Is a social democracy with work incentives the best form of government?

Yes. It minimizes the risk of a plutocratic oligarchy - within a so-called democracy, such as is the case in the U.S. at this time. Less wealth is concentrated in the top 1% of the population and more social services are available to the populace at large. A two-party or multi-party system is a must, in any form of democracy, a social democracy included. Unfortunately, all forms of government are at risk of being corrupted. This will probably always be the case.