It’s both.
This is active neglect.
By perpetuating the militia conflict that brings so much death and destruction to the Placid region, the Federation willfully neglects their responsibility to ensure the welfare of their citizens.
But the neglect in Placid goes beyond just this.
The Federal response to the Reschard disaster in YC108 was borne out of embarrassment, as all of New Eden saw the shocking failure to act. History has judged the disaster to be a huge failure of territorial security and disaster response on the part of the Federation, and it’s that neglect which makes the choice of imagery on their monument so distasteful.
For years the Federation neglected the people of entire constellations and Districts politically. With the deliberate removal of suffrage in the wake of State military activity across Placid and beyond, a critical element of how Federal society functions was denied at a critical moment. Curiously this was not deemed necessary in Luminaire, even in the shadow of the Caldari Navy Leviathan, the Shiigeru.
There’s also documented neglect and corruption within Federal law enforcement in Placid. Both in the case of the RISE incident of YC109.