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Feature 03.01.2022 17 minutes

The Importance of Management Policy in American Governance

Government Red Tape

Why the Right needs to study management policy.

In November, the Biden Administration released the President’s Management Agenda Vision, outlining its agenda to overhaul the federal workforce and its operationsAt the top level are some goals all Americans should like, such as improving how citizens interact with the federal bureaucracy and rebuilding domestic industrial capacity. Other goals, as well as the methods of achieving them, reflect an expressly progressive ideology. If fully implemented, this risks further entrenching partisan politics into the machinery of the federal bureaucracy, undermining the ideals of a meritocratic and nonpartisan civil service, and misdirecting agency funding and activity away from their fundamental missions and toward costly ideological goals such as eliminating climate change. If we stay on this course, we will soon find it impossible to reform wasteful programs and inefficient institutions, even when principled advocates of limited government are elected.

This landscape heightens the urgency to understand management policy, one of the most consequential yet least-studied domains of public policy. This is a particular challenge on the political Right. Modern Republican administrations have attempted to reform the management of the federal government. Yet the executive branch remains poorly managed and, all too often, unaccountable to Congress and the American people. Despite this longstanding and widely recognized challenge, most top right-of-center think tanks either ignore management policy, offer research that merely tweaks or reinforces the status quo, or promote ideas that are too theoretical for practical implementation. To address this gap, we need thorough research, bold yet practical policy playbooks, and a talent pipeline with the right managerial skill sets. Otherwise, even if they win elections, conservatives risk being like the dog that catches the car, lacking the specific knowledge to command the federal bureaucracy and implement their governing agenda.

This disinterest in management policy is unfortunate, because much is at stake. First, management policy governs the use of trillions of taxpayer dollars and the management of millions of federal workers in one of the largest, most complex organizations in history. Second, management policies can build or deteriorate the people’s trust and confidence in the competence of government, whether in handling routine business, administering elections, protecting our national security, or responding to emerging crises.

It is necessary, therefore, to understand what constitutes management policy, to know who is responsible for its crafting and implementation, and to appreciate its true size and scope. Management policy needs to be studied, not ignored. We need to build new institutions, train new talent, and stop ceding this ground to the progressives. We need to craft a bold new policy reform agenda that will transform the operations of the federal government to reflect a sound and principled vision of our republic that serves the everyday American.

This essay introduces federal management policy, outlines key policies implemented over the past 100 years, identifies key stakeholders in designing and implementing them, and highlights the enormous size and scale in human, financial, and technological resources that they govern.

Following the President’s Management Vision, the Biden Administration will issue several policy documents to codify its vision of management policy throughout the federal government. Released concurrently with the president’s budget in February 2022 will be the administration’s key management policies: The President’s Management Agenda and each agency’s four-year strategic plan, four-year performance plan, and two-year agency priority goals. These policies will steer agency resources and focus the attention of management officials. Their release should also prompt national interest in the role of management policy in American governance, inside as well as outside policymaking circles.

The unveiling of the Biden Administration’s management policy and agenda should also highlight a significant market opportunity for right-leaning think tanks. The void of bold, innovative management-policy research provides an untapped white space for think tanks aiming to make the federal government more efficient stewards of taxpayer dollars, restore trust and confidence in the nation’s capital, and return American governance to something closer to the Founding Fathers’ vision.

Improving the management policy capacity and expertise of the federal government will involve three initial steps:

  1. Developing a policy and research agenda focused on the management policy topic areas mentioned above (personnel, financial management, procurement, IT, and performance) and aimed at improving the government’s efficiency and effectiveness.
  2. Identifying scholars or professionals who have firsthand managerial experience and an interest in public service.
  3. Developing specific, data-driven, and actionable policy recommendations, guides, and playbooks for management policy officials and Congress.

By understanding and focusing on management policy, growing the reserve of intellectual capital, and building a talent pipeline with managerial skill sets, we can improve the long-term operational efficiency of the federal government and help rebuild trust and confidence in it.

What is Management Policy?

Management policy covers how bills passed by the legislative branch and actions taken by the executive branch (e.g., executive orders and regulatory rules) are implemented. As Article II, Section 3 of the U.S. Constitution stipulates, “[the President] shall take Care that the Laws be faithfully executed.” If bills from the legislature and actions from the executive are the “what” of policymaking, management policy is the “how”: it is how things get done in government.

Management policy, as defined and outlined in 31 U.S. Code § 503, encapsulates the mission-support functions that comprise the internal operations of the government, most importantly the executive branch. Mission-support functions are all the behind-the-scenes processes that must occur to ensure the successful implementation of bills and executive actions, such as financial management, personnel management, procurement, IT, performance/strategic planning, real property management, project and program management, and physical security. Implementing a bill or action means allocating money and tracking and reporting expenditures. It means hiring staff to manage the policy program, drafting and executing contracts to bring in outside expertise, and adopting technology so taxpayer resources are used efficiently and services are delivered to meet modern expectations. These support functions, while behind-the-scenes, are oftentimes direct touchpoints with the American citizen. How well they are managed—with their resultant speed, cost-effectiveness, and customer satisfaction—directly affects the American citizen.

