Allocation of capital is terribly suboptimal in a badly managed state without good checks and balances.

Consider USA where there is a mismanagement problem with healthcare -- onerous regulations, rent-seeking, gatekeepers, state capitalism, crony capitalism, corrupt bureaucracies, anti-trust issues, and insufficient investment in training and development.

If healthcare is unnecessarily expensive by 10% -- then that's 2% of the American economy misallocated. Also, the lost human potential because of worse healthcare outcomes is another drain.

Now imagine if that was par for the course everywhere you look.