Kludgeocracy: A Hidden Cost of Bipartisan Policymaking

Our familiar and enduring ideologies offer convenient explanations and easy solutions to contemporary problems – and this is no less true when it comes to understanding government dysfunction. Generally speaking, liberal Democrats see a well-funded state as capable of remedying social ills caused by the failures of the free market, and conservative Republicans see the state – at best – as incapable of solving major social problems that are best left to the workings of market forces.

“While we can name the major questions that divide our politics,” writes political scientist Steven Teles, “we have no name for the dispute between complexity and simplicity in government, which cuts across those more familiar ideological divisions.”

Teles invokes the word “kludge” to identify complex government policies that fail to efficiently and effectively solve social problems relating to health care, unemployment, education, housing, and others.

Rather than blaming Republican or Democratic policies, Teles sees the cause of complex government — “kludgeocracy” — as “the attempt to preserve our market orientation and be a kind of welfare state” at the same time.

In other words, bipartisan legislation, by fusing alternative strategies, leads to inscrutable policies that complicate and obscure the role and functionality of government.

Bipartisan legislation, by fusing alternative strategies, leads to inscrutable policies that complicate and obscure the role and functionality of government.
Andrew Gripp, IVN Contributor
The source of this problem lies in our democratic legislative process. Bills must pass through partisan committees, win majority support in both houses — sometimes with a supermajority in the Senate to avoid a filibuster — and then pass the president’s muster.

This process creates “veto points” by which a politician can withhold support for a bill unless his or her idea is incorporated.

Most bills often require bipartisan approval, and they therefore need to satisfy both parties, or — in the case of the Affordable Care Act that passed strictly with Democratic support — the extremes of a single party.

The ACA is a textbook example of how combining big-government programs with market-based solutions produces kludge.

On the one hand, the ACA relies on traditional, direct welfare spending. States have the option of accepting federal funds to pay for bringing the uninsured into Medicaid in order to guarantee universal coverage.

On the other hand, the ACA preserves many aspects of the status quo ante in which businesses (in this case, those with more than 50 full-time workers) provide insurance to their employees — an insurance model that, curiously enough, evolved over a series of historical accidents.

Moreover, the law enables individuals without employer-based health care to purchase insurance at “marketplaces,” and in 2016, individuals can buy insurance across state lines.

The U.S. attempted to reap the benefits of powerful government programs and free-market principles, but in the words of Teles, “in having both, we lose a number of the advantages of either.”

The federal government’s heavy-handedness in initially requiring states to expand Medicaid to cover those living at or below 138 percent of the poverty level, for instance, was downgraded from mandatory to optional by the Supreme Court — leaving the poor in nearly half of the states still without coverage. Also, the government’s noncompetitive procurement and contracting process, especially with the tech industry, explains the troubled launch of the healthcare.gov website.

These problems reveal the difficulty of government fulfilling its promise to make access to health care easy and efficient.

But the market strategy is not without its flaws, redundancies, and complexities. The endurance of the insurance industry leaves intact administrative bloat.

For instance, Dr. Rob Lamberts, a physician who co-runs a small practice in suburban Georgia, spends 20 percent to 25 percent of revenue on the billing department that has to cope with the labyrinthine world of medical coding — a world in which each insurance company has their own list of unique and constantly changing codes.

On average, administrative costs for small practices in America are four times times greater than such costs in Canada, where there is a single-payer system.

America’s private insurance market, in which insurance companies negotiate prices with hospitals, is also notorious for creating a pricing system that is opaque and wildly inconsistent.

Such kludge pervades various areas of American life. It also operates at the IRS, a large government bureaucracy that seeks to solve social problems through a manipulation and complication of the tax code. For instance, it offers tax incentives that promote home ownership and employer-based health care, as well as other tax credits and deductions that reward all kinds of consumptive or otherwise socially positive behavior.

However, this complexity has its costs: Americans, only 16 percent of whom find the tax code to be fair, spend over $160 billion in complying with it each year.

Education too suffers the pitfalls of kludgeocracy.

On the one hand, there are major government programs and agencies, including Head Start and Pell Grants — not to mention public schools and the Department of Education. Yet, on the other hand, there all sorts of lesser-known tax incentives to help students finance the costs of education, including 529 and Coverdell accounts, as well as the growing popularity of alternative schools and vouchers.

Yet despite (or because of) this ad hoc combination of direct public programs and more discreet market approaches, American students fare poorly compared to students in countries like Finland, which have relatively straightforward education policies.

The complexity and cost associated with kludgeocracy in health care, the tax code, and education obfuscates the relationship between citizens and their government.

This misunderstanding was epitomized at a town hall meeting when an angry constituent told U.S. Rep. Robert Inglis (R-S.C.) to “keep your government hands off my Medicare.”

When the relationship becomes overly complicated and citizens cannot easily identify the source of dysfunction, they become frustrated and angry.

“That anger diffuses onto our system of government as a whole,” Teles concludes, “leading to a loss of trust and to skepticism of the possibility that the public sector could ever be an effective instrument of the public good.”

One immediate change is to demand less input from legislators, who instead could pass leaner, more “abstract” legislation and that leaves the work of policy design and implementation to those in the executive branch — including cabinets, departments, and regulatory agencies.

These conclusions will likely harden the resolve and worldview of all sides, who can claim that if only their ideas were implemented — and not those from the other side — then the kludgeocracy would vanish. Nevertheless, all citizens can demand simplicity, transparency, and uniformity from their legislators and policymakers in order to drain the kludge from our system.