My guess is that it has to do with low worker motivation, both from lack of individual incentives and organizational inertia. My friends in government jobs know what their promotions will be for the next 30 years and there is no allowance for variability based on personal performance. This prevents nepotism and corruption, but also means that leadership is based on seniority, not competence.
It would be interesting to see how successful governments manage promotion of talent.
My guess is that it has to do with the poor state of democracy in the United States. Local elections are dominated by moneyed special interest groups, many people don't vote in them, and those that do, often vote down the party line.
Result: It's difficult to run government services well, when we do such a poor job of picking good people to run the government.
I agree with your conclusion, but I'm not so confident "moneyed" special interest groups are the issue. I could speculate it has more to do with voter interest priorities in general.
Take California DMV for example. The DMV is led by state governor appointees. No governor will be voted in or out office based on DMV improvement performance. Running government services well hardly ranks in voters minds
It would be interesting to see how successful governments manage promotion of talent.