Rethinking Social Welfare Fraud from a Complex Adaptive Systems Perspective

DOI10.1177/0095399715587520
Date01 January 2018
AuthorSpiro Maroulis,Yushim Kim
Published date01 January 2018
Subject MatterArticles
Administration & Society
2018, Vol. 50(1) 78 –100
© The Author(s) 2015
DOI: 10.1177/0095399715587520
journals.sagepub.com/home/aas
Article
Rethinking Social
Welfare Fraud from
a Complex Adaptive
Systems Perspective
Yushim Kim1 and Spiro Maroulis1
Abstract
Despite efforts to control fraud in public assistance programs, the perception
and realities of the problem persist. Serious barriers related to data collection
and research methods impede the understanding of how and why fraud
occurs, thereby limiting options for improving program integrity. This article
argues that based on a complex adaptive systems (CAS) perspective, social
welfare fraud can be understood as a collective outcome emerging from
repeated interactions among stakeholders during the routinized business
processes of public assistance programs. While dealing with fraud, great
attention must be paid to how it occurs and persists, not just how serious
the problem is or who commits these crimes.
Keywords
social welfare fraud, complex adaptive systems, agent-based modeling
Introduction
Public assistance programs such as the Special Supplemental Nutrition Program
for Women, Infants, and Children (WIC) and the Supplemental Nutrition
Assistance Program (SNAP, also known as Food Stamps) were established to
assist individuals and families with nutritional needs. Unfortunately, thes e
1Arizona State University, Phoenix, AZ, USA
Corresponding Author:
Yushim Kim, School of Public Affairs, Arizona State University, 411 N. Central Avenue, Suite
400, Phoenix, AZ 85004, USA.
Email: ykim@asu.edu
587520AASXXX10.1177/0095399715587520Administration & SocietyKim and Maroulis
research-article2015
Kim and Maroulis 79
programs have experienced fraud (Government Accounting Office [GAO],
1997, 1998, 1999; Government Accountability Office [GAO], 2010). The
existing literature and government reports address fraud along with abuse
and waste.1 This article focuses on fraud alone. Fraud involves “dishonesty,
illegality and the intentional wrongful obtaining of either money or benefits
from governmental programs” (McKinney & Johnston, 1986, p. 5). In the
literature, and in the general public, this phenomenon has been known as
welfare fraud,” a term that has primarily been associated with the public
image of welfare recipients who are illegally collecting welfare benefits
(Chunn & Gavigan, 2004).
Contemporary public assistance programs are more complicated than
what this public image implies in terms of who is involved in the programs
and how they engage in fraudulent activities. Over the past few decades, it
has become common practice for government agencies to contract out social
services to private organizations or third parties (Hodge & Greve, 2007;
Romzek & Johnston, 2005; Warner & Hefetz, 2008). Private retailers have
become integral parts of public assistance programs, such as WIC and SNAP,
by delivering benefits to the needy on behalf of the program. This compli-
cates the issue of welfare fraud because the intermediate party between gov-
ernment and benefit recipients may also engage in wrongdoing (United States
Department of Agriculture [USDA], 2001, 2003, 2007, 2013b). Although it is
rare, fraud committed by government employees has also been documented
(GAO, 1999).
Fraud in public assistance programs is difficult to understand, detect, and
cope with. Above all, there is an inherent data issue. Fraud information and
statistics largely come from government reporting systems or federal agen-
cies’ enforcement efforts to estimate the prevalence of the issue or any mon-
etary loss that may be incurred (e.g., GAO, 1999; USDA, 2007). As is the
case with many police- and investigation-generated crime data and statistics
(Maguire, 2002; Skeen, 2003), fraud statistics collected from government
agencies are likely to be biased downward because they include only those
cases that were detected or charged. Aggregated information on fraud can
show the seriousness of fraud in a program, but it does not reveal the underly-
ing processes that lead us to observe fraud.
As mentioned above, many public assistance programs are implemented
as a system involving several loosely coupled entities such as state agencies,
local agencies, private organizations, and benefit recipients. When fraud is
committed in such a system, it takes a long time for the fraud to affect other
entities and the entire system. Especially in the current “pay and chase” sys-
tem, in which states reimburse benefit providers first and later determine the
likelihood of fraud, it becomes difficult to trace, identify, and tackle the

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