[HPsquared]

The existence of all these protections against cronyism in the public sector is evidence that it is an inherent problem. If it wasn't, there would be no need for all the protections.

Edit: the problem is kind of moral hazard. Much like a chemical plant or nuclear reactor needs a range of protection systems to prevent the dangerous chemicals from going out of control, public administration needs a range of systems to prevent corruption getting too out of hand.

[pmyteh]

Yes indeed (and, even more so, the culture of non-corruption which reformers tried to put in place at the same time). But, like in the chemical plant, it is possible to run a government with minimal levels of corruption and many (better-governed) countries do it.

It's not just a public admin problem, either - corruption and self-dealing are potentially endemic in the private sector, too. The concern has traditionally been higher for the public sector, both because of the potential for abuse of state power and because it is/was seen to be corrosive to public trust and self-government. A private company is more likely to trade off the cost of controls versus the dollar value of the future loss (or the controller is the one running the firm strictly for their own benefit, in which case they're likely to get away with it without intervention by the legal system). And the largest companies have had actual public power greater than the smallest countries for centuries by this point, so the two concerns are not completely disjoint.