As you've described, what is going on is corruption due to lack of oversight.
Take crane operations for instance. An organization may require union crane operators as a means of oversight to help guarantee trained and certified operators for a hazardous operation. However, this often has unintended consequences as union crane operations may also require positions like a crane oiler, which are largely obsolete in modern equipment.
I don't think that constitutes corruption because it's completely transparent and above board, even if unwise.
These problems seem complex and may truly be, but if they lead to payment for nonperformance then that needs to be addressed. I expect the market can figure it out from there.
Even while I have libertarian leanings, I would be hesitant to "expect the market can figure it out" largely because of asymmetries of information and the tendencies of present bias in making decisions, especially those with a profit incentive.