A Insufficient funds and staffing make poorly run government institutions even less effective, further reducing confidence in them and thereby prompting more budget cuts. ---
The bestB Poorly run government institutions are made even less effective, further reducing confidence in them and thereby prompting more budget cuts, because of insufficient funds and staffing. –---
The modifier is far away from its modified noun ‘poorly run government institutions’; a wrong word order of modification.C Insufficient funds and staffing make poorly run government institutions even less effective, confidence in them is reduced, more budget cuts are prompted. –
Poor parallelism D Funds and staffing that are insufficient make institutions in the government that are run poorly even less effective, further reducing confidence in the institutions and thereby prompting more budget cuts.---
circuitous and verboseE Insufficient funds and staffing make poorly run government institutions even less effective, further reducing confidence in them, which prompt more budget cuts. –
No precise reference for the ‘which’; if it is confidence, then there is an SV error. If ‘which’ refers to the funds and staffing, it is structurally wrong since a relative pronoun cannot modify a noun jumping over verb ‘make’