Originally Posted by snowjeeper
The difference is that the private sector can easily charge more money to make up for their inefficiencies.
This is true and is reflected by a decline in consumer and employee benefits over the past 30 years. As new costs have arisen, they have been mitigated in some way or another by shoving the cost on consumers/employees. Cutting profit for the sake of efficiency is only ever a very unpopular last resort.
You can argue that because the private sector is profit driven, they do have a high efficiency rate just for the sake of making more money, (if you can make more money by running a tight ship, you will do it).
If you could make governmental agencies run on a system of non-critical incentives, they would probably be more likely to have higher efficiency rates. Incentives often corrupt institutions though, so it's a bit of a quandary.