Me vs the libertarian vice

As the argument goes,

Private actors and markets tend to be dynamic because the actors respond to incentives. Proactive people will be promoted in dynamic companies and those will win market share from companies that stifle creativity and drive creative individuals away.

Government bureaucracies are static; there are no incentives. If they do a job poorly, they still keep their market share and jobs.

It occurs to me to take to heart Tyler's suggestion that the libertarian vice is to think that gov't quality is fixed. I confront the second statement from above, asking whether it is true if we consider what I have said about bureaucrats. Chiefly, are they self-selecting? If so, then they have reason to see a good job done regardless of the benefit to themselves, i.e. in spite of the fact that they have few or no market incentives to do a good job.

It seems that there would be a tradeoff between "work for myself" and "work for my ideals", i.e. some might not be self-selected and some might be sell-outs. What percentage of people are self-selected, and how strong are their ideals? Also, they may over time begin to blur the two, perceiving "that which makes my job easier" as "that which is right".