“Central governments around the world are decentralizing fiscal, political, and administrative responsibilities to lower-level governments and to the private sector” (World Bank). Examine how ‘voice’, ‘competition’ along with rules and restraints in decentralisation reforms help improve state efficacy and accountability.

Answer: How to approach the answer-
▪ The focus of the question is decentralisation in Public sector to bring about more
▪ accountability.
▪ The question has to be analysed in 3 aspects – Voice, competition and rules and restraint.
▪ The 3 aspects would have to be linked to decentralisation to get a complete answer
▪ Case studies would help in getting more credits
Model Answer Key:

• Voice
  ▪ Local residents need a greater “voice” in decisions that affect their lives
  ▪ Political rationale of decentralisation is to move decision making closer to people to foster
  ▪ greater democracy
  ▪ greater local involvement in expenditure and taxing decisions will lead to services that better
  ▪ reflect local needs and preferences
• Competition
  ▪ ‘Choice’ and ‘exit’ are keys to effective decentralisation
  ▪ Decentralising service delivery away from government monopolies
  ▪ Alternative service providers including local governments, private sector and NGOs have led
  to
  ▪ higher quality service delivery
  ▪ Alternative options for service delivery also being sought e.g.: – School vouchers in Columbia,
  ▪ Food coupons etc.
• Rules and Restraints
  ▪ Effective decentralization requires an active role for central governments
  ▪ Rules and restraints are needed for:

1. Distribute roles and responsibilities across various levels
2. Encourage fiscal discipline
3. Enable effective service delivery
4. Promote poverty reduction objectives

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