If you want to represent "humans and their idiosyncrasies" in terms that can be understandable to a classical liberal economist...

Government itself is an emergent phenomenon. Rent seeking, regulatory capture or other market distortions are not the only emergent elements of government. Legislation, elections and all the other basic components of democratic government are themselves emergent, changing in response to "market" forces. I don't personally think this is the best framework for thinking about these things, but even within the framework it is possible to consider them.