When you mean incentives - do you mean the threat of starvation or the promise of a glittering palace?
Perhaps the disconnect between effort and outcome was a factor, though as discussed above don't under estimate the satisfaction of a job well done.
I think it's more likely to be the centralized decision making, and how the people who make those decisions get chosen. A centralized system where people are choosen based on political ability/connections is likely to lead to corruption and mediocrity.
Note the above problem can happen in other systems as well - I'm not sure US politics is operating well at the moment for example.
