size of government and the competence of government

[Jimbean]

Sometimes the government is inefficient but that's likely the best we can get to obtain a "performing" infrastructure without a lot of waste.

How can a process of market tatonnement be efficiently conducted in the case of, say, interstate highways? Companies will build 5 parallel highways and then 3 of them will close down?

You are referring to cases of market failures. Most cases of this can be dealt with by state (providential) or local government.

[FDG]

You are referring to cases of market failures. Most cases of this can be dealt with by state (providential) or local government.

Yes, I am. You will rarely find support for government intervention except in the case of market failures. But market failures are subject of debate: some people argue that having private motorways is indeed no market failure because (for example) cars pollute, consume resources, etc.
Others argue that private schools would be a market failure because an extensive education leads to better overall social and economic outcomes, and so on. So you can't just say "you are referring to market failures" to close the case.