Middlemen: it creates comfortable middle-class jobs for the mediocre children of the powerful. There's an intense demand for a) university education and b) jobs for people with university education to do, and governments start getting much less popular if downward mobility becomes prevalent enough to be noticed. The more managers, agencies, and consultants you can support per useful worker, the more people have a stake in your regime persisting.

So you increase the amount of regulation per employee to the point where it makes economic sense for organisations to outsource it. And then you've created a lobby for doubling down on this.