In dysfunctional systems, enforcement against bad behavior doesn’t work. In response, enforcement gets amped up, and then you have to deal with the original badness and collateral damage.
Eg. third world countries tend to be full of crime. They also tend to be full of aggressive, in-your-face police. You might think all the police might do something about all the criminals. That’s what local bureaucrats presumably thought, too. Except it didn’t work that way, and now you get mugged and pay bribes.
Plenty of American systems have this. Eg. in medicine, we have a big, bureaucratic, obstructive FDA, and the US is full of obvious quackery. You might think we must choose between no FDA and quacks, or FDA and new drugs being terribly expensive. But now we’re stuck with both.
The Rationalist Conspiracy 
Large organized bureaucracies do tend to create stability though – having one big crime syndicate that can overpower any other (e.g., the police) is a marked decrease in chaos that allows systems to form, and even a dysfunctional system (whatever that means) is usually better than one where predictions can’t be made.
And I actually trust and use the FDA substantially to decrease quackery and enforce standards, although I’m commonly outraged by their overreach.
Coercion doesn’t solve problems. The AMA and FDA are not advisory institutions, they have coercive power. Coercion results in “the law of unintended consequences.” Moreover, it destroys market feedback and pricing, by driving pricing into the black market, and eliminating the collection of accurate information about the distributed choices of millions of consumers.