Albert O. Hirschman

The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix

I. Gratification over advances of others: the tunnel effect introduced, 545. — II. Some evidence, 548. — III. Consequences for integration and revolution, 550. — IV. From gratification to indignation, 552. — V. The tunnel effect: social, historical, cultural, and institutional determinants of its strength, 553. — VI. An alternative reaction: apprehension over advances of others, 559. — VII. Concluding remarks, 560. — Mathematical appendix, 562.

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 Rousseaus 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.”

The Search for Paradigms as a Hindrance to Understanding

In a recent issue of this journal, Oran Young argued forcefully against the ‘collection of empirical materials as an end in itself and without sufficient theoretical analysis to determine appropriate criteria of selection.” The present paper issues a complementary critique of the opposite failing. Its target is the tendency toward compulsive and mindless theorizing—a disease at least as prevalent and debilitating, so it seems to me, as the one described by Oran Young.

Against Parsimony: Three Easy Ways of Complicating some Categories of Economic Discourse

Economics as a science of human behavior has been grounded in a remarkably parsimonious postulate: that of the self-interested, isolated individual who chooses freely and rationally between alternative courses of action after computing their prospective costs and benefits. In recent decades, a group of economists has shown considerable industry and ingenuity in applying this way of interpreting the social world to a series of ostensibly noneconomic phenomena, from crime to the family, and from collective action to democracy. The “economic†or “rational-actor†approach has yielded some important insights, but its onward sweep has also revealed some of its intrinsic weaknesses. As a result, it has become possible to mount a critique which, ironically, can be carried all the way back to the heartland of the would-be conquering discipline. That the economic approach presents us with too simpleminded an account of even such fundamental economic processes as consumption and production is the basic thesis of the present paper.

Exit, voice, and loyalty: Further reflections and a survey of recent contributions:

My book Exit, voice, and loyalty: Responses to decline in firms, orgalli=ations, and states was published in 1970 1. Reactions to it and applications of its concepts have been fairly numerous and I have myself had quite a few afterthoughts. It will therefore be difficult to bring these matters together in a passably structured paper. In the following, I shall limit myself to four broad areas of inquiry which have been so arranged that my own further reflections figure rather prominently though by no means exclusively in the first two sections while the latter two are more heavily weighted with reports and comments on the research and contributions of others.

Policymaking and policy analysis in Latin America—A return journey

This paper reviews and updates the conceptual approaches of the authors Journeys Towards Progress (1963). It focuses first on distinctions explaining differences in the path of policymaking and in its effectiveness. Distinctions are made between pressing and autonomously chosen policy problems, between privileged problems and neglected ones that must manage to “ride the coattails” of the former to receive attention, and between policy tasks that are tackled with more motivation than understanding and those with the opposite characteristic. Addressing then similarities in experience with policymaking, the paper first comments on fracasomania (the failure complex) and on the incapacity ever to be surprised at both consequences and determinants of under-development. Indirect and unanticipated effects of policies are illustrated through a Colombian example. A Concluding Lament suggests that the watch for side-effects must be unusually wide-angled in todays Latin America.

Exit, Voice, and Loyalty: further reflections and a survey of recent contributions.

Three years after publication of Exit, Voice, and Loyalty: Responses to Decline in firms, Organizations, and States, Professor Hirschman was called upon to extend his consideration of uses of economic modes of reasoning to dissect political phenomena. The exit-voice framework is extended in connection with the search for optimal ways of organizing public services--from the State itself to day care, to the British National Health Service. These little-known further reflections are reprinted as a service to the increasing number of students of exit-voice themes in health services.

Melding the public and private spheres: Taking commmensality seriously.

Abstract Tibor Scitovskys The Joyless Economy distinguished the pleasure of moving from discomfort to comfort and the pleasure of replacing boredom with stimulation. I have argued that there are also pleasures distinctive to participating in public life. A third form of pleasure berlongs to both the private and the public domain: the common meal leads to individual satiation and, as a result of commensality, has important social and public effects. A good example is the banquet in ancient Greece, closely connected to the lottery—the basic mechanism of Athenian democracy. But the common meal can also lead to the degradation of human relations and political life.

Economic Policy in Underdeveloped Countries

Little attention appears to have been given by economists and other social scientists to any analysis, systematic or casual, of the behavior of governments of underdeveloped countries as revealed by their economic policy decisions over a period of time. Nevertheless, in view of the considerable role played today by governments in the development process, it is clear that governmental behavior should be subjected to just as close scrutiny as is being given to the motivations and conduct of entrepreneurs.

Industrialization and its manifold discontents: West, East and South

Abstract The principal complaints about recent industrialization patterns that are voiced today in Eastern Europe and Latin America offer an interesting contrast: in Eastern Europe they are about the neglect of consumer goods; in Latin America, to the contrary, there has been much criticism of the failure of industry to advance toward the production of more complex capital goods. These critiques are viewed against the background of earlier concerns about the rise of manufacturing in the West, particularly in England and France at the beginning of industrialization, and in Germany during the late 19th and early 20th centuries.