Government orgs have public financial transparency that businesses don't. For example, when I worked for a public university, my salary was available on a publicly accessible website. Government budgets get a lot more outside scrutiny and pressure to avoid waste.
It's not perfect. There's plenty of wasteful spending, but I wouldn't be surprised if research showed government and large businesses are similarly wasteful.
Yup, but that is to mitigate the large scale incentive issues - it doesn’t remove them correct?
You generally don’t see corporations doing - or having to do - those things because their incentive structures are different. For gov’t, Society (as an outside party) has to explicitly apply pressure to stop it from getting out of control.
For a big corp, when they waste money, that is money that the organization itself has incentives to not waste - their problem is more at that scale, it’s hard to ‘know’ what is a waste and what isn’t, and to untangle owner/agent issues. Especially when the owner is ‘the public’ via public markets.
But there is still pressure, in the form of stock price, etc. so a company which hasn’t managed to get and hold onto a monopoly is going to be applying pressure to itself regardless. Hence, for example, the large scale layoffs going on in the US. Even if the company can’t tell what is critical and what isn’t, they still need to satisfy shareholders and cut.
Also, the gov’t has a large scale, legally enforced monopoly.