Brexit, March, and Logics of Decision Making

Albert Hirschman proposed a theory that guides how members of a group react to change. When members are dissatisfied with an organization to which they belong, they have the option of either leaving or voicing their concerns in order for changes to be made. Exiting is determined by the organization and the members’ relationship with the organization. When the option of leaving is fairly simple, members are less inclined to express their concerns. According to Hirschman, the two choices are tangentially related.

James March has strong feelings about the logic of appropriateness. March (1994) asserts that actors in decision-making processes are influenced by such identities as social expectations as opposed to rational choices. March’s decision-making process states that the decision making actors follow certain rules that are governed by other identities. The identities, in this case, are determined through processes of socialization or individualization and can lead to a myriad of identities. In this process, according to March, it is possible to encounter the conflicting interests that are not bounded by rationality. Such interests are governed by rules.

The decision of the Great Britain to exit the European Union (EU), in terms of Hirschman’s theory, is appealed by options of exit or voice. The exit comes into play when the exiting member feels that airing their voice will be in vain and that they are unable to change the situation of the EU prompting the exit. In March’s opinion, the decision to exit EU is governed by the rules that may not necessarily be rational but appropriate. Exiting EU in March’s terms will be governed by three main issues: situation recognition, role identity, as well as rules.

This paper critically analyses Brexit’s decision-making process through the eyes of Hirschman and March. The paper discusses Hirschman’s exit, voice and loyalty (EVL), and March’s logics of decision making, and applies the two theories in analyzing the decision by the United Kingdom to exit the EU from the perspective of the two theorists. The paper seeks to apply the two theories to Brexit.

Exit, Voice, and Loyalty by Hirschman

In economic terms, exit entails dissatisfaction with a product or a service that consequently instigates reduced demand for the same. There is some underlying value to the exit, which is determined by the relationship between the members opting for the exit and the firm. In the stead of exit, there is the exercise of voice. Voice is two-pronged; that means the member may exercise a voice in order to initiate change or the stakeholders may exercise voice when a member’s exit is looming. The former concept of voice is skewed towards enhancing change whilst the former voice is exercised by stakeholders as a response to the issue causing dissatisfaction. Loyalty, on the other hand, affects both exit and voice by giving more meaning to voice, while trying to decry exit. It is upon the members to check the tradeoffs between the two before making their decisions.

Brexit is a call for the U.K. to exit the EU. In Hirschman’s terms, exit occurs when voice is limited, and change not palpable. In this regard, Britain’s decision for exit insinuates that there is a perception of limited voice and little loyalty. Hirschman’s concept opines that the option of an exit is favored by discontentment about an organization and feelings of the inability to change the organization. The option of an exit can only be repulsed by a conviction that the member’s voice will be heard.

Hirschman states that voice as the desirable alternative to exit. He raises concern to the manner in which loyalty to an organization or a product can be demonstrated by an actor who seems more oriented towards exist. This sentiment seems to fortify the earlier argument that Britain, owing to its option to exit from the EU was and is not in loyal to the organization.

Hirschman’s EVL can be articulated in economic terms, where it is strongly connected to decision making in economic terms. Discontinuation of a relationship with an organization is likened to the demand and supply mechanism of an economic market. In this case, supply and demand are mainly controlled by the exit of the consumers. On the contrary, voice, as an option is connected with an actor or a member’s willingness to mend relationships by use of communication. Voice, according to Hirschman (1970), is more connected to the political realm as it opines to confront a situation rather than escape it. Voice is a factor that has been reminiscent in various societies since the 19th century when more Europeans demanded additional political rights. Loyalty, in EVL, mediates between voice and exit (Hirschman, 1970). The concept of loyalty is likened to the 20th-century allegiance of people with certain communities and the desire of some to identify with specific communities. The components, in the view of Brexit, can, therefore, be deemed to uphold the argument that Britain’s exit is a show of disloyalty to EU. Lele (2016) suggests that, despite the limited voice by Britain to articulate its demand to the EU, its loyalty was mixed. The author notes that Britain has a perceived feeling of the specialty of its people, a factor that, contrarily, invokes skepticism to foreigners, who in this case include other Europeans (Lele, 2016).

There are various reasons that were brought forward, as reasons for Britain’s decision to quit EU. Former British Prime Minister David Cameron is touted to have misjudged the referendum issues and some national policy, henceforth, opening the path for Brexit. In this regard, the proponents of this assertion estimate that Cameron’s actions may have instigated a scenario that may put an end to the very core institutions that have contributed to the pacification of the modern mankind, especially after the Second World War (Lele, 2016). The migration policy is a contributing factor that led to Brexit. Other factors, according to Lele (2016), included high taxes to remit to the EU, bureaucracy, and open borders that would allow excessive immigration. In Hirschman’s notions, EU was not an option. Considering the earlier assertion that Britain felt that it had a lesser voice, the best option, therefore, was to exit.

