Monday, November 4, 2013

Consultants and Kludgeocracy

One more on this topic and then I'll let it go. As I said in the Prospect piece, I pretty much agree with Steven Teles in his description of "Kludgeocracy" and the causes for it. 

The one possible exception I have is something pretty important: the outsourcing of government work to outside contractors, particularly in the national security area. Here's Teles:
Finally, kludgeocracy is now self-generating, as its growth has created a "kludge industry" that feeds off the system's appetite for complexity. In the name of markets and innovation, and driven by increasingly strict (and often arbitrary) limits on government personnel, the United States has created what public administrators call a "hollow state," in which core functions of government have been hired out to private contractors, operating under the oversight of increasingly overwhelmed civil servants. Christopher McKenna, in his book The World's Newest Profession, shows that, for over half a century, management consultants brought in to advise governments (at great expense) have — not surprisingly — recommended a greater role for consultants and contractors.

This army of consultants and contractors then became a lobby for even greater transfer of governmental functions to outsiders — including, as Janine Wedel shows in Shadow Elite, the transfer of such core roles as formulating policy recommendations and overseeing contractors. This kludge industry, having pulled the fundamental knowledge needed for government out of the state and into the private sector, has thus made itself nearly indispensable. And with its large, generally non-competitive profits, the kludge industry has significant resources to invest in ensuring that government continues to layer on complex policies, and hence continues to need to purchase more services.
I agree with all of this, and think it's a potentially very big deal, and very bad for US democracy and governance.

What I'm not entirely certain of is that it's similar to other "kludeocracy" examples -- the overly complex health insurance reforms, the climate proposals designed as workarounds when Congress won't co-operate and the courts give some latitude and take other options away, and more.

This one, to me, is at least potentially something that could happen in any system once it starts down the path of outside contractors. And I suspect that the first steps down that path are driven not by a system with lots of veto points, but a combination of voter imperatives and politician incentives: both are driving politicians to find ways to cut government without touching government services.

In other words, it's very possible for me to imagine a US Conservative Party in a Westminster system doing the exact same thing in order to make anti-government conservatives happy without upsetting swing voters. Or even a US Labor Party in a Westminster system, with a Bill Clinton as Prime Minister, doing the same thing in order to be able to brag about ending "big government" without taking any hits for removing actual government services.

Now, on the other hand, as far as I know it hasn't happened elsewhere (has it?). So maybe it is driven by the US system; surely the weaker bureaucracy in the US has fewer tools to resist outsourcing government than stronger bureaucracies elsewhere.

So I'm disagreeing; just raising the question. I'd love to hear some experts chime in on this one. I will say that if it really is an inherent part of the US system under modern conditions, it bothers me quite a bit, certainly more than the occasional government shutdown or even the kludgey ACA.


  1. This ties in with the common complaint of the right that the wealthiest households in the US now cluster around DC.

    Considering that the US is not a real country, it's not surprising that it looks more like a bustout every year.

  2. As you know, swing voters don't spontaneously become "upset" -- they hear and respond to arguments from the other side to the effect that their government is giving them a bad deal. So the relevant question for comparing systems (and I don't know the answer to it, though I have my suspicions) is whether there are features of the US system that make it less likely that outside contracting will become a partisan political issue and potential fodder for election campaigns.

  3. We hardly suffer from a "weaker bureaucracy" in the area of national security. The NSA makes its own policy in almost complete seclusion from the democratic process. We've only seen meaningful oversight recently, as a result of leaks by a private contractor. So that's one way that the kludeocracy has served democracy. On the other hand, the existence of private contractors might enhance the ability of the NSA to lobby the President for more power.

  4. This reminds me of your frequent complaints about vetting and (I think this was you) the ridiculousness of the 'no lobbyists' rule. Most of the these outside people must spend some of their time lobbying or other things that make it difficult to bring them in from the outside. Since their expertise will still be valuable to their aligned administration, that will only contribute to the problem. Thus, careful vetting of who gets in may be compounding the problem of outsourcing, especially on policy development.

  5. Large corporations, especially US-based ones, have experienced exactly the same phenomenon. Once you begin to outsource core functions, you rapidly lose the ability to manage the contractors, which forces you to hire more consultants. What's even weirder, in a capitalist system, is that the cost savings expected by outsourcing are almost entirely a myth.

    In the few cases where there are cost savings, they come from screwing the workers. Lawn maintenance used to be done by people who were employed by the corporation, and the workers got the same benefits as everyone else. Then this function was outsourced, and the workers for the contractor don't get any benefits at all.

    Except in cases like these, the belief that outsourcing saves money is a strictly ideological one, and no amount of evidence to the contrary can convince the true believers to re-examine the premise.


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