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I see the largest part of that as being the structure of every single town and burgh reinventing the wheel with its very own police/fire departments, school committees, etc. I was shocked when I moved to Maryland in 1988 and found the structure of County government and the huge efficiencies that follow vs. the incredible inefficiency of the Massachusetts way.
I know this is "pie in the sky" but, if the Commonwealth could somehow reorganize to County structures, like most other states, it would be on a higher economic plane than just about anyplace on earth.
A variety of Kings tried to do just that a couple times in the 17th and 18th centuries with... poor results lol. The annexation rebellion in the late-19th century showed that the impulse for local control perpetuated. In some ways, the highway revolts in the mid-20th century followed similar patterns. Municipalities and political activists in the region have learned how to leverage the system for social reforms (going back to the abolitionist days), while also using it for protectionism (of 'character', of the natural environment, and of their school systems). The sheer certainty of how beneficial and natural hyper-local governance is has deep roots, and the vested interests in New England are entrenched in that system. The legislature wouldn't dare lest it prompt a backlash. But you're right that it's the major impediment for trying to solve a lot of entrenched problems in the state/region.