DOGEmaxing

we do a little government efficiency

The very first thing I wrote when I moved to Washington, D.C., in the summer of 2015 was an essay called, Disrupting Bureaucracy: How Uber and Estonia are paving the way for software to eat the state. It represented my attempted answer to what’s sometimes called the “transition problem” in political economy. Just as our economic theories tend to assume a static market equilibrium, our political theories tend to assume a more-or-less stable institutional regime. Our theoretical understanding of how markets and institutions transition to a wholly new equilibrium (e.g. how the Soviet system collapsed and then transitioned to capitalism) is far less developed.

As a young techno-libertarian, I had grown suspicious of the “starve the beast” strategy favored by my anti-statist friends and colleagues. It seemed to me that, at least in a democracy, the size and scope of government was endogenous to popular political demands (see: Wagner’s Law). Cutting taxes and sabotaging government services can thus paradoxically lead to an even bigger government, both because deficit financing makes government programs feel artificially “cheap” to the public (see: fiscal illusion), and because governments end up having to redouble their spending and regulation to offset bureaucratic inefficiencies (see: Kludgeocracy in America).

I concluded that, if we were ever going to transition to a more libertarian form of government, it would be essential to first use information technology to improve and streamline core government services in a way that creates space for crowding-in privatized forms of governance. Just as Uber and Lyft disrupted regulated taxi commissions, for example, perhaps many other governmental functions could one day be provided by the private governance of competing software platforms using AI-enabled reputation mechanisms, dispute resolution systems and the like — an “Uber for governance” that solves for the transaction costs and market failures that are today internalized by the Weberian nation-state.

In short, just as Marc Andreessen said “software is eating the world,” perhaps software will eventually eat the state. And nearly a decade later, it seems like this strategy for disrupting bureaucracy is finally coming to fruition in the form of Elon Musk’s Department of Government Efficiency.

DOGE theory and practice

DOGE was initially billed as a way to drive cost savings in government, but the fiscal framing is potentially misleading. While there are many sources of waste, fraud and abuse that DOGE will likely help address, the federal government’s discretionary budget is simply too meagre relative to defense and entitlement spending to make much of a dent (not that one shouldn’t expect significant reform in those areas as well). Instead, I think DOGE is better understood as a combined deregulatory and whole-of-government reform effort, with fiscal savings as just the icing on the cake.

So far, it’s been announced that the core DOGE team will be stationed within the U.S. Digital Service — now renamed the U.S. DOGE Service — with “DOGE teams” of at least four embedded in key government agencies. According the Executive Order establishing DOGE,

Each DOGE Team will typically include one DOGE Team Lead, one engineer, one human resources specialist, and one attorney. Agency Heads shall ensure that DOGE Team Leads coordinate their work with USDS and advise their respective Agency Heads on implementing the President’s DOGE Agenda.

The EO then directs the USDS Administrator to commence a Software Modernization Initiative “to improve the quality and efficiency of government-wide software, network infrastructure, and information technology systems,” as well as “promote inter-operability between agency networks and systems, ensure data integrity, and facilitate responsible data collection and synchronization.” This is achieved by requiring Agency Heads “to ensure USDS has full and prompt access to all unclassified agency records, software systems, and IT systems.”

The revelation that DOGE will be focused on modernizing federal IT infrastructure caused some on the left to breathe a sigh of relief, though I think they will be in for a surprise. Consider that F.D.R. first seized the reigns of the federal bureaucracy by moving the Bureau of the Budget — the precursor to today’s Office of Management and Budget or OMB — into the executive office. Under the stewardship of Harold D. Smith, the Budget Bureau centralized agencies’ legislative requests to Congress while embedding beachheads in each agency tasked with aligning the federal bureaucracy to F.D.R.’s New Deal agenda. This included moving disfavored agencies out of D.C., developing accounting and auditing system to automate clerical work, overhauling duplicative statistical systems, and forcing through agency-wide reorganizations. As one Congressman said at the time, “We grant the powers and Harold Smith writes the laws.”

The DOGE takes a page out of F.D.R.’s playbook, now oriented around CTOs and CIOs rather than budget officers, though Russ Vought’s OMB will continue to play a central role. The core work of DOGE will be less about making minor improvements to existing IT systems than in overhauling the federal government’s tech-stack from top to bottom. If successful, DOGE will bring unprecedented transparency to federal spending while laying the infrastructure needed for a significant downsizing in the federal workforce through automations.

For example, the DOGE is reportedly planning to move the systems used to track federal spending onto a permissionless blockchain. Curious where your infrastructure dollars are being spent? Today, accessing that information may require combing through obscure PDFs and press releases or submitting a FOIA request. In the near future, it could be as simple as making an API call to fetch the Department of Transportation’s on-chain transactions.

While this might sound like a Web-3 boondoggle in the making (and it may still be), there are precedents that make integrating blockchain into the government well worth considering. Take Estonia, which has the most most sophisticated e-government in the world. Given the benefit of a blank slate following the collapse of the USSR, Estonia’s e-government was the product of young policy hackers who entered the civil service when the internet was just starting to take off. With the foresight to see where technology was heading, these reformers pushed Estonia to become digitally-native through a series of sweeping modernization initiatives.

This included adopting a novel technology known as X-Road; a distributed, public key encrypted data exchange layer that resembles a permissioned blockchain. X-Road works like an intranet that allows decentralized servers and public key holders to exchange data quickly and securely according to a set of interoperability standards. It also enables substantial automation by allowing government APIs to integrate with things like e-banking, business registries, electronic health records, child support systems and more. Today, 50 government services, including voting in Estonian elections, can be done via a mobile app that’s accessible 24 hours a day, 7 days a week.

The U.S. federal government has long way to go to get to Estonia, but you have to start somewhere. And for better or worse, we don’t have much of a choice. With AGI on the horizon, the U.S. government is simply not prepared for the cybersecurity and throughput issues entailed by a world flooded with billions of superintelligent agents.

Whether DOGE has all the resources and authorities it needs remains to be seen, but given the enormous time-pressure of the current moment, I for one will be rooting for its unmitigated success.