Experimental evidence on effectiveness of exit, voice, and their combination on public water infrastructure improvement

Abstract:

What is the anatomy of social feedbacks for recuperating declining infrastructure service quality that can affect long-term infrastructure state and thus community resilience? We conducted a behavioral experiment to better understand key mechanisms that shape infrastructure users-agency interactions surrounding infrastructure quality in the context of public irrigation service. Specifically, it has been posited that two key mechanisms exist for dissatisfied users to deal with declining infrastructure quality: exit and voice. The exit option represents a user’s shift to an alternative service (e.g., private well). Exit to a new provider may lead to the existing provider to improve infrastructure quality because it would want to prevent further loss of users or want to win back old users in order to recover the loss in revenue. The voice option represents a direct effort (e.g., petition, complaint) of a user to correct an existing provider. Asserting voice to a poorly performing provider may also lead to improved quality because it would want to avoid the costs of dealing with users’ discontent. However, relative effectiveness of exit, voice, and their combination on water infrastructure quality remains poorly understood. Thus, we tested four basic experimental treatments and compared a providers’ investments into infrastructure: no options to users, only exit, only voice, and both options. In addition, we tested two additional experimental treatments to test effects of an ecological context on the exit option, i.e., rivalry in consumption often associated with common-pool resources (how one person’s use of an alternative water source reduces what is available to others who also exit). Our results show that the use of voice option leads to better infrastructure quality compared to other choices that include the exit option, implying that contrary to previously thought, the exit option can be detrimental to users-agency interactions for a public service.