Notable in Britain’s exit is EU’s democratic clause that allows members to exit. Member states of the European Union are permitted to negotiate transitions, enhanced cooperation, and exits. The EU as an institution incorporating diverse states has demonstrated flexibility and outright democracy that allows the states such as Britain to opt for an exit. In this regard, and in accordance to Kostakopoulou (2016) EU clearly accommodates the tenets of exit, voice, and loyalty. The organization has allowed members to freely exit the organization if they feel that their voice does not produce the effects it desires.

Voice, according to Kostakopoulou (2016), is used to procure change. A member, according to Hirschman, should attempt to change the practices that they are not content as opposed to exiting. A member should endeavor to change the policies, practices, as well as a firm’s outputs instead of choosing to escape from the state of affairs. When voice is not an option, exit takes place. The lack of both calls for loyalty. In EU’s case, there are community interests to be protected that do not leave room for biased interests, as governed by the organization’s plurality. Such confines of the EU, that allows a member to freely exercise their democratic space, govern the better part of this discussion.

The process of founding EU involved diverse oppositions, inter and intra-state crises, negotiations, and compromising on various issues by the member states. With this in mind, it suffices to note that loyalty to membership should not be perceived as silence. Hirschman’s loyalty, however, would have denoted such loyalty as one that supersedes silence and drives voice. Members’ loyalty, notably, encourages discussions to be spearheaded by voice and a commitment to reforms. Brexit was ultimately favored by Article 50 of the Lisbon Treaty that made the decisive transformation between voice and exit (Closa, 2016). The Article allowed voice to be transformed into demands. The exit was made a cheap option which, according to Hirschman, made the contribution of voice to such matters very limited.

Brexit, March, and Logics of Decision Making

March’s logic of appropriateness opposes the rational proposition of decision making. Rational decision making, in the words of March (1994), is constrained by information. The logic of appropriateness is a theory which is based on the need to make decisions based on norms rather than the assessment of the cost-benefit analysis of the situation. The social practices of people govern the decision-making process in such conditions and determine the manner in which choices are made. This is a social theory concept which seeks to ensure that the process of decision making follows an order which is utilized within the society rather than making the assessment of the potential outcome of the action. The theory can play an important role in the process of enhancing institutional order and stability (March, 1994).

The theory evokes the feeling of two self-interest actors in which the factors include the presence of fixed preferences and a choice between alternatives. The application of the theory in situations like Brexit, the decision would be made based on the knowledge, intuition, and experience of the individuals involved. Utilization of these factors in the decision-making process yields a range of alternatives from which a decision has to be made. The referendum situation can be considered one in which a decision is made between available options in which people decide based on past experience on certain issues. The case of Brexit is purely dependent on the experience of the British people under the European Union.

Within the political order, the theory is an important factor that governs the effective functioning of the political society. The theory applies well to democratic political systems in which individuals have the power of choice and make decisions independent of the political and external influence. In such scenarios, individuals make their decisions based on the understanding of the social aspects rather than the understanding of the involved consequences of the choice made. The scenarios are complicated by the decision among entities which only take into account the previous understanding of the situation without the consideration of the future conditions which might emanate from the situation (March, 1994).

The theory makes a consideration of the appropriateness of the situation in which the decision is being made based on the social norms rather than the influence of some external forces. Through applying the logic, the motives and behavior of the people making the decision can be understood. The application of March’s theory is thus subject to the understanding and information held by the people (March, 1994). The appropriateness of the choice becomes an element which is defined by the level of understanding among the decision makers as the theory makes the basic assumption that the external factors have minimal impact on the decision that the individuals make.

The logics of appropriateness within the situation of Brexit can be considered to emanate from the interests, arguments, and the identities of the individuals within the decision-making process. These three factors are considered as the key aspects that govern the decision-making process among the British people while choosing to exit from the European Union. The external factors, which have minimal impact in this situation, seek to enhance the benefits that the larger community seeks to gain from the decision made.

The interests of Britain are governed by the understanding as well as the assumptions of the Britons on what they feel could be good for them. The external factors such as the consequence of the decision that they make do not influence the outcome of the decision that they make. Further to this, the consequences of Brexit, however rational or irrational they may have potentially been, could not influence the choice of exiting the EU organization. These interests are based on their understanding of their expectations as well as the historical background of their nation. It has been noted that a contributing factor, other than the officially noted factors like migration problems, could have been the internal prejudice and self-worthiness of Britain against other nation states. The past condition within the country remains critical in ensuring that such social aspects governing the decision making are considered.

The second logic of arguments makes reference to the discussion taking place that seeks to influence the decision of the people. These discussions ought to influence the knowledge that people have as the level of understanding of the issues varies across the society. Arguments can be presented by both supporters as well as those opposed to the discussion at hand. Information can be gained from the external forces seeking to influence outcomes. The interests seek to present the benefits of each decision as well as the disadvantages presented by the decisions.

