Sludge audits are becoming increasingly common in behavioural public policy. In this post, Leonhard Lades and Lucie Martin introduce the SLUDGE approach to sludge auditing. It aims to make it easier for applied behavioural scientists to conduct their own sludge audits, and ultimately improve how administrative procedures are designed.
What is sludge, and why do we care?
Sludge, as introduced by Thaler and Sunstein, describes frictions that make it harder for people to follow through on their intentions. Examples of sludge include complicated forms, excessive paperwork, long waiting times, and complex or uncertain processes. Sludge can impose costs that consume significant time, money, and other resources. The consequences of such costs can be serious as even seemingly small frictions can worsen user experience and create frustration, decrease uptake of vital programs, perpetuate inequality, and slow economic growth. Some argue that sludge is the “dark cousin” of nudge: While nudges can remove friction in the choice architecture to help people achieve their goals, sludge slows people down or stops them altogether from achieving their ends. Others link sludge to the concept of administrative burden as discussed in the public administration literature.
How can we take action to reduce sludge?
Cue ‘sludge audits’: a way to look back at existing policies and the burdens that their implementation generates, to see if the current stock of administrative procedures can be justified. Sludge audits are increasingly used in both the public and the private sector as demonstrated in a recent OECD report. A sludge audit is a structured behavioural assessment of a service or process designed to systematically identify, quantify, and reduce friction and associated costs. The most comprehensive way to conduct a sludge audit is designed by the NSW Behavioural Insights Unit in Australia. Their Sludge Toolkit includes a description of the method, an online tool to run sludge audits online (the Sludge Finder), and a simplified Excel spreadsheet to conduct sludge audits offline (the Sludge Finder Lite). The OECD is also developing a new sludge audit guide informed by an academic expert panel and sludge audit practitioners from around the world.
Our SLUDGE approach is one way to conduct sludge audits in a relatively friction-free way.
Figure 1: The SLUDGE approach
The SLUDGE approach relies on cognitive walkthroughs (where auditors navigate through the processes themselves) and semi-structured interviews to create a behavioural journey map. This is used as the basis to quantify and qualify the sludge present in the process. Recommendations are then derived from the combination of the quantification (where the sludge is) and qualification (what type of sludge there is).
Figure 2. The methodological overview of the SLUDGE approach
How to undertake your own sludge audit
Step 1: Select a Relevant Policy or Process
Every sludge audit starts with defining the scope of the audit. This involves choosing a process or service that is ripe for review. The audit should focus on a process where people interact with a service or process to achieve a specific goal (such as paying a fine, or renewing a license). It is important to talk with stakeholders, consider high-priority processes, and specify clear criteria for selection. These criteria should include the likely level of sludge, existing will to implement changes, the potential impact of improvements, and the feasibility of implementing change.
Step 2: List Stages and Steps of the Behavioural Journey
This step generates a detailed map of the user’s behavioural journey. This map is the foundation of the entire audit. One way to structure the map is to organise the process in several stages and steps as suggested in recent work. The stages are relatively broad, and the steps are micro-behaviours that are more detailed and refer to specific actions that are required. It is helpful to be “uncomfortably specific” when detailing these steps. Auditors can start by drafting an initial map (perhaps through desk research and a cognitive walkthrough of the process) and then refine it based on feedback from stakeholders (for example using interviews, as discussed in our sludge interview guide). Figure 3 provides an example of a journey map in the context of the Irish Afforestation Scheme.
Figure 3. Example of a behavioural journey map from an afforestation programme
Source: Lentz, Augustenborg and Lades (2026)
Step 3: Uncover the Level of Friction (Quantifying)
Once the journey map is complete, the next objective is to quantify the friction at each step. Quantification tells us where the sludge is highest and allows us to identify the specific steps where sludge reduction interventions might be most promising. To quantify the level of sludge at each step, auditors assign a number on an ordinal scale to each step (for example from 0 = “no sludge at all” to 6 = “extremely sludgy”). For this assessment, the NSW Sludge Scales are incredibly helpful – they provide behavioural best practice criteria against which to rate many different process features (such as letters or forms).
