This one's for you, Len. Been thinking about your notions. I know you have the perception that gubmint cannot be efficient, because the incentive system is not there. You are more confident of private industry, because the reward/punishment mechanism is in place there, or can be. Your faith in those motivators is sufficiently great that you believe private business' inherent inefficiency, the need to siphon off profits to owners who produce nothing besides capital, is more than overcome by this motivation system. I've always respected your thinking. Misguided though it is at times.
As a compensation analyst, or at least a fellow who has focused on that sort of stuff since before my teenager was born.....I'd point out that fear is generally considered a bad motivator at best, and very possibly a demotivator. I'd point out that the industry ("management," human resource management, organizational behavior, psychology, etc) believes pay to be a thin motivator as well. When pay is above subsistence level, several other "working conditions" variables become more important to workers.
So, I'm just trying to help you, Len. You see, if an organization hopes to provide poor working conditions (oppressive policies and supervision, for example) and make it up with attractive pay packages, it will lose that gamble. Conversely, another organization with exciting and validating atmosphere, but lagging pay, will often be a sought-after employer.
So you see, this is why I have pointed out that gibmint workers often have the EXTREME advantage of pursuing some sort of regulation they can treat almost like a religion. Protecting working men and women has been my jones, and probably always will be. I routinely work 12+ hours per day, and get paid for no more than eight. You can't get me away from my job, it is so satisfying.
So, I still think gubmint workers can kick ass. And for some very good, verifiable, motivation-related reasons.