Chances are you’ve had a bad experience at the Department of Motor Vehicles—the waiting, the paperwork, the lackadaisical staff. If you’re particularly unlucky, you have a story or two about being told at Desk A to get Form X from Desk B, only to be told at Desk B that, no, you first need Form Y from Desk A. And it’s not just the local DMV: a hospital, a bank, or an insurance company can be just as confounding as a poorly run government agency.
Americans hold varying preferences on the size of government and the amount of corporate regulation. But nobody likes navigating bureaucracy; most of us just want things to work. Cass Sunstein has coined a term for the “frictions that separate people from what they want to get”: sludge. “Sludge includes, but goes beyond, ‘red tape,’” he says. It includes waiting time, reporting obligations, confusing or duplicative application requirements, and clearance processes (such as “when ten people must ‘sign off’ on some document or initiative”). The “term is not hard-edged,” Sunstein writes, but “in context, it is usually clear enough whether or not we are dealing with it.” A classic example comes in the movie Office Space, as Peter Gibbons struggles with TPS reports.
Sunstein knows plenty about sludge. For most of President Obama’s first term, he led the Office of Information and Regulatory Affairs (OIRA), the federal government’s designated sludge-fighter. The office administers the Paperwork Reduction Act, one of those rare federal laws that at least tries to do what its name implies. That law instructs the Office of Management and Budget (of which OIRA is a part) to “minimize the Federal information collection burden.” In 2012, Sunstein invoked the law in a memo urging government agencies to avoid “unnecessary” demands for information, use “streamlined” forms, exempt small businesses from reporting rules, and “maximize the re-use” of data.
Nonetheless, sludge continues to grow. It’s produced by federal, state, and local government entities, and by companies large and small. It plagues lawyers and courts, doctors and hospitals, professors and universities. It slows the economy, reduces employment, and hinders innovation. Americans spend around 11.4 billion hours a year doing federal paperwork. “If we value an hour of work at twenty-seven dollars,” Sunstein calculates, “we are speaking of the equivalent of $307.8 billion.” Not surprisingly, the number has been rising.
Many office workers now devote around one-quarter of their time to “bureaucratic chores.” In a survey of readers of the Harvard Business Review, most respondents said that their organizations are gradually becoming “more centralized, more rule-bound and more conservative.” One consulting firm finds that corporate “complicatedness” has been soaring—by as much as 7 percent a year—for several decades. In other words, firms are placing more rules, processes, metrics, committees, clearances, and reviews between their workers and the completion of tasks. (Consider email: whereas in 1970, a typical manager received around 1,000 “external messages” a year, today he receives about 30 times that amount.)
Other institutions are faring even worse. In recent years, the university administrative corps has doubled, and the ratio of administrators to students and faculty has grown dramatically. In health care, around $800 billion a year—more than one-third of total spending—now goes to cover administrative costs. And many scientists spend almost as much time working on grant applications and reporting as they do on research. Several of these findings appear in a recent RAND Corporation report by political scientist Michael Mazarr, who sees “bureaucratic sclerosis running through public, private, and charitable institutions of the whole society.”
One of the worst things about sludge is the undue burden it places on people who are already pressed for time. “If the government is asking poor people to navigate a complex system or to fill out a lot of forms,” says Sunstein, “they might be especially likely to give up.”
But that’s just one of many harms that sludge inflicts on society. Buying a home? About one-quarter of what you’ll pay comes from government regulation. Building a bridge? Lawsuits and other veto points will almost certainly blow up your budget. Mazarr cites evidence that, mired in “a deepening bureaucratic quicksand,” the government is increasingly inept at responding to national crises.
Annual productivity growth, which through much of the twentieth century averaged around 2 percent, has since 2000 slowed to less than 0.3 percent. There are many reasons for this, but sludge is a prime culprit. It’s costing the American economy perhaps $3 trillion a year in lost output.
Clever people are thinking hard about how to combat sludge. Alec Stapp, co-founder of the Institute for Progress, suggests that we try to reduce paperwork in the field of scientific research by handing out grants (in part) by lottery. Sunstein is a strong proponent of “sludge audits”—requiring government agencies to show that the benefit of the sludge they impose justifies the cost.
Yet the problem can seem intractable. Consider the federal government. OIRA boasts that it “has released numerous documents over the years, including memoranda, frequently asked questions, guidance to agencies, and similar products, clarifying and streamlining the application” of the Paperwork Reduction Act. Many of these documents take a pleading tone, with government agencies “encouraged” or “requested” to produce less sludge. Yet the sludge proliferates—and OIRA has fallen behind in keeping track. The agency is supposed to release an annual Information Collection Budget, but the latest report contains data from 2017.
Late last year, President Biden issued an executive order “on Transforming Federal Customer Experience and Service Delivery to Rebuild Trust in Government.” The document is rife with bureaucratic language. Government efforts to get a handle on sludge begin to seem like another source of sludge:
Within 90 days of the date of this order, and on a regular basis thereafter, the Deputy Director for Management of [the Office of Management and Budget] and other members of the President’s Management Council (PMC) shall work with the Assistant to the President and Chief of Staff, the Assistant to the President for Domestic Policy, and the Assistant to the President for Economic Policy to select a limited number of customer life experiences to prioritize for Government-wide action to improve customer experience.
Some would say we can simply innovate our way to efficiency. In 100 years, Sam Altman, the CEO of OpenAI, contends, “people will look back at 2022 and be even more astonished at how bad our quality of life was than we are looking back at people who lived 1000 years ago.”
Others aren’t so sure. In 1988 Joseph Tainter, an anthropologist at Utah State University, published The Collapse of Complex Societies. The book grapples with “the dilemma of fallen empires and devastated cities,” the “troublesome” image of “the vast human endeavors that have mysteriously failed.” Societies, Tainter proposes, are problem-solving organizations. What, then, causes them to cease solving problems—and therefore to die? Tainter’s answer: diminishing marginal returns on complexity. When addressing problems, societies tend to use complexity as a tool. They form military hierarchies, build monuments and infrastructure, concoct religious ceremonies, and create bureaucracies.
Complexity “grows by small increments,” Tainter notes, “each of which seems reasonable and affordable at the time.” But added complexity always comes at a cost. Over time, more is spent to accomplish less. “Organizational solutions tend to be cumulative,” Tainter writes. “As systems develop more parts, and more complex interactions among these parts, the potential for problems, conflicts, and incongruities develops disproportionately.” Eventually a society becomes too tangled, too slow, and too sclerotic to cope with new challenges as they arise. At that point it collapses, shedding complexity and reverting to a simpler state.
An unfortunate lesson of Tainter’s book is that societies almost never arrest, let alone reverse, the proliferation of complexity. Even as sludge itself becomes a pressing issue, societies go on “increasing the proportion of the population engaged in administrative tasks.” For Tainter, the proliferation of “specialized administrators” is a “major” source of the runaway societal complexity that leads to collapse. Sludge kills.
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