Interviews with users and any other type of data that is available (and ideally data on outcomes, such as user dropout rates by step where relevant) can also be used to assess the level of sludge. Figure 4 illustrates one outcome of such a quantification.
Figure 4. Example of sludge quantification
Source: Lentz, Augustenborg and Lades (2026)
Step 4: Diagnose Types of Friction (Qualifying)
While quantifying sludge helps us locate where the problems are, qualifying sludge helps us understand what kind of problem we are facing. Both are essential for the development of sludge-reduction interventions. To qualify the type of sludge, we rely on research in behavioural science and public administration which suggests that sludge can be defined as aspects of the choice architecture that lead to the experience of various costs.
In our approach, these costs include:
- Search costs: when sludge makes it difficult to find relevant information;
- Evaluation costs: when sludge makes it hard to weigh costs and benefits to make a decision;
- Implementation costs: when sludge makes it difficult to follow through or implement the decision;
- Time costs: when sludge leads to too much time spent on the process;
- Financial costs: when sludge has financial implications; and
- Psychological costs: when sludge leads to negative emotional experiences such as stress, frustration, stigma, shame, or anxiety.
This step ensures we do not only focus on time and money spent in the process – we need to think about other types of costs. The qualification of the types of sludge present at each step can also inform the quantification of sludge in Step 3 by making sure that relevant friction-related costs are not ignored.
Step 5: Generate Recommendations and Ideas for Sludge Reduction
Step 3 of our approach (U) helps auditors prioritise the aspects of the process where sludge is highest and Step 4 (D) tells us what type of sludge there is. Combined, this information can tell us where and how to remove sludge. In this step, solutions are generated to make the necessary behaviours easier, more inclusive, more compelling, better at prompting follow-through, etc. Recommendations that follow from this analysis tend to be process-specific, but they often involve suggestions to remove or automate steps, switch defaults, simplify information and language (reducing jargon), use visual aids, improve operational transparency (by explaining wait times or next steps), and design decision aids to alleviate cognitive load.
Step 6: Evaluate These Interventions
The final step is to ensure and showcase that the changes work as intended. The most robust way to evaluate sludge reduction interventions is to run an RCT measuring the behaviour of interest as the outcome with and without the changed process. Where random assignment to different versions of the administrative processes is impossible, conducting follow-up sludge audits on the modified steps or the whole process after a trial period allows before-and-after comparisons. Here, it is particularly important to stick to the sludge audit approach as closely as possible so that both audits are comparable. Moreover, auditors who test whether the level and type of sludge have changed should not be the same individuals who generated ideas for sludge reduction and implemented them.
Open questions
There are many open questions on sludge and sludge auditing, and behavioural scientists are well-placed to find answers to them. For example, can we identify a structured procedure to evaluate whether an administrative process is justified or unjustified? Does it matter how and where the sludge originates (intentionally or unintentionally; in the public or private sector)? How do we best test whether vulnerable populations suffer more from sludge than others? How can sludge audits be institutionalised? Should sludge audits be conducted by external auditors (such as researchers) or internally? Can we quantify (in monetary units) the costs of sludge? How reliable are ordinal sludge scales?
There is a lot to do for BPP scholars and practitioners. But we are convinced that sludge audits should be added to the essential toolbox of behavioural public policy.
Leonhard Lades is a Professor of Behavioural and Environmental Economics at the Stirling Management School, working at the intersection of behavioural science and environmental policy. He has co-developed and applied the FORGOOD ethics framework and is increasingly interested in the identification and the removal of behavioural “sludge”, particularly when it prevents us from reaching environmental targets.
Lucie Martin is a Research Officer in the Behavioural Research Unit at the Economic and Social Research Institute in Dublin, Ireland. Her work focuses on applying behavioural science to help solve policy challenges in areas such as health and environmental behaviour.