When the COVID-19 pandemic hit in 2020, Congress turned to the unemployment system to assist those who were out of work. However, the state agencies in charge of administering the system were ill-equipped to handle the influx of claims and had to navigate the challenge of preventing payments to fraudulent individuals. This was evident in Michigan, where the unemployment agency faced pressure to expedite payments and disregarded its usual 10-day verification process. They relied on an automated system called Fraud Manager to identify suspicious claims but were unaware that the contractor responsible for running it had set it to run only in the evenings. As a result, the agency unknowingly paid out $1.5 billion in fraudulent claims.
This story is not unique to Michigan. Every state has experienced similar issues with fraudulent claims, resulting in the potential misallocation of billions of dollars in unemployment benefits. This problem extends beyond unemployment insurance and is pervasive throughout various government programs at all levels. Jennifer Pahlka, in her book “Recoding America,” highlights the technological challenges that hinder government agencies. She emphasizes the need for individuals who possess technical expertise and understand the policy and political dynamics at play to address these challenges effectively.
Pahlka’s account resonates with those who have firsthand experience working in government. It unveils a system that prioritizes bureaucratic requirements over user-friendly technology and effective governance. The focus on compliance and rigid rules often leads to complex and convoluted processes, deterring eligible individuals from accessing the benefits they need. The government should be held accountable for the services it provides, rather than just checking boxes. The culture of strict compliance inhibits innovation and the pursuit of the public interest.
Pahlka’s book goes beyond examining government technology; it explores the larger issue of administrative governance in the United States. It calls for a reevaluation of the rigid rules and regulations that hinder effective governance and advocates for rebuilding the government’s capacity to fulfill its responsibilities. This aligns with the growing movement for “state capacity” or “abundance progressivism,” which aims to improve the government’s ability to address pressing issues such as housing, renewable energy, and public transit.
The question of how to achieve this goal is challenging. While the movement has predominantly been associated with the left due to its focus on housing, renewable energy, and transit, there is potential for bipartisan support based on its emphasis on construction and deregulation. Pahlka believes that government capacity should not be a partisan issue, as both Republicans and Democrats would benefit from avoiding implementation failures in government technology.
However, it is important to acknowledge the role ideology plays in shaping government capacity. The underinvestment in the unemployment system can be attributed to ideological differences, as Republicans have historically shown reluctance towards safety-net programs. This indicates that state capacity is influenced by political consensus. Nevertheless, it is crucial to address these challenges and prioritize efficient and effective government technology to better serve the public.
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