Is America a ‘kludgeocracy’?

January 26, 2013

In "Kludgeocracy: The American Way of Policy," Johns Hopkins political scientist Steven Teles argues that "[w]ith the frontiers of the state roughly fixed, the issues that will dominate American politics going forward will concern the complexity of government, rather than its sheer size." To that end, he says, "The great agenda of the next four years of the Obama administration, and probably the nation’s next thirty, is coming to grips with kludgeocracy." That's a bold statement. Teles and I spoke about it late last week.


We can make this work! (Andrew Harrer - Bloomberg)

Ezra Klein: Let's start by defining it: What makes a program or policy qualify as "a kludge"?

Steven Teles: A program or policy qualifies as a kludge if the fundamental policy mechanism is substantially more complicated than the problem it is trying to solve dictates. In general, it is a "kludge" because it builds upon, rather than supersedes, the policies that came before it. So in that sense, much of Obamacare, for example, is kludgey. That said, I don't use the term kludge to only mean policies that are complicated because they are layered upon preexisting policies. But that's a big part of it.

Ezra Klein: One of the arguments you make in the piece is that America opts for kludges rather than other policy approaches more often than other countries, but you don't actually have any comparative data. So what's the evidence there? How do we know this isn't just the way of politics everywhere?

Steven Teles: I'm still collecting data on the comparative dimension of this, but I think the best example comes from tax policy. According to a recent study by PWC, the U.S. is 66th in the world in the amount of time it takes to comply with the requirements of the tax code. That's a pretty direct measure of complexity.

But measuring complexity is actually quite difficult, and there's not a lot of research that does it comprehensively. That reflects the more general problem, which is that complexity is a kind of hidden problem. The purpose of this paper was, in part, to give it a name so that we could think about a number of different things as all part of the same overall problem.

Ezra Klein: Reading your piece, one possible explanation it seemed was simply that American politics are more market-oriented than in other countries. To a large degree, it read like the difference between a kludge and a normal policy is the level of government policy. I.e., a public library or public school isn't a kludge. A tax credit to help the poor buy books from Amazon.com, or a voucher system, kind of is. Is that unfair?

Steven Teles: I think there's no question that America being more "market-oriented" is a part of the explanation. But we have to ask what that means. I argue that kludgeocracy is what you get when you combine a political culture in which market solutions have a certain prestige and in which the public simultaneously thinks there are a large number of areas that are legitimate subjects of public concern. If we were market-oriented and the public thought we should just let the market rip and see where the chips fell, that might not be a just society (I don't think it would be), but it wouldn't be a kludgeocracy. It's the attempt to preserve our market orientation and be a kind of welfare state that creates the problem.

Ezra Klein: What's interesting in your answer is that it doesn't leave much room for the general argument for market-provided services, which is that the market does it better. Is it your view that, in general, the added complexity of routing public services through private purveyors overwhelms whatever efficiency and innovation gains the private sector can provide?

Steven Teles: Right. Again, the issue isn't whether a service is better performed through the market or through the government. It's that in many cases, we haven't really made a choice of one or the other. We've tried to have both, and in having both, we lose a number of the advantages of either. In most cases, "privatization" does not really mean that a function has been given back to the market. It means that we have a highly subsidized, regulated, sometimes monopolized activity in which there is private ownership but a high degree of public control.

When you do that, you often lose a lot of what is good about markets, and in fact you create very strange kinds of private actors who are in fact totally dependent on government. And that often incentivizes them to be more oriented to lobbying and influencing government than to serving their customers. And that's where kludgeocracy is not just a complaint about "efficiency" but a complaint about the kind of governance that is generated by complexity.

Ezra Klein: Another culprit you identify was the wonk/think tank community, which you say is captured by a bias both towards proposing policies that might pass and towards policies that are new and interesting and clever. There's a huge incentive in the policy community to be within the bounds of the possible, which makes them something of a force multiplier for bad ideas when the possible has been narrowed too far.

Steven Teles: So I do think that the incentives of the "suppliers" of policy ideas in think tanks matter. For one, as you say, people in think tanks increasingly face incentives to be "practical," which means to propose things that have some possibility of passing under existing political conditions. I think this is in large part a function of their sources of funding -- foundations increasingly want you to show results in a relatively short period of time. So that gives you a very strong incentive to propose ideas that work within the fairly narrow confines of what is practical right now, and that often means layering something new on top of what we already have, rather than pulling things up by the roots.

In addition, as you also note, there is a benefit from proposing something "clever," where clever means proposing something that promises to get a lot of benefit out of a small amount of cost. So inside the policy mechanism, there has to be a lot of complicated action that's going to perform that alchemy. This gives up on what I think is one of the greatest benefits of government, which is that it can do some big, simple things. But saying, "Why don't we just increase Social Security benefits rather than trying to find a bunch of indirect ways to get people to save more for their retirement?" doesn't really promise to get much more out of the dollar we spend than a dollar of benefit -- which is fine! But it's not "clever."

Ezra Klein: The endpoint, then, is that there are relatively few checks on kludginess. Think tankers have their incentives towards cleverness and practicality. Democrats want to do more, but can't pass proposals that rely too heavily on the government. Republicans don't want to oppose popular benefits, but need to show they're fighting the growth of the state, so they come up with kludgifying proposals like premium support for Medicare. And special interests, as you argue in the paper, make a lot of money off the more complex, inefficient policy. So who's actually got a direct anti-kludge incentive?

Steven Teles: Well, the paper wasn't really intended to make anyone feel better. I'm not entirely sure that anyone actually does have an incentive to reduce kludginess. But I do think that a big part of the problem is that, as I noted before, this is a problem that until now had no name. We had no way of conceptualizing all these distinct problems as part of something larger.

In a sense, I think that people's interests and their ideas are connected. Right now, when there's no real sense of this being an overarching, and very real, problem, there's no political benefit from doing anything about it. I do think that if the costs of kludgeocracy were more visible, there would be more incentive for entrepreneurial politicians and policy entrepreneurs to propose anti-kludges. If the private compliance costs of various public policies were clearer, the craziness of doing things indirectly might be clearer and politicians might actually worry about being blamed for them.

For instance, people invest huge amounts of their time -- not to mention the huge payments to mutual fund managers -- because we've decided to put so much of our retirement savings into 401(k)s, IRAs, etc. If it was clear how much time and stress people were devoting to that, then there might actually be some returns for doing something about it. And I don't think ideologically committed liberals and conservatives have really grappled with how much policy complexity harms their own interests.

As Suzanne Mettler has argued, liberals lose out on the fact that the public doesn't really recognize all this activity as government, and thus doesn't think that government actually does anything for them. And conservatives need to recognize that in many cases privatization is actually worse than big, dumb, simple government, in that it is more likely to corrupt private business and make them into a coalition for more government. So, again, what matters is "problem definition" -- hopefully, just giving all this stuff a name can help with that.

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Brad Plumer · January 26, 2013