There’s a better answer in this thread, but a tl;dr/eli5, is that if all I can do is buy a stock then the only information available in the price are the people

There’s a better answer in this thread, but a tl;dr/eli5, is that if all I can do is buy a stock then the only information available in the price are the people who believe in the stock/bond (usually as a proxy for belief in the company). This means that all the people who believe the stock/bond is no good have no way to lend their belief to the price of the stock/bond. This represents an optimistic asymmetry in the stock/bond price. By having the ability to short, some of the asymmetry is removed thus making the price better able to reflect the future expected value of stock/bond. That’s what makes it “more efficient”.