First: One of the basic human drives is to be the Boss. It’s the result of evolution working on the fact that human beings are relatively weak compared to animals, and can accomplish more in groups than as individuals or even the sum of individual efforts. Operating in groups requires coordination, so that the individuals in the group are aligned with the group’s goal. We call that coordination “leadership” or “management”. The group’s leader is quite properly regarded as having created the extra value resulting from group effort over that of the sum of individual contributions without leadership, and is rewarded for that contribution by an increment of wealth, including availability for sex.
However, there’s little or nothing there for evolution to work on as regards individuals. Group organization has evolved over time, and one of those factors is that groups are somewhat better able to select leaders which will make them successful, but the leader has more opportunities to reproduce than the members regardless of whether the group is ultimately successful or not. That means there’s a weak correlation (if any) between ability to manage or lead and desire for a leadership position.
Government, once in place, provides an ample set of positions carrying with them the trappings of leadership, including the ability to boss people around. However, Government is, and has always been, arranged so that its Chief is the one carrying the can for failures. Individuals below the Supreme Leader can always blame Teh Leader for failures, so they are not selected against for management or leadership failure. The drive to be Boss exists, like every other human attribute, in a distribution, with some feeling it strongly and some weakly if at all; Government therefore disproportionately attracts those with a strong drive to be important (“fire in the belly”, in the memorable phrase) but does not negatively select for inability to do something effective with the leadership position once it’s gained.
It’s another corollary of the principle behind Gresham’s Law and the Peter Principle. Government, over time, becomes populated with individuals with a strong drive to be Boss but little or no ability to perform the duties of Boss. It might almost be a definition of Government that it is composed of people who would stop at nothing to become Boss, but have a feeble or no ability to manage or lead. It should not be surprising that the result is expensive and ineffective.
Second: Note that the activities promoted or supported by Government tend to be things that the society doesn’t need or want, or doesn’t any more. Rail transportation sits somewhere near the top of that list, and may serve as an exemplar. Rail transportation is somewhat more efficient in terms of resources expended than individually-directed vehicles — but the latter are enormously more flexible, both in terms of where the source and destination of goods might be and in the ability to expand or contract the system according to the need for transportation. Society therefore cheerfully pays a relatively small penalty in efficiency to gain an enormous increment in flexibility.
One of the aspects of leadership ability is time-binding, the ability to recognize change and adapt to it. Since the individuals populating Government are ineffective leaders, they will fail to recognize social change and attempt to preserve the existing system. They are therefore eager to subsidize things the society no longer wants or needs, or no longer wants or needs to the degree they exist, and that’s always expensive because it involves shifting resources by fiat from the capability society wants to the legacy capability being preserved; in this case, society wants flexibility at the expense of efficiency, but Government tries to preserve rail at enormous expense. As more and more societal changes occur, and the feeble “leaders” in Government try harder and harder to stifle them rather than get out in front of what society wants, the things sponsored by Government become more and more expensive — and other things perforce become less expensive, because Government is siphoning off resources that would otherwise be used to support them, and if they are to exist at all they must do so on fewer resources.
The problem is made more acute when there is an idealistic or ideological basis for the things that work less well than what society develops on its own. Individuals in Government then have not only their innate tendencies, but a strong motive to declare that the Old Ways are Good For You and the new ones are Bad. Those individuals who do have leadership ability will then exert themselves to see that the population is compelled to do what’s Good For Them, and that transfers more and more resources to Government, leaving non-Governmental activities even more parched for resources. It is thus inevitable that Government becomes more and more expensive, while non-Government activities become cheaper or fail to exist at all.