Accountability in public services: exit, voice and capture

Abstract

This paper develops a conceptual framework to analyze the problem of public service accountability in developing countries and to identify alternative ways to strengthen it. An important proposition derived from this framework is that effective public accountability can be sustained only when government's"hierarchical control"over public service providers is reinforced by the public's willingness and ability to"exit"(find alternative sources of supply) or to"voice"(exert pressure on the providers to perform). The design of effective accountability systems in developing countries should be of interest both to their governments and to international agencies that finance the infrastructure of public services (e.g., transport, water, electricity, health and education). The theoretical framework presented in the paper shows that in general, the use of exit and voice by the public will depend on their relative costs and on the expected returns to the public from their use in the context of specific public services. The costs and returns associated with exit and voice will in turn be influenced by the degree of market failure underlying the services in question.

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