Hirschman provides the example of a publicly funded school where the quality of education declined. Quality-conscious parents would increasingly remove their child to a privately funded school, given that they are relatively indifferent to the cost. A price-conscious parent might notice that decline but lack the resources to make exit a viable option. At some point the school would know there was a problem, having had a number of students leave, but have no financial incentive to change, as the parents left who cared sufficiently about the quality to point to exactly where it had failed. The school remains locked into that state. Hirschman notes that in this and similar cases ("connoisseur goods"), a "tight monopoly could be preferable", preventing exit of quality-conscious consumers. A lack of exit would be better for the school, if not the child, by keeping an active voice among the parents.
Emigration A key application of Hirschman's scheme of exit, voice and loyalty has been emigration. Drawing on the analogy of discontent consumers buying elsewhere, "exit" translated into leaving a country and migrating to a different nation-state, while "voice" described the option of articulating discontent, which as Hirschman noted, "can be graduated, all the way from faint grumbling to violent protest". Hirschman modeled these options as mutually exclusive and postulated a seesaw mechanism: the easier available the exit option, the lower the likelihood of voice. For rulers, emigration served as a safety-valve, by which the discontent renounced on their possibility to articulate protest. "Latin American powerholders have long encouraged their political enemies and potential critics to remove themselves from the scene through voluntary exile. The right of asylum, so generously practiced by all Latin American republics, could almost be considered as a 'conspiracy in restraint of voice'." In 1989, in the
GDR it was the escalating dynamic of out-migration that led those who wanted to stay to take to the streets to demand change. Exit triggered voice, and both worked in tandem. Moreover, Hirschman's scheme assumes a model of nation-states as a jigsaw puzzle of clearly delimited "containers", and migration as the process of unidirectionally moving from one container to another. The emergence of transnational migration diagnosed since the 1990s has challenged this assumption. As emigrants increasingly maintain strong social ties (loyalty) to their country of origin, including a claim to have a say in its public affairs (voice) – Hoffmann argues – in transnational migration exit, voice and loyalty are no longer exclusive options; the nature of migrant
transnationalism is defined precisely by the overlapping and simultaneity of these categories.
Politics The exit, voice, loyalty model can be used to explain relationships between nation states and their citizens. The model predicts that when citizens have a credible exit threat and states are dependent on their citizens, states are less likely to take actions that the citizens would object to. For the case of increased
taxation by the state, examples of credible exit threats include having the economic resources to flee or the ability to easily
evade taxes. States are said to be dependent on their citizens if they value citizen loyalty more than they value the benefits that would result from a policy change. When both of these criteria are met, the model would predict that the state would not pursue a policy that would encourage citizens to exit or to use voice. Additionally, the choice between using voice and exiting depends on which method has the least amount of costs and most benefits. In the case of
Africa in
precolonial and early colonial times, citizens often chose to exit in response to unfavorable policy changes and this exiting took the form of
emigrating away from a state. Even when citizens could use voice, exiting was a better option because there was a large amount of open land that could yield benefits that were similar to the benefits obtained by living within the state. However, in the last hundred years there has been a shift in strategy away from migration (exit) and towards
protesting (voice) because it is no longer as easy to find open land to exit to. Loyalty is an essential force for Hirschman, shaping both voice and exit especially when it is difficult to join an organization. Hirschman postulated that contrary to the
Hotelling–Downs analysis of political participation, those with "nowhere else to go" instead of being marginalized, their voices would become amplified. When citizens can easily
mobilize, the cost of mobilization is low for the citizens but the impact of using voice in a mobilized manner can lead to a large cost for the state. Exit can be an effective strategy for gaining greater political voice in the case of
public goods Miles Kahler uses Hirschman's framework in his 1984 book
Decolonization in Britain and France to explain the behavior of political parties in France and the UK.
Employment Hirschman's exit, voice, and loyalty analytical framework has underpinned important research within employment relations. Hirschman's insights that exit and voice are often, but not always, mutually exclusive and that loyalty will moderate a consumer's chances of voicing any misgivings are useful in explaining the link between workplace policies and outcomes. An assumption that consumers have power underpins Hirschman's original framework. For instance, Hirschman argued that, in most instances, once consumers or 'customer-members' of an organization had voiced their concerns, decision makers within the selling organization could be expected to search for the sources of those misgivings and attempt to remedy the situation. leading to important implications for how exit, voice, and loyalty are treated within the employment context. For instance, in sharp contrast to Hirschman's argument that, where exit is possible, voice is likely to be determined by 'the extent to which customer-members are willing to trade off the certainty of exit against the uncertainties of an improvement in a deteriorated product', leading loyal employees to remain silent. For this and other reasons, a concept of 'neglect' needs to supplement Hirschman's exit, voice, and loyalty framework within the employment context.). Alternatively, 'toleration' is sometimes applied to situations in which employees remain with the organization, aware of problems, yet do not voice concern or grievance. Teacher unions negotiate for better wages and working conditions, but unions also provide a platform for “voice.” Choi and Chung found that the union-sponsored sense of voice was critical in the reduction of teacher turnover. Middle managers may feel caught between two responsibilities, especially during periods of organizational change: the mandate to remain loyal and the mandate to voice concerns about changes that they are obliged to enforce. Gunnarsdóttir described a situation in which middle managers on welfare professions were able to maintain effective autonomy and their perceived sense of loyalty by dispersing opposing outlooks among the group. O'Meara, Bennett & Neihaus discuss what might "pull" staff members away from their job, one example being better wages. They also discuss what might "push" them away from their job, one example being that they are unhappy with their current work circumstances. These faculty members are leaving for a number of reasons. Money and uncomfortable working circumstances are examples. Some might not be able to tolerate new leadership, or changes in the way they are expected to work. Saifullah & Shahida suggests that both professional respect and employer-employee relation influenced the employees' loyalty, but the effect of employer-employee was larger. Having a good relationship with employees has real reactions on their loyalty. ==Reception==