Consolidation or Diversity: Choices in the Structure of Urban Governance: DISCUSSION.

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    • Abstract:
      In the venerable folklore of traditional economics political action in the economic sphere has typically been considered as noxious interference with the totally beneficent market mechanism. The equally venerable opposing point of view castigates the invisible hand as the blind forces of the market, note the clever replacement of economist Adam Smith's metaphor by one that uses a closely related image and instead advocates planning by a political authority that, in turn, is assumed to be totally beneficent. A principal intent of the author's work on exit and voice, was to show that there is a wide range of economic processes for the efficient unfolding of which both individual, economic action and participatory, political action have important constructive roles to play. The novelty of the theory for the economist consists in its stress on voice not as a substitute for the market nor as a restraint on it in a few well defined situations, but as another generally available mechanism that, like the market, has its strengths and weaknesses, its successes and failures. There is also a stress on the possibility of unstable equilibria between exit and voice as one drives out the other and on the lack of once-and-for-all solutions through optimal mixes of exit and voice.