Question

An advantage of decentralized government is that

a) the existence of many governments offers more opportunities for innovation.

b) public goods are produced at lower cost.

c) horizontal equity is more likely to be achieved.

d) competition among local governments always improves efficiency.

Answer 1

Decentralization is the transfer of authority and responsibility for public functions from the central government to local level governments. Decentralization also increases the level of citizen participation in making major
decisions. A decentralization of government induce competition among local governments, thereby increasing efficiency. Hence, an advantage of decentralized government is that competition among local governments always improves efficiency. Hence, the answer is d.