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Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States
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Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States

4.14  ·  Rating details ·  769 ratings  ·  74 reviews
An innovator in contemporary thought on economic and political development looks here at decline rather than growth. Albert O. Hirschman makes a basic distinction between alternative ways of reacting to deterioration in business firms and, in general, to dissatisfaction with organizations: one, "exit," is for the member to quit the organization or for the customer to switc ...more
Paperback, 176 pages
Published February 1st 1972 by Harvard University Press (first published January 1st 1970)
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 ·  769 ratings  ·  74 reviews


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Manny
I know virtually nothing about economics, so it surprised me to find that the ideas which Albert Hirschman advanced in this book were considered so novel when he published it in 1970. Hirschman looks at markets where "consumers" find that the "product" they are currently using is suffering a quality decline. What do they do? The classical answer, apparently, is that they shift to a competing product. This sends a signal to the provider of the defective product; they raise their game and stop los ...more
Morten Greve
Aug 06, 2017 rated it really liked it
This is one of those rare books that - despite their deceptive simplicity - contains a fundamental and timeless truth. Hirschman's essential argument is (1) that economic and political/sociological analysis can achieve much more in combination than as separate undertakings; (2) that economic theory has ignored the vital question of quality (as opposed to price and quantity). Both valid points.

His simple yet powerful analytical framework explores how quality deterioration can best be adressed thr
...more
Frank Stein
Dec 07, 2011 rated it it was ok
I don't know where I read or how I heard that this was a mind-blowing read, but the book has been on my shelf forever and I kept meaning to get around to it when I had the chance. There should have been no rush.

The book is mercifully short, more of a philosophical pamphlet than anything else, and it presents itself as what was then (in 1970) a surprising speculative foray by an economist into political science. In this book, Hirschman compares and contrasts two strategies to decline in a product
...more
M
Apr 28, 2020 rated it really liked it
Presents a surprisingly powerful set of simple conceptual tools (“exit”, “voice”, “loyalty”) and uses them to analyse the deterioration and recuperation of firms and non-firm organisations. Especially enjoyed the chapters on two-party systems and the book’s thorough engagement with questions of political organisation. A healthy and dynamic balance between exit and voice seems to be ideal. Abrupt exit can destabilise markets, permit inertia and incompetence, and—at worst—abdicate the fight agains ...more
Nick Klagge
Dec 12, 2012 rated it really liked it
Shelves: economics
This little book has been on my to-read list for a while, but I was finally prompted to pick it up by the recent death of Albert Hirschman. I'm very glad I did. The concepts of "exit" and "voice" have percolated into culture enough that I went into the book kind of feeling like I already knew what it was about, and in a sense I did. Nonetheless, I really enjoyed reading it. Hirschman is a supremely clear thinker and writer. When he makes an argument, he usually refrains from employing equations, ...more
Seth Benzell
May 25, 2021 rated it liked it
There’s a grain of truth at the bottom of this which is important — if institutions are riven by internal dynamics (rather than being unified optimizers) AND if consumers/members aren’t atomized rationalizers (i.e. they have powerful roles/buying power or are willing to sacrifice themselves for a cause) then it can certainly happen that internal pressure campaigns cause change. For some types of institutions this is an important dynamic (in terms of causal power, not necessarily for good), and i ...more
Jacob Cutts
May 21, 2020 rated it really liked it
Interesting, but longer than it needed to be.

I decided to read this book because I had heard about the core argument of the paper: an investigation of the two main ways that people exert pressure on companies and organizations, exit and voice. That was enough to entice me into reading it. Hirschman does a good job of elaborating on the argument, though I don't really feel that I needed to read a whole book on the subject -- a journal article length (20-30 pages) would have been sufficient to com
...more
Gavin
Mar 09, 2019 marked it as to-read
Shelves: stats, econ
Casual, brief and witty theoretical economics. Actually a unification of economics, political science, and this other thing.

The prose is deceptively plain, like say Anscombe. There's basically no data, it's all intuition pumps. (But I share most of his intuitions, which surprised me.)

