This paper provides a definition of efficiency convenient for our purposes and presents a model where both Exit and Voice can be necessary in order to achieve efficient results, given that the decline of organizations can have several different originating factors. Then it identifies the analytical conditions under which Exit is spontaneously chosen by citizens or clients despite being less efficient than Voice. The paper shows that the use of Exit when Voice would be more efficient is not as general as Hirschman seemed to imply but it can arise under well-specified circumstances. In its final part, the paper suggests how institutions should be designed in order to prevent such inefficient results.
Franzini, M. (2016), "Efficient Institutions: The Role of Exit and Voice
Emerald Group Publishing Limited
Copyright © 2016 Emerald Group Publishing Limited