The last factor in the logic of appropriateness is the identities of the people involved in the decision-making process. In making the decision, the British people will have to make a consideration of their identity and that of their nation. Due to the need to create an identity a unanimous decision was to be reached by the individuals involved in the making the decision. This aspect of identity remains important to the voters as they seek to determine the choice that they will make. This aspect seems to have largely contributed to Britain’s choice of exit and the reason behind the people’s decision during the referendum.

While the theory presents a manner through which public decision-making process can be analyzed, there is a significant shortfall in the way through which the theory is applied to a political decision like the Brexit case. The theory remains limited to a democratic situation in which a large number of individuals are involved in the process. In a situation where a single individual makes the decision, the theory cannot be applied. The decision makers only considered the past situation and utilized the knowledge they have on the issues and did not anticipate any external influence. The theory makes the basic assumption that external forces do not have the capability to influence the decision made.

Another drawback of the theory, when applied in public decision-making process, is that the individuals commonly associate certain identities to specific situations. Such associations limit the independence of the decision-making process and thus the evaluation of choices through this methodology. The concept of group psychology comes into play in the decision-making process as opined by the logic of appropriateness. Such a factor can be considered limiting, considering that it eliminates the capacity for individuals to make a decision independent of the external influence. While the factors of identity are critical in the successful assessment of the situation, they become a limiting aspect to the free will of the democratic decision-making process as they influence the capabilities for the individuals to make a rational choice (March, 1994).

March’s case on logics of decision making is well explained by Buchanan and O’Connell (2006) in their assertion that the historic decision-making processes have ceased being oriented towards perfect rationalism. Over time, people are increasingly becoming bound with contextual and psychological constraints that limit as well as inhibit the tendency towards optimal choices. The authors state that due to the complexity of circumstances, time limits and the lack of the ability to properly and mentally decipher issues, decision makers are being subjected to bounded rationality (Buchanan & O’Connell, 2006). The authors opine that given time, people can make decisions that are economically rational. In pursuance to this, people are being driven by circumstances into making decisions against their perceived economic interests, even with the proper knowledge. This is a scenario that has been clearly and evidently replicated by Brexit. The common man, who also happens to be the most critical decision maker considering that they make up the majority of the voters in the referendum, did not have the benefit of time to make the rational choice. They were instead subjected to rules that governed their decision making processes.

In essence, Brexit was a decision that did not take in all the available consequences before being made. The decision-making process, in March’s terms, sought favorable conditions as the bedrock as opposed making a cost-benefit analysis. The decision was institutionalized and did not give room for the much-needed logical context. At the same time, after the decision was made by the institutional stakeholders, the same rules were passed to the British citizens, who also voted under similar pressure, with no time benefit to ponder the logic and rationality in their voting patterns.

Conclusion

The exit is evidently becoming an option in many global organizations, Brexit being one of them. This can be attributed to considerable split in global loyalties as suggested by Hirschman. Further, there is increased the lack of rational considerations as options in decision making as opined by March. This trend can be seen in both developed as well as developing nations. It is a trend that has seemingly embraced rescinding to issues as opposed to voice and reforms. For global governance and unions like the EU to be strengthened, voice options need to be strengthened, while at the same time weaken the exit options. Such a move would require increasing the rewards in the articulation of voice, with dwindling incentives for an exit. Rationality in decision making and looking into the consequences of actions before making decisions can also be encouraged. This factor would make the effects of making decisions based on irrational rules weakened in the same regard as options for exit. It would serve to strengthen global institutions and encourage unison and articulation of ideas for reform.

This treatise has analyzed Brexit in terms of Hirschman’s EVL and March’s appropriateness logic. The decision by Britain to exit EU has been seen to perfectly fit into the assertions of the two theorists and can, therefore, be used as a case example of the applicability of the theories in real life. In Hirschman’s term, Brexit did not adhere to voice and opted for the exit. In March’s terms, rationality was bounded. Moreover, the Brexit situation can serve as a good model for a discussion on emerging issues in global governance and institutions.

References

Buchanan, L., & O Connell, A. (2006). A brief history of decision making. Harvard Business Review, 84(1), 32.

Closa, C. (2016). Interpreting Article 50: Exit and voice and… What about loyalty? EUI Working Paper RSCAS 2016, 71. doi: 10.13140/RG.2.2.16112.46087.

Hirschman, A. (1970). Exit, voice and loyalty: Responses to decline in firms organizations and state. Cambridge, MA: Harvard University Press.

Kostakopoulou, D. (2016). Brexit, voice, and loyalty: Reflections on Article 50 TEU. Law Review, 41, 487-489.

Lele, U. (2016). Exit, voice, and loyalty: Lessons from Brexit for global governance. Brookings. Retrieved from https://www.brookings.edu/blog/future-development/2016/07/07/exit- voice-and-loyalty-lessons-from-brexit-for-global-governance/

March, J. (1994). A primer of decision making: How decisions happen. New York: The Free Press.