What makes bureaucracy inefficient and ineffective?

The primary goal is to spend money.

Parkinson's Law states that all money allocated and all time given to complete a task, will be spent. An example of this is when a University is making cuts and the different departments ask for more money than they really need. If they ask for less, they'll get less. You always get less than what you ask for so ask for more or your budget will get cut and leave you with too little money.

The Peter Principle suggests that people are promoted to their utmost level of incompetence. If someone does their job well, they will get promoted. They get promoted until they stop doing their job as well as they had before. This avoids corruption because no one gets demoted and people who aren't as qualified will not get the job just because they know someone high in the ranks of the corporation.