It's a question of feedback; in fact, I'd call myself a feedbackist if anybody would have a clue what I meant. The governing structure is generally competent to the extent that it can react to feedback, both positive and especially negative, and adapt its course to that feedback.
Big government is slow to react to feedback. It is sluggish, it is structurally not generally rewarded for reacting to feedback (itself a critical form of feedback), and in the case of something like the US, the government has damn near been able to legislate the negative feedback away because it was so unbelievably large and powerful. Consequently, it is low on competence. (On the flip side, a democracy works better than most systems because it has more feedback than most other governing systems.)
Most importantly of all, the "death penalty" is hard to apply to a government, which really bounds the degree of negative feedback it can receive.
A large company can look like that, too, except that the corporate death penalty (total liquidating bankruptcy) actually still can be applied, bounding the ability of the company to fail. (Barring government intervention.) On the other hand, it is possible to run even a very large company in such a way that it is always reacting to feedback and staying on top of things. It's a delicate operation, but it can be done.
Additionally, from the consumer side, as long as no monopoly has formed, you can choose a new company with very low friction, providing further feedback to the companies in question. Choosing a new government ranges from "very hard" to "impossible", especially on an instantaneous basis.
I think there are fundamental differences between government and even very large businesses, because as I like to say, a large enough quantitative change is a qualitative change. But it is true that it is all on a continuum and large enough companies can be in a failure state for a long time before it all catches up to them.
But yes, absolutely, companies can be abusive failures too. One of the critical platforms of my "little-l" libertarianism is that monopoly-busting is a valid act of government, and the primary reason is that having a monopoly is one of the easiest ways for a company to break the feedback loop, by preventing its customers from being able to offer negative feedback to the company by leaving. Since this equally applies to the federal government, I'm a proponent for "State's Rights" and spinning as much power as possible to as small a jurisdiction as possible, because they can react to feedback more quickly, where the largest organization in the world (the Federal Government) just can't.
I've left feedback ill-defined, as I've never completely worked it out yet, but one thing I'd point out is that I don't mean walking up and telling someone they are doing a bad job, I mean like "taking your business elsewhere" or "suing them", that is, actual consequences of import, not just words.
(Also, in my first paragraph, I highlight the word "competent". I did not say "good"; a well-run capitalist company or well-run government can competently execute very evil or bad things if organized properly. Stopping that is an entirely different topic.)
(One of many valid ways of looking at our current financial problems is the way the Fed has continuously chosen to not react to the feedback that our entitlement programs are not sustainable. The reason we are all sitting here looking depressed is that we all know for a fact that it will continue to push back dealing with the negative feedback of the entitlement programs, and indeed, as wonderful as full health care or capping our pollution may be, it's only whistling into the dark about the real source of the negative feedback (in a nutshell appropriate to this post, too much spending) and actually reacting in the wrong direction. We all know it will continue to put off dealing with the inevitable for as long as possible, and we may yet discover that this form of government just isn't feasible because it's too easy for it to just keep deferring negative feedback until it's no longer possible to survive it all. Only the Federal Government, with its capability to literally print money, has even the theoretical potential to get in this deep. Even state governments the size of medium-sized countries have to deal with the negative feedback head-on; for all the trouble California is having, it is at least having to deal with the issues whether it likes it or not. Our Federal government, since it doesn't like it, isn't, and for creating this feedback-immune monstrosity, we shall all pay. And once you start looking at it like this, you see just how many of the solutions being proposed address the root problem: 0.
Another angle is to notice that all these commitments that are killing us are all expressed in feedback-proof form; WE WILL spend X.Y Billion on Z. We do not stop to ask if we even have X.Y Billion, or if conditions have changed, or if the desirability of Z has changed, or the feasibility of Z has changed. WE WILL provide XYZ health coverage when you retire in 25 years, regardless of the contents of the intervening 25 years. If you can see why you could never build a concurrent program on a primitive like that, you can begin to see why there's no chance in hell to build a sane government spending program on such a primitive either. It's all "bang-and-pray" control.)