Some key premises:
* Nonmarket forces matter.
* Dissent helps us. It is extremely rich data for anyone who cares about doing good work, and so lasting.
* If there were only rational (critical and disloyal) custome
...more
Adrian S
Nov 13, 2016 rated it it was amazing
The book looks at the economic incentives of dissent, characterizing consumers as agents who have different levels of emotional investment in the quality of a product or a service (the product can also be membership in an organization, such as a state or a religion), and who react to random quality lapses in the market via two main channels: (a) exit (switching to a competitor), and (b) voice (complaining, becoming politically engaged, and campaigning). The break-even point between the two is in ...more
Vincent Li
Jun 30, 2018 rated it it was amazing
A rare book that is both insightful and less than two hundred pages. I miss the days when "serious" books got by their content and not by their length. Originally recommended to me by a freshman year professor, Exit, Voice and Loyalty is a classic for a good reason. I was recently reminded of it when in Con Law. Exit, voice and loyalty made a surprise appearance in Bruce Ackerman's article about the role of exit and Carolene Products footnote 4 (if "exit" from unpopular minorities is too easy, i ...more
Elise
Dec 27, 2012 rated it liked it
I read this book on Nick's strong recommendation (and lucky me, I also benefited from his marginalia). He had pitched it to me as an economist's very clear rendering of the interplay among "exit, voice, and loyalty," ideas extremely applicable to contemporary education reform. I actually found Hirschman to be a little bit difficult to follow - but that's with my high school-level of economics knowledge. I was, though, intrigued by Hirschman's use of school choice as an illustration of "exit" (le ...more
Jared Tobin
Jul 13, 2017 rated it liked it
The central ideas developed in this book - 'exit', 'voice', and 'loyalty' - are tremendously useful for reasoning about the nature and dynamics of organizations. The book itself -- even at its meagre length -- felt far too long. The crux of the ideas can simply be explained more-than-adequately in a handful of pages (the Wikipedia article will suffice, really).

The book did add a few observations that I found improved my thinking on the subject. The explicit assertion that 'exit' tends to crowd o
...more
Daniel Lovins
Aug 09, 2015 rated it really liked it
This review has been hidden because it contains spoilers. To view it, click here.
Sarah, High Lady of the Court of Feels
Alright...so at risk of sounding like some uneducated visagoth (sp?), I'm giving this a whooping 2-stars.

While I appreciate stream-of-consciousness theory as much as the next guy in conversation, I don't much appreciate it when it's in book form and is not very insightful/surprising and spends 100+ pages rehashing the same thing. I don't know if this is more outdated than anything, but I wasn't very impressed. Back when this was published, however, I'm sure it made more of an impression.

Sorry H
...more
Roger Lohmann
May 28, 2013 rated it really liked it
This is one of those quiet classics of social science and should be familiar to every student of organizations, policy, community or public affairs. Hirshman's sensible argument is that when faced with a decision or policy you disagree with or doubt, you can leave (exit), disagree (voice) or be a good follower and go along quietly (loyalty).
Goodreads also shows a 46 page Reconsideration of Hirschman's text by Ulrich Arnswald, but I've not been able to track it down.
...more
Lee
Apr 23, 2021 rated it really liked it
an economic theory of how a dysfunctional institution might decline or improve due to its patrons exercising two important powers at their disposal: exit and voice. exit can mean stop attending meeting, buying from a competitor, switching political parties, or emigrating from a country. voice can mean publicly criticizing, leaving reviews, writing letters, lobbying for a change in leadership, calling for regulation.

exit is the power an economist usually talks about. exit makes sense under condi
...more
João
Excellent! Very useful mental model that can be applied to companies, public organizations, countries, relationships, you name it. When a product (generically used word) decreases in quality, people can complain about it - Voice - or switch to a different product - Exit. This is a super basic (in retrospect) premise, but the book explores interesting consequences that come from this. An excerpt:

> Suppose at some point the public schools deteriorate. Thereupon, increasing numbers of quality-educa
...more
Michael Lewyn
Jul 19, 2018 rated it it was amazing
hort but not simple discusssion of how various organizations can change. Most business organizations rely on exit- that is, the threat of customers exiting may cause businesses to respond to market forces. Political and religious organizations are more likely to rely on voice- that is, members' ability to argue for change within the organization. Loyalty encourages people to stay within the organization rather than leaving.

Hirschman applies his theory to some real-world situations. For example,
...more
Jeremy
Nov 13, 2019 rated it it was amazing
This is a fantastic little book. Hirschman makes the obvious in retrospect observation that organizations which lose quality can be influenced by both exit (customers switching companies, members no longer attending and paying dues) and by voice (people complaining).

