Competitive Governance markets ยท governance

I've been thinking about competitive governance, trying to dissect what, exactly, its desirable properties might be, and how to achive them. It strikes me that there are two separate desriable properties that governments have under competition, which, for lack of a better word, I'll call incentives and constraints.

Good incentives encourage governments to do useful things. Whereas constraints prevent them from doing harmful things, or cause governments to cease to exist if the do harmful things, or at least limit the harm that they can do.