> there are abundant opportunities for improvement and cost saving if there is a stakeholder that actually cares about cost savings.
This fails to explain why private corporations (which presumably have from one to millions of stakeholders that care about cost saving) would waste millions of dollars. The idea that "for profit" organizations have some builtin magic trick that means that they improve and save money in ways that other sorts of organizations cannot is just demonstrably untrue.
What is true, of course, is that no matter what the type of organization, if there are people who care about and are empowered to meaningfully tackle waste and inefficiency, then things can improve. And this happens, both in government and non-governmental organizations. You don't hear about it much, for broadly the same reason you don't hear about for-profit organizations wasting money: it just isn't news.
The second assumption that I think you're making is that "wasteful outcomes" are by definition a bad thing. The problem is that government often is tasked with tackling problems where wasteful outcomes are a more or less builtin part of the way things get done, and we accept that (sometimes) because the full cost (not just financial cost) of trying to reduce waste is higher than the waste itself. A typical example: yes, there's no doubt that some government benefits go to people who are not eligible for them. However, the task of identifying all those people has many costs, both direct and indirect. The whole system becomes massively more invasive of everyone's lives when one of its prime directives is "make sure that not one cent goes to some not entitled to it". So most societies accept that there will be a level of waste, which is made up for by the benefits of treating things as if they are closer to a universal benefit.
There are plenty of other examples of this in different domains where the government operates.
