Most definitely. If there was some responsible, strong but fair leadership coming from the top, I think that most employees would respond. I believe that there would still be a minority of people who simply wouldn't care and would continue to push for all they could get, but on the whole things would improve dramatically.
We need to cut down on the beauracracy - reduce the number of pen pushers and increase the number of people 'on the ground', get some commonsense and workable policies in place, make employees feel valued, make them feel like they have a voice and that their opinions matter, give them goals to work towards, treat all workers fairly - everyone plays by the same rules, reduce the gap between management and field staff (that whole us and them mentality) and get management to stand behind their employees when warranted.
But also make them responsible - give them reasonable consequences for inappropriate attitudes, help them realise that the government is not an endless pit of money and give them credit for excellent work.
Ideally, the end result would be to increase efficiency, reduce wastage, increase productivity, improve communication, develop strong teamwork and increase employee satisfaction - both job and self.
And I believe that it can be done.