How Entrepreneurial Exit Response to Dissatisfaction with Public Services Affects Public Services Provision?

Following Hirschman’s seminal Exit, Voice and Loyalty, an exit response to dissatisfaction with public services is often portrayed as a replacement of one service provider with another, depending on the availability of alternatives. Nonetheless, occasionally, citizens exit proactively by creating a viable alternative themselves, referred to as ‘entrepreneurial exit’ response. Whereas citizens’ roles within the public service sphere are referred to as ‘participators,’ ‘customers,’ and ‘co-producers,’ entrepreneurial exit indicates the entrepreneurial role citizens may play. Similar to the additional forms of exit, entrepreneurial exit becomes meaningful if the newly-introduced form of service gains social acceptance, especially when it reflects policy non-compliance. What the consequences of entrepreneurial exit are for public service provision and for policy? This study explores this effect drawing on past manifestations of entrepreneurial exit, namely planned homebirth, homeschooling, children with disabilities, claim clubs in the American West, as well as a contemporary entrepreneurial exit, namely Network transition communities. Acting as entrepreneurs, citizens fundamentally change their role in the public service domain, from reactive to proactive. By transforming laymen into providers of professional services, an entrepreneurial exit influences the relationships between the government and the citizens, primarily as concerns professionalism and authority. Presumably, opponents of entrepreneurial exit will emphasize that it is fundamentally challenges public service provision, challenges the authority and legitimacy of the government, and casts doubt on the professionalism and knowledge of employees of public service organizations, such as teachers, physicians, policemen and school principals. Advocates, on the other hand, will emphasize that it may contribute to the development and implementation of new ideas and to the creation of new opportunities that become available to the public at large.