I disagree that governments necessarily must be inefficient, but yes this is an area with some nuance. I could see myself being in favor of an incentivized tax structure for OZs, along with a highly redistributional tax system for income, wealth and equity, but I don’t think too many of the people who argue for the power of markets to incentivize investment of OZs are also in favor of the redistibutional part ;)
Do you have much exposure to how government operates?
Where money is being thrown around by government, in general, there are laws in place to make sure that money doesn't flow into the bureaucrats pockets somehow. But to do that, they add layers and layers of checks and processes. The side effect is that they're not very fast.
And then there's the issue of not having attracted the hungriest talent on average, due to not offering very good salaries, because of the whole avoiding looking corrupt thing.
And then there's the whole personal motivation of private investors to profit, whereas government investors have no such motivation (if they're not corrupt). So there's just no very good motivation to do a great job.
There's a whole slew of reasons they don't make very good investors relative to private investors.
Not saying that private investors are perfect, they're obviously not, and of course there are going to be outliers. And some portions of government funding work pretty well (I think the NSF's model of getting scientist review panels is a great one).
Inconsequential compared to how much the US Government spends in a single day, and how much of that is wasteful. We can fund a new Juciero every day and not notice.
