Some of the "bad outcomes during the process" can cost the company more in legal fees than a multi-year software project. Red tape tends to be concentrated in such areas. For example, exports control and anti-money-laundering regulations. After sitting through trainings on the former, I'm very glad I don't have to deal with traveling or sending physical devices around the world...

Compliance is painful because it’s hard to come up with precise NPVs on “we need to do it to avoid bad outcomes and because of the law.” It’s a shared tax that grows as the company grows, but the benefit is unseen. So compliance becomes a function of the political power of the leaders.