> There is not really an equivalent to going out of business in government, or at least the bar is much higher for it to happen (I.e. violent revolution)

There's absolutely an equivalent, publicly elected officials lose re-election campaigns all the time.

Is a failed government policy generally stopped and corrected by an electoral change in practice? In my experience this almost never happens. Whereas if a company goes under, whatever failed action it was taking just stops happening. Not equivalent IMO.

Agreed. There is very rarely a sober look back on any government policy to see if it actually met the objectives it set out to achieve, and at what cost.