**_With respect to water supplies in urban areas, the citizen scorecard survey suggested that there is still a scope for further increases in water tariffs, particularly for higher volumes of water consumption in households, which may reduce the need for additional government funding_** .  Provincial government may need to strengthen their regulatory and enforcement role in relation to the performance of utilities, and continue adjusting the levels and structure of tariffs within the over-arching policy of full cost recovery and equity, safeguarding the interests of the poor.

**_Building on the performance evaluation initiatives underway at the sub-national levels, citizen scorecards could become a useful tool to gather citizens’ feedback regarding the access to, cost/fees and quality of public services, and to help assess the performance of both sub-national governments and service providers_** .  For instance, citizen scorecard surveys could assist the government to evaluate service providers particularly on items that are difficult to monitor through administrative channels, including equity and fairness in access to essential services.

**_Comprehensive performance evaluation could in turn become a powerful basis for strengthening the accountability relationships across government levels, agencies and service providers and for addressing citizens’ concerns_** .  The emphasis on accountability for performance, including outputs and outcomes, would also allow for greater management autonomy at the level of sub-national governments and service providers.  Appropriate performance indicators and targets, and effective monitoring and evaluation mechanisms need to be developed, building on the existing reform initiatives.   In order to minimize conflicts of interest, it will be important to make the performance evaluation system relatively independent from the influence of agencies responsible for policy implementation.

Stronger accountability of sub-national governments along with an adequate division of responsibilities and resources across government levels would both encourage and enable the responsible government levels and agencies to facilitate adequacy, equity and efficiency in the allocation of public resources to essential public services in line with national policies.

Greater accountability at the sub-national level would also encourage sub-national governments to better monitor the performance of service providers and continue reforming the provider payment mechanisms so as to boost equity, cost control and quality in public service delivery. In this context, it would be very beneficial to continue and scale up the recent successful innovations that have been implemented at the municipal level.<sup>27</sup> In monitoring service providers, it will be crucial to make inspections effective in all areas of public services and public safety, and publicly disclose the results of inspections so as to

> (Chinese) [Vol 1, 2008], and Zhang (2006), Senior High School Education and Laborforce Development, in _Shanghai Education Journal_ (Chinese)[Vol. 6, 2007].

> 27 There are many such initiatives underway across localities in China.  In education, for instance, Shanghai-Xuhui Education Bureau regularly evaluates students’ competency, teachers’ ethics, and the schools’ cost- effectiveness, enforcing zero tolerance for teachers’ misbehavior and campus crime. Beijing-Tongzhou Education Bureau monitors the performances of schools and requires the schools to evaluate teachers’ performances according to their results, including students’ competency and own involvement in research and innovation.  In both locations, the evaluation system is complemented by financial incentives through budget allocations and penalties.

45