Exit, Voice, and the State

The possibility and widespread practice of exit, on the part of dissatisfied citizens, has important, though highly diverse, bearings on the formation, solidity, and “quality” of the state. An association exists between the wide availability of exit and the condition of statelessness in a number of aboriginal societies as well as in Rousseau's state of nature. In the 18th century, the exit option—which became available to the wealthy as movable forms of property increased in importance—was hailed by such observers as Montesquieu and Adam Smith as a restraint on arbitrary rule or taxation. Today, on the other hand, such exit (capital flight) tends to render the introduction of needed reforms more difficult. Emigration-exit was benign in its effect on the sending countries in the 19th century and may have been helpful to the process of democratization in Europe. Lately, however, exit has been considered a threat to the existence of the state and has led to strong, though very different, defensive reactions in Ireland and East Germany. The small modern state can fend off excessive exit by providing a variety of public goods to its citizens; one of these public goods is “understood complexity.”