The article talks about institutional inertia. The advantage of a market economy is your Blockbusters get replaced by Netflix. Imagine if film renting were a public agency. It would be much harder to disrupt. Governments are, by design, immortal. A crucial design decision is choosing what, in our society, we want to be immortal and what we want to be replaceable.
Further governments are often first adapters. Many legacy government IT systems exist, but as they generally work and cost less to maintain than replace. Really the advantage of free markets is information exchange and diminishing returns not simply building large scale systems.
Consider, some cars come with built in refrigerators yet we ended up with roadside stores selling cold beverages. That's the kind of tradeoff markets are great for identifying.
The elected component of any modern government oversees a vast administrative bureaucracy. This is the part people refer to when comparing "big" and "small" governments.
> the main reason for the institutional inertia is the same scale, complexity and principal/agent problems large corporations also suffer from
Federal bureaucracies only die if (a) the legislature explicitly kills it or (b) the government collapses. Large companies, on the other hand, can go bankrupt. Shareholders are motivated to be ruthlessly efficient in a way lawmakers, somewhat by design, are not.
Ruthless efficiency for maximising long run profit is only useful in cases that particular metric happens to align closely with the goal of society. For film distribution this might be a reasonable assumption. For promoting health or learning outcomes or facilitating retirement, it almost certainly usually isn't.
In Western European and North American history, at least, it dramatically is. Look at a list of the Dow or S&P 500's founding components. Look at those lists now. Now look at a list of U.S. departments in 1850, and compare them to today.