Regarding
That might explain cost disease in the public sector, but I don’t know if it’s sufficient... and what follows, it's worth considering that the US struggles to get the private and public part right, when a strong institution is needed.
When we get more government in the US, we usually don't get a powerful and effective public institution, responsible for delivering a service directly to the people, staffed with dedicated public servants. Instead, we generally get a tangle of regulation and a large private industrial complex.
A major exception to this -- though they are becoming less so -- are the various branches of the military. They overlap with one another and thus come into conflict; but all soldiers are dedicated public servants.
Immediately adjacent to the military is the US arsenal system, or military industrial complex, a web of not-really-competing companies that the DoD tries to manage via complex and demanding contracts.