It happens at small companies and medium sized companies too. I've seen it as both a contractor and an employee.
Like much common wisdom, the idea that companies are efficient (and specifically more efficient than government) is a myth.
The claim as I've understood it is more that a private company puts control over efficiency more directly into the hands of the people whose money is being wasted.
A government entity is typically nominally accountable to the taxpayer, but that accountability is through so many layers of indirection that it doesn't actually do anything. A privately owned company with a small number of owners will in theory be more responsive to monetary pressures. I think where this breaks down is with ridiculously large publicly traded companies where stock price has more to do with shareholders betting on the irrational behavior of other shareholders than it does with the actual performance of the company.
When the owners of the company make money when the company makes money, it will typically straighten out its inefficiencies. When the owners of the company make money by buying and selling abstract financial instruments, not so much.
Companies are profit driven entities and at the end of the day can look at net profit and see if it's positive or negative. This doesn't guarantee efficiency, but it gives you a pretty simple success metric that you can then work to tie everything else back to. This is a major oversimplification, but government doesn't even have that basic starting framework. Government functions cost money, but generally produce no direct monetary profit that can be measured against their cost. Of course government produces other outcomes, but since those outcomes are not monetary, you run into a units problem if you compare inputs and outputs. You can say how many crimes the FBI solves per million dollars of budget, but there's no easy way to measure a "break even" point where you have a net benefit. You can measure relative efficiency (solving more crimes for a given budget), but you can't say what the right target value is.
Even if you could measure government efficiency the same way, the other issue is that companies can improve their efficiency by just stopping inefficient activities to focus on the efficient ones, while government agencies generally do not have that choice. The FBI could probably increase their efficiency by ignoring hard to solve crimes and focusing exclusively on the easy to solve ones, but that's probably not the right thing to incentivize.
There are natural monopolies that exist, road building, water, sewer, power. All these things shouldn't be controlled by private entities.
Inefficient large companies can also linger on for a long, long time.
I 100% grant that large organizations by their nature are less efficient than small organizations due to lossy communication. And some companies have a minimum size due to the nature of their work, which places inherent limits on their efficiency. But they're still subject to competitive pricing from other, similarly large companies.
HP started the Grand Experiment two decades ago to determine how long it takes to destroy a large company if every decision is either incompetent or malicious, with little assistance from network effects… and the experiment is still running.
I also think this is why government is the most dangerous power structure (they almost never prune anything and they have theoretical claim to 100% of the country's GDP through taxation. It would be better for us all if they were heavily restricted or just figured out how to prune effectively instead of just raising taxes all the time to support inefficient program spending)
Like, there's a king on the top, he has his board of nobility, VP dukes, knight middle managers and the peasants who do all the work and own nothing. Whatever the king and nobility say is law, they're accountable to nobody (except for the pope/national government).
They are democratic, but usually of the weighted variety. Typically, he who owns more shares has greater say – although occasionally you will see other weighting methods. Government is more likely to consider each individual an equal shareholder, although not always.
Corporations likely also benefit here from the owners generally having more care for the organization and a greater desire to see it succeed. If there is something that needs to change they will work to ensure that it gets changed as soon as a problem is identified. Most government shareholders would rather sit back and just hope that things work out.
Plus there is upwards mobility, whereas in typical feudalism there is none, but it is still funny to think about the suspiciously odd similarities.
It is certainly not suspicious. It's all just people being people. It's questionable if it is even similar and not the exact same thing. Government isn't something magical. It's just a particular kind of business.
Yet for some reason you haven't... You must, deep down, be worried that I will end up taking advantage of you?
> Once you get through the matryoshka doll of managerial layers you eventually hit a politician or committee of politicians who also serve their own interests
Of course, the cool thing about government is that you can literally tar and feather anyone who violates the wishes of the owners. That's usually a lot harder to pull off in a private business.
But you need people who care. That is a rare quality when it comes to the owners of government. It's a miracle when someone shows up just to hire the worker, let alone stay in contact with the worker after they have the job.
Consider Google: they’re highly inefficient in many areas producing entire applications which are written off not long after release and failing to capitalize on areas they had substantial edges in (e.g. AI), (arguably their last successful product launch was in the 2000s) with the net result that they employed a ton of people doing things which were not really tied to satisfied customers. This didn’t matter because they had a few business areas where they had massive profits despite not having a government-enforced monopoly which more than made up for those losses. Most of the tech giants have variations on that theme where they have many people who can report absolutely absurd internal inefficiencies but until that’s broken out on a balance sheet it’ll probably never change.
Government is unique in two ways: the first is that it’s more public (which is good, but e.g. you’d be shocked if Comcast was audited at the same level) but the other is that much of that inefficiency is mandated by the same people who complain about it in public. For example, benefits programs are often structured to require expensive validation processes which cost more than the savings, and there’s intense pressure to contract everything out even though that process requires significant overhead.
this is far too often the case -- i.e., they are the only business providing X in Y region; or while technically not a monopoly their market share is so large it takes a very long time to be displaced (i.e., Google)
Government on the other hand, has no such feedback loops and misaligned incentives which produce enormous fraud, waste, and abuse. There is no example of government being more efficient at any activity. Pick one, and there is a counter example in private industry doing it better for less.
There is a book - Recoding America - that gives a behind-the-scenes look into government IT and the more recent changes that improve efficiencies and outcomes. It was published in the last 2 or 3 years and your local library almost certainly has a copy.
FYI - the first chapter or two seem to imply developers are to blame for things that are truly the fault of leadership; power through that section and the rest of the book shows developers in a different light: perhaps she was setting up a strawman to make the change look even better.
So Many times it's due to having never dealt with the problem themselves, but not always.