Top down decision making, typically by non-technical people who often have no idea what software development even involves.
Eventually things get so bad that there's no choice but to abandon feature work to fix them.
The business loses out multiple times. Feature work slows down as developers are forced to waste time finding workarounds for debt and bugs. The improvements/fixes take more time than they would have due to layers of crap being piled on top, and the event that forces a clean up generally has financial or reputational consequence.
Collaborative decision making is the only way around this. Most engineers understand that improvements must be balanced with feature work.
I find it very strange that the industry operates in the way it does. Where the people with the most knowledge of the requirements and repercussions are so often stripped of any decision making power.