What Is Being Managed

The size and scope of management policy includes every dollar the federal government spends and every civil servant and contract employee it employs. In the last year alone, Congress spent $6.82 trillion, significantly more than any other nation and more than the 25 largest companies on the Global Fortune 500 (by revenue). This doesn’t include the tens of trillions of dollars in other assets that the federal government manages, such as land, real property, trusts, and debts. Indeed, as of 2020, the federal government was the world’s largest or second largest:

A number of key laws and directives have been passed over the past century to improve the management and stewardship of these vast resources.

Overview of Key Laws and Regulations

Over the past 100 years, as the mission of the federal government has increased in size and scope, Congress and the executive branch have established laws and issued directives to shape policies that have fundamentally changed management practices in the federal government. These foundational laws and directives include:

These and other management policies aim to improve the stewardship of taxpayer funds, the effectiveness of the government workforce, and the efficiency and modernization of agency operations to achieve the government’s mission and service to the citizenry.

The responsibility for crafting and implementing these policies is shared across the government, from Congress to the White House to each agency in the executive branch.

How Management Policy Is Made

While the executive branch is the primary part of government responsible for management policy, Congress and the courts have an important role to play.

The Legislative Branch: Congress has a multifaceted role in management policy, whether in legislation, appropriations, leadership vetting, or oversight.

First, the House Committee on Oversight and Reform, specifically the Subcommittee on Government Operations, and the Senate Homeland Security and Governmental Affairs Committee (HSGAC) are the primary bodies for writing and passing bills on management policy as well as exercising broad jurisdictional oversight for government-wide management and operations, among other things.

Second, the appropriations process is one of Congress’s primary methods to oversee federal management policy, especially financial management. The “power of the purse,” stemming from the U.S. Constitution, Article I Section 9, stipulates that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” The federal government can only spend money expressly authorized by law, and that money must be accounted for and reported on. The Budget and Impoundment Control Act of 1974 stipulates that the executive branch cannot, without express congressional authorization, preclude congressionally appropriated funds from being obligated or spent. For major management policy entities such as the OMB, OPM, and GSA, the House and Senate Financial Services and General Government appropriations subcommittees have specific funding jurisdiction.

Third, the Senate is responsible for vetting and confirming many senior management officials, as outlined below. The Senate HSGAC has primary jurisdiction for officials at the Office of Management and Budget, which sets government-wide management policy.

Finally, the Government Accountability Office (GAO), overseen by the Comptroller General of the United States and working at the request and direction of Congress, audits and investigates the management practices of the executive branch. Congress also relies on each agency’s inspector general, who is confirmed by the Senate and reports to Congress and the agency head. Both GAO and the inspectors general regularly audit agencies’ management practices and federal programs, offering recommendations on how federal agencies can be more efficient Additionally, the nonpartisan Congressional Budget Office provides independent analysis of budgetary and economic policies or programs. There are also congressionally chartered entities that provide lawmakers with assistance and analysis on management issues, most notably the National Academy of Public Administration.

The Judicial Branch: The courts, while not directly involved in crafting and implementing management policies, serve an important role in providing judicial review of those policies and checking executive overreach. This includes its authority under the Administrative Procedure Act of 1946, which governs how federal agencies propose and enact regulations, and the scope of federal courts review of those actions. The APA also creates some quasi-judicial functions, such as administrative law judges, that technically reside within the executive branch.

The Executive Branch: In the executive branch, management policy is devised and implemented, within the existing constraints of statute and other regulations, at the president’s direction, provided in three distinct yet interrelated groups:

  • The Office of Management and Budget (OMB).
  • The General Services Administration (GSA) and Office of Personnel Management (OPM).
  • Each of the federal departments and independent agencies.

Major management policies, such as those in executive orders, are reviewed for their form and legality by the Office of Legal Counsel.

