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This basically describes the business end of the company I work for.
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The main Parkinson's law is the adage which states that "work expands so as to fill the time available for its completion".

That is why we should not have a Mega state.It's just a bunch of state paid administrative people inventing new work for themselves and new rules for us.

If we are unlucky this Mega state will put new rules from corporate lobbying groups which is not in the general interest of the public/voters.

...except life is rarely that simple. For example, nearly all countries where the state delivers healthcare centrally have far lower costs than countries such as the US, where healthcare is delivered privately. This seems to fly in the face of your thesis.
Parkinson was an optimist.
On a related note, Poul-Henning Kamp's 1999 "bikeshed" e-mail to the FreeBSD list (with his take on Parkinson's Law) is still a good read: http://bikeshed.com/
My favourite bit, which I had not seen before today, is on the 'duck technique'. From Wikipedia:

The duck technique in corporate programming is an applied example of Parkinson's law of triviality: a programmer expects their corporate office to insist on a change to something (anything at all) on every presentation to show that they're participating, so a programmer adds an element they expect corporate to remove on purpose. Quoted from Jeff Atwood's blog, Coding Horror:[1]

This started as a piece of corporate lore at Interplay Entertainment. It was well known that producers (a game industry position roughly equivalent to project manager) had to make a change to everything that was done. The assumption was that subconsciously they felt that if they didn't, they weren't adding value.

The artist working on the queen animations for Battle Chess was aware of this tendency, and came up with an innovative solution. He did the animations for the queen the way that he felt would be best, with one addition: he gave the queen a pet duck. He animated this duck through all of the queen's animations, had it flapping around the corners. He also took great care to make sure that it never overlapped the "actual" animation.

Eventually, it came time for the producer to review the animation set for the queen. The producer sat down and watched all of the animations. When they were done, he turned to the artist and said, "That looks great. Just one thing: get rid of the duck."

[1] http://www.codinghorror.com/blog/2012/07/new-programming-jar...

Consulting for large organizations, this is a huge aspect of successfully managing your relationship with your clients. The duck technique can work, but moving fast enough to prevent your client from finding trivial things to argue about is probably a more honest and efficient way to go at it.
Corollary: "Why the Secretary of any organisation is the most powerful person there."

Think about it. Who sets the agenda? Who prioritises/orders the agenda? Who writes the minutes?

I've seen this in action at some large telecom companies. Beat the smallest issues to death, and never get to the bigger ones. I assumed that this was a way to avoid the bigger issues, as opposed to fixating on that which is easier understood. I think I was wrong. :-)
I just watched Charlie Wilson's War last night in memory of Philip Seymour Hoffman. Charlie Wilson and Gust Avrakotos convinced Congress to authorize $500 million to arm the mujahadeen. Rep. Wilson couldn't get his subcommittee with an unlimited budget to authorize $1 million for school reconstruction after the Soviets left. Seems like a pretty good example.