1. This is regarding Police Corruption
You said that corruption is allowed if the person in question doesn't get caught. They will face the consequence of being whitelisted or will receive a warning in the event that they are found guilty of such event.
When talking about whitelisting, do you mean removal from the government agency OR from the server? And this leads to my second question: will this, in the end, be a whitelisted server. I think it should. And if you have played on servers that are not whitelisted players only, where fanboys pop-up on a daily basis, then you would too!
If you meant unwhitelist (removal) from the server: I think that taking external action against corruption would be a bad idea and would seize the opportunity for the community to capitalise on a unique roleplay experience. For example: If there was strong evidence against a member of TPF being corrupt then rather than banning them, the police commence a manhunt operation to bring him in, and broadcast a help request to the citizens of the land to aid police in their search. A journalist would have the opportunity to get involved by interviewing police and civilians and maybe even try to contact the person in question to host a private interview, etc. Then obviously the courts, etc and then jail. So much opportunity.
If anything, corrupt government employees should have to make money on their own and stabilise themselves and proof to factions that they have changed by living a lifestyle in absence of wrongdoing for a period of time before they should ever be able to apply.
I'm rambling but you get the idea. I think certain things that are prohibited, where possible, should be dealt with in-game as much as possible.
2. In regards to government owning businesses
It is definitely risky business but I'm not sure you completely understood me so let me try to rephrase it all.
You said that citizens will be able to take a number of actions progressively in order to achieve their goal, such as removing a party from office.
My point was that a party, as a collective, could effectively use their money from working as the government as well as a small portion of state funds to build their business. You said they were allowed "to use state funds to help start business or subsidise businesses" which would include their own business as well as others. In theory, the business that the government created may create could gain them a lot of money and the government may try to invest in companies (or even buy companies altogether). By investing and buying companies, they'd gain a lot of power and it would be significantly easier to buy out other companies once the money starts flushing in. Even if there were to be voted out of office, the small group of businessmen and woman would still have a lot of control over the economy if there was little competition. Then, of course, they could buy loads of properties, etc.
I could see most of this happening right before the eyes of the public without them even noticing before it's too late. This is just a great master plan though I know I went a little crazy with that theory but you get the idea.
To conclude: Governments should only be able to subsidies services like the transport for takistan company that was created before the end of the arma 2 days.