I'm no expert on the inner workings of any government, but here are things that came to my mind:
The government controls the ebb and flow of information within itself, perhaps way more than anyone realizes. It controls the news (or at least most big stations), public education, libraries, and probably communications online if your story has internet. In most cases, all they have to do is downplay or outright conceal the bad news, and hype the good news. Example: The government owns the news stations? Nobody has to know! And anyway it's not that big of a deal, right? Meanwhile, check out all these awesome super-cool parks and statues the government's building to improve the city/state/country!
For the most part, regular citizens don't think about whether something is true if they see it on the news, and they don't usually do much research or try to find credible sources. It's how gossip and misinformation spreads so quickly: People read an interesting headline and repeat it to others, without even bothering to read the article or make sure the headline is unbiased.
The government in your story may also distract people from the really important issues by flooding them with tons of irrelevant news and ideas. They might be sending subliminal messages through advertising, and may use propaganda to build up their own image to seem amazing. One way to do this could be making other governments/countries seem really bad or dangerous, which by comparison makes them look better. Using people's fear against them is proven to be a really effective way to control how they think and act.
Aaaanyway, that got to be sort of a ramble but I hope it helps ^^