  • OMB is the government-wide general management policy body, with the deputy director for management serving as the key management policy official for the executive branch, responsible for establishing financial management and general management policies for executive agencies and performing a wide array of management functions. To aid in these responsibilities, the deputy director oversees the Office of Federal Financial Management (OFFM), Office of Federal Procurement Policy (OFPP), Office of E-Government and Information Technology (E-Gov), Office of Personnel and Performance Management (OPPM), and the US Digital Service (USDS). Relevant OMB offices outside of this division include five issue-specific resource management offices (RMOs), the Office of Information and Regulatory Affairs (OIRA), and internal support offices.
    • OFFM, overseen by a federal controller, sets federal financial management policies to improve the stewardship of federal dollars.
    • OFPP, overseen by a Senate-confirmed administrator, sets government-wide procurement policies, regulations, and practices for Executive Branch agencies.
    • E-Gov, overseen by the federal CIO, coordinates the development and implementation of IT policies—including data and cybersecurity—across the federal government.
    • OPPM, overseen by the associate director for personnel and performance management, leads policies and initiatives to improve the performance of federal agencies and the management of federal personnel.
    • USDS, overseen by an administrator, is a team of experienced digital designers and technologists from the private sector, serving for a set term, who deploy to federal agencies to fix their most pressing technological issues.
    • OIRA, led by a Senate-confirmed administrator, reviews regulations from all executive branch agencies and approves any information-collection efforts from the public via the authority of the Paperwork Reduction Act.
    • RMOs, led by program associate directors, provide for White House oversight of agency funding, rulemaking, as well as other management issues.
  • GSA and OPM provide shared management functions across the federal government, with an administrator and deputy administrator leading the former and a director and deputy director leading the latter. GSA provides a litany of general management functions for the federal government, ranging from real estate to vehicle fleet management to contracting support services to IT functions. GSA manages 377 million square feet of space in 9,600 buildings. OPM serves as the central human resources management function for 4.3 million active civil servants as well as 8 million beneficiaries of retirement and insurance programs.
  • Federal departments and independent agencies are predominantly responsible for implementing management policy. Agency deputy secretaries (or other high-level officials) assume the role of primary management policy official as chief operating officers (COO). Agency under-secretaries or assistant secretaries for management/CFO (sometimes the role is divided between two officials) are responsible for overseeing the agency’s mission support functions in financial management, procurement, human resources, and IT. These officials oversee the agency’s CIOs, chief acquisition officers, and chief human capital officers. In a unique setting, the United States designates an ambassador to the United Nations Management and Reform Section, who is responsible for improving the management practices of United Nations mandates and programs.
  • Management policy councils are formed to coordinate and implement management policies across the federal government. The most prominent council is the President’s Management Council, which is chaired by OMB’s deputy director for management and consists of the COO (usually the deputy secretary or other top management official) of each cabinet agency, the director of OPM, the administrator of GSA, and several other management officials. There are also many other councils across a wide-array of management functions including, but not limited to, the CIO CouncilCFO CouncilCAO CouncilCHCO CouncilChief Data Officer Council, and Federal Real Property Council.
  • Other White House policy councils such as the National Economic Council, National Security Council, and the Domestic Policy Council make or coordinate policies within their respective realms that often intersect with management policies.
  • Federal advisory committees, created out of the Federal Advisory Committee Act, consist of around 1,000 public-private advisory boards providing guidance or expertise on a wide-range of topics including some management practices, such as the Defense Business Board and the Cost Accounting Standards Board.

The federal government is the largest, most complex, and most expensive enterprise in the world—perhaps in all of history—and management policy dictates how it uses those vast resources to achieve its mission. While the need to set effective policies to manage the federal government may seem obvious, less obvious yet perhaps more important in the long-term are its implications for American governance.

Implications for American Governance

Though they debated fiercely among themselves during the founding era, America’s Founding Fathers would simply not recognize the role and subsequent size and scope of the federal government today. The Democratic-Republican Party, led by Thomas Jefferson, believed that a limited federal government would best preserve individual liberties and the rights of the states, while the Federalist Party, led by Alexander Hamilton, believed that only a robust and energetic federal government could foster economic growth and provide security for the nation. The “spoils system,” pioneered under Andrew Jackson, made the civil service bureaucracy purely appointed by the president’s party for 50 years. With the Pendleton Act, which created a merit system to appoint federal civil servants, the foundation of modern American bureaucracy was created.

Through the 19th century, the size and scope of the federal government was constrained by America’s Jeffersonian tradition and recurring debates over states’ rights, from the Alien and Sedition Acts of 1798, to the Nullification Crisis of 1832, to the Civil War and Reconstruction. This balance was upended in the early 20th century with the passage of the 16th Amendment (establishing an income tax), World War I, the Great Depression, and World War II. In particular, the federal programs of President Franklin Roosevelt’s New Deal—as well as programs from his successors—paved the way for the vast, centralized federal bureaucracy we know today. With America’s rising industrial base and post-World War II economic boom, as well as the escalating threats of the Cold War, there was little appetite for a return to Jefferson’s vision of an idyllic agrarian republic.

Yet, even with the differences between the Jeffersonian and Hamiltonian traditions, it would be hard to imagine any of the founders endorsing the system we’ve ended up with: a sprawling, ineffectual administrative state that concentrates wealth and power in the nation’s capital and all too often circumvents democratic oversight mechanisms, preventing true accountability to the people or their representatives.

Because of the oversized role of the executive branch, the need for management expertise is more pronounced than ever—