Have the government produce the socially efficient level of variety. Typical estimates are that government uses twice the inputs to get the same output. Operating way above minimum efficient scale. But these might be less severe, since the government produces the goods itself. Transfer prices when there is only one producer.
Governments tend to use over-simplified statistics to make decisions, and ignore other facts.
Little or no reward for innovation. Little incentive to expand or contract production in response to demand shifts. Superior performance by private sector is embarrassing. Existence of private sector alternatives makes high pricing difficult. The larger the government-owned sector becomes, the fewer alternative suppliers consumers have.