Sludge Audit

What it is

Sludge is friction that makes it harder for people to obtain an outcome that would make them better off by their own lights. Paperwork, queues, phone-only cancellation, repeated identity checks and baffling forms are all candidates. Sunstein's argument is that these costs are usually invisible to the organisation that imposes them, because they fall on the people moving through the system rather than on the system itself. Behavioural biases and limited attention can make them much more harmful than the organisation expects, and they can fall hardest on the most vulnerable.

An audit makes the costs visible. It counts the steps, the time and the drop-outs at each point, and asks whether each step serves a purpose that justifies what it costs the people who face it.

In effect

For a subscription business, the simplest audit compares the route in with the route out. If joining takes one screen and leaving takes a survey, two retention offers and a phone call, the difference is a measure of sludge. The research on why removing such steps matters is strong in places. In a 2014 rebate experiment led by Joshua Tasoff, information and reminders made no reliable difference to the gap between what people expected to do and what they did, while making the task easier cut that gap by about half.

What it does not say

A sludge audit does not say that all friction is bad. Nudge endorses cooling-off periods for decisions people make rarely and while emotions run high, and accepts that the well-meant checks known in American government as program integrity generate some sludge as a by-product. The test is direction: a pause that protects the person moving through the system can earn its place, while a pause that appears only when someone tries to leave usually serves the organisation.

Nor is the audit itself a tested intervention. It is a proposal for how institutions should manage their own processes, and its value depends on whether the frictions it finds are then removed.

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