I don't follow you. How is providing fire brigade services any different from providing health care? Or providing a functional justice system different from providing health care? They all provide concrete but hard-to-quantify value to the society around them, and aim to serve the public good.
As further examples of state level institutions we could also look at coast guard and customs service. And, of course, the tax officials (what ever their local name happens to be in various countries).
A modern nation state is full of public institutions with dedicated personnel to carry the institutions mission.
Public institutions work just fine around the world in various countries, performing a multitude of missions. That's not to say they are immune to various pathologies, but that applies to all organizations, public, private, for-profit or non-profit. Public institutions work fine when they are fulfilling a legally defined obligation under a democratically chosen government.
The thing everyone wants to avoid is pathological cronyism. The key to this is to make sure the political power pool has churn - so there is no predictable kingpin with executive power around whom the power and corruption accumulates. Which, democratically chosen governments provide (with varying capacity, but even two parties is probably enough).
I agree, no one wants to funnel tax payer money just to amass state power. But some things that improve life really cannot in any obvious way be guided by profit mechanism, and some things are just too capital intensive to be able to do on a small scale. The obvious place to look for capital for large scale projects that add value to the general public is the state.
Note: although monarchs do exist as mostly figure heads, modern monarch seldom have executive power. Compare this to some countries with dictators or monarch with actual executive power.
