Privatization, decentralization and civic participation are common themes characterizing the changing structure and organization of local governments. Privatization and decentralization are based on the positive power of competition to ensure governmental efficiency and responsiveness to citizen voice.

These trends represent important innovations but they also bring new challenges. Successful decentralization requires administrative and financial capacity and effective citizen participation, but many rural governments lack an adequate revenue base or sufficient professional management capacity. Rural residents have relied more on private markets than government for many services; however, rural areas have also suffered from under development due in part to uneven markets.

As we move into the 21st century, government innovation based on competition may give way to innovations based on cooperation. Cooperation between levels of government and with private sector and civil society actors may offer greater potential for efficiency and equity than competitive markets. However, cooperation will also bring challenges. The governance of cooperative networks will require new mechanisms for accountability and voice. Ensuring equity and participation in these new governance structures will be especially important for rural communities.