Measuring Administrative Friction: A Transaction-Cost Framework for Sludge Audits

Abstract

Sludge-those excessive frictions that slow or distort administrative processes–has become a central concern in Behavioural Public Administration, yet existing definitions and audit models remain conceptually vague and difficult to operationalize. Building on the literature on heuristics, biases, and transaction costs, this paper proposes a more precise and generalizable framework for identifying and measuring sludge within public organizations. After clarifying its relationship with related concepts such as ordeal mechanisms, red tape, and administrative burden, the paper connects sludge to the classic typology of transaction costs, expanding it with an additional category of red-tape costs. It then introduces a new Sludge Audit Model that decomposes processes into measurable sub-actions, quantifies time, direct costs, psychological costs, and opportunity costs, and identifies which steps can be simplified, digitized, or eliminated without reducing efficiency. The model aims to provide public administrations with a practical and scalable tool to diagnose frictions and prioritize interventions that improve administrative effectiveness.