we look at change in satisfaction from wave 1 to 2, which is a difference in confidence that an injury will be treated

• The see if there is correlation with exit in wave , which there is: -.05 (p=.08)

Impact of satisfaction on exit over four years of the panel

Time expecting treat 0.0984***(-0.022)

Household income 3.34e-05*** -1.66E-06

Year -0.104*** -0.0199

Sex -0.155** -0.0631

Constant -2.630*** -0.146

Observations 11799

Number of id 5929

Conclusions

• Many expected relationships between satisfaction and voice, and between satisfaction and exit

• There is a link between lock in and voice• Trade-off between exit and voice for intentions to

move, but less for other forms of exit• Policy implications – costs of exit needs to be

factored in to policy choices