That's just organization crime imbedded into a social service. Corruption is never needed but many social services have their place.

Example:

When you are not at home to protect your wife and daughter you might ask a trusted neighbor to keep watch. If they are busy then you might have to pay for protection. If enough people have issues then the community might have to hire someone.

The problem is how do we stop the corruption being imbedded before it becomes your definition of "state?"