Bryan Caplan explains. For my money, these are the two most important reasons:
3. Government employees take pride in their work. In many parts of government, workers would feel bad about themselves if they fully exploited the system. This is obvious for teachers, most of whom clearly like children. But even most mailmen seem to care about doing a decent job.By the way, Bob Murphy sent me this link as a Christmas present. Thanks Bob: I will find one for you.
4. Government employees care about their co-workers' esteem. Government employees, like most human beings, don't want people around them to hold them in contempt. As a result, a solid core of motivated government employees can use peer pressure to squeeze effort out of their careerist co-workers. Some professors, for example, love teaching - and therefore look down on professors who teach poorly. Fear of this down-looking impels conformist professors to do a better job.