It is very effective at scaring people into believing the state has their interests at heart more than their neighbor does, regardless of all the evidence to the contrary.
for xunzi the main tool to run the state is that nebulous word "ritual." roughly this means the government should behave virtuously to inspire civic duty and pride, encourage people to cultivate themselves and behave properly in the context of their personal relationships, and use the tools of civic religion (in his time sacrifical rites, sumptuary laws, military ceremonies) to impress people with majesty rather than instill fear. on the mundane end it should make punishments light, lower taxes, handle natural disasters, and maintain a military that mostly fights defensive or just wars. through this he believes people will mostly act virtuously through a felt sense of obligation to and appreciation for each other, ie social trust and social responsibility
there are legitimate points of criticism though, I think the main ones from a western individualist democratic perspective would be that he considers a hierarchical (albeit strictly meritocratic) social structure to be absolutely essential, and that the confucian social network style behavior regulation may depend inherently on social shame, which tends to be smothering
xunzi's dim view of human nature is superficially similar to hobbes (and both came from similar times of brutal civil war) but while hobbes says "and the people have to agree to give absolute power to a dictator" xunzi says "and the people need a model for how to be better"
any confucian system is necessarily grounded in virtue, so you still have the classic problem of "what if the ruler isn't virtuous." I do think this is fundamentally unsolvable though. at the end of the day no clever government structure can work around the fact that whoever holds the final say is ultimately sovereign. checks and balances evaporate in times of crisis and we've just been lucky most of the presidents so far who got that supreme authority (lincoln and fdr being the most notable) were relatively virtuous
This, I think, is the core assumption of authoritarianism, and, I think, is false.
Yes there are people who behave like this. But it's not the majority, and communities are capable of dealing with them internally without imposing an authority on them.
The one caveat is, obviously, that this only really works in a world without violence. If the bad folks are able to use violence to get what they want, then any community can be threatened by a large enough group of bad folks who are prepared to use violence. This leads, ultimately, to the authoritarian rule of the most competently violent. The state has a monopoly on the use of violence and enforces its rules on its citizens with the threat of violence. The "elevation of the worthy to positions of controlling authority" is a violent act.
But the underlying assumption that people cannot work together unless forced to by an authority, I think is false. I think that people will naturally work together and create harmonious communities if left to their own devices.
I could be an idealistic fool, though.