Highlights of the CInSt research seminar with Leonid Polishchuk

Leonid Polishchuk presented his research "Voice, Exit, and Co-production: Political Economy of Citizen Engagement" on CInSt research seminar on December 5th

Relation between government and society matters. When do we expect substitution or complementarity of public and private efforts in public goods provision?

• When government is properly accountable to society, it efficiently carries out its functions, and society fills niches where it has comparative advantages, so that complementarity should be expected 
• When government accountability is low, society picks up where government left off, effectively replacing a non-performing government, and substitution is likely.

Co-production enhances social welfare, when accountability of government to the society is either very low, in which case communities supplant non-performing governments, or high, in which case communities complement well-functioning governments, and make governments work even better. 

In the interim range of government accountability, communities substitute for underperforming governments, and net social payoff to such efforts is negative. 

Government-substituting co-production is a form of society’s collective exit from the agency relation with government. It is detrimental to social welfare, as it enables government to free-ride on communities and to further reduce its own provision of pubic goods and services with political impunity. 

Civil society can improve social welfare through voice, increasing government accountability or through exiting into co-production, increasing community contribution.

Both options require collective action, and hence social capital, although of possibly different stripes – grassroots social capital, required for co-production, and civic culture, which is required to hold government properly accountable