The mechanism is the voice in the case of government, and the exit in the case of private corporations; opinions definitely differ on the effectiveness of either.
Where governments provide critical services, their funding should not be tied to success. That would only ensure more failure, and that's the last thing you want to do to a critical service.
I'm not sure even this claim is warranted, from either side. Each has mechanisms for attempting to ensure the link between funding/performance, but from my perspective it seems like those mechanisms fail as often as they work in both sectors.