There are a number of really insightful observations about the implications of considering both exit and voice. Many of my favorite consider the heterogeneity of group members and the interaction between these two options.

For exampl
...more
Rolando
May 29, 2021 rated it it was ok
If you are leading an organisation, this book may help you to measure its decay based on exit and voice. Exit, measured as the difference between exiting and incoming customers, is the classical economic clue for decay or success. Voice, slightly hard to measure and referring to the ability of people to show discontent, gives you another sign of decay. But, how much attention should be paying to voice? That's what this book analyses in various situations.
The examples I remember from the book ar
...more
Rebecca
This is classic economics that becomes useful for the layman when applied to situations where one is dissatisfied with a product, a company, a country, a political party, a religion, even a family.

Does one take off when there seems to no longer be any benefit or quality there for them?

Does one file a complaint, or speak out, or protest while remaining within?

What is the best way to find improvement and progress for organizations that are unwilling to make changes? Especially organizations wherei
...more
Dio Mavroyannis
Mar 06, 2020 rated it really liked it
This is quite a special book to me because it was given to me by my supervisor for my PHD defense. I suspect the main reason he gave it to me is that it touches upon one of my chapters which includes discussions of network value, goods whose value increases with the number of users. The book itself is very interesting from both an economics and political philosophy background. However, I found that the discussion was often unclear, the appendix doesn't help much, it seems to me like a few equati ...more
Brian Hanley
Jul 15, 2019 rated it really liked it
Solid book with a lot of thought-provoking points. Not light summer reading however. Written over 40 years ago the questions raised and the ideas floated absolutely hold water today. Really, really interesting stuff. I particularly enjoyed the conclusion as the author balances the effect of exit and voice on the American experiment which (as is pointed out) only exists as a function of exit.

The book is short in terms of page count but give it some space. This is not one to be rushed through.
Jonathan
Nov 06, 2019 rated it really liked it
pretty dense for its short length, but has some really interesting ideas on integrating exit (more common in market situations) with voice (more common in politics, families, etc) and how a sense of loyalty can shift the balance. really interesting insights on the topic of education (maybe school vouchers aren't such a great avenue?) and elected officials (we need more folks to resign under protest and make their exits count). overall, lots to chew on in this slim book. ...more
Oliver Kim
Somewhat embarrassing that I hadn't finished this by the time some tweets of mine on Hirschman went mildly viral (by the limited standards of social science twitter). But, now that I've finally finished it, it clearly lives up to its reputation. Having heard the basic contours of the main arguments before, I most enjoyed the less talked-about penultimate chapter on the American fondness for exit, and the psychology of why so few US officials choose to resign. ...more
Cyrus Samii
Aug 05, 2018 rated it it was amazing
A classic -- Hirschman's most notable work. It develops an analytical framework that applies to political systems just as well to firms and really any other type of organization. This book provides a metaphor that has been the basis of much political theorizing since it's publication. Well worth reading this alongside the biography by Adelman. ...more
Elliot
Jan 15, 2019 rated it liked it
I think I was a bit too distracted when I was reading this to really absorb what it was trying to say. That combined with being a few too many years out of grad school and therefore not in the academic analysis mindset anymore made it a little difficult to get as much out of this as I should have.
Milk Badger
Jun 18, 2019 rated it it was ok
This is a form of conceptual analysis that, as far as I am aware, is no longer seen in the field of economics today, as it largely consists of exploratory armchair conjecture lacking empirical or experimental validation.
Erica DeMond
May 22, 2020 rated it it was amazing
Great framework for thinking about organizational change. Hirschman does a nice job bringing new thinking to standard economic principles. Is a bit dry, though, so only read if you are the mood for something academic.
Jeff
Sep 12, 2017 rated it liked it
It obviously gives an important framework for understanding feedback mechanisms in economics, but kind of like "Metaphors We Live By" could probably be condensed into a much shorter volume. ...more
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Albert Otto Hirschman was an economist and the author of several books on political economy and political ideology. His first major contribution was in the area of development economics. Here he emphasized the need for unbalanced growth. He argued that disequilibria should be encouraged to stimulate growth and help mobilize resources, because developing countries are short of decision making skill ...more

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