But, in government there is a third term, ability to operate.

How's this different from ordinary prisoner's dilemma?

Assuming there isn't a clear majority in all sections of government:

If both parties cooperate, operation is the highest. If one defects and one cooperates, it's lower, but still there. If both parties decide to defect, the government loses almost all effectiveness.

This is true at most in the short term. In the medium-to-long term the prisoner's dilemma is an epistemic prisoner's dilemma, and effectiveness is determined by the extent to which the people winning the short term prisoner's dilemmas are pushing the "right" policies. If they aren't, the level of "operation" is simply a measure of how fast the car is racing towards the edge of a cliff.

Or as Sir Humphrey from "Yes, Minister" put it:

Well, almost all government policy is wrong, but… frightfully well carried out.