I don't think it is *necessarily* indicative of bad outcomes but it *can be* for be for some important things. It's a downward pressure on incentive but maybe it could be overcome if the culture was strongly against it. Seems like it would be hard to do though.

Adding force to mix just inverts the problem so that the politically connected are the free riders of the citizens. We don't live in a perfect world though, so we just do what works and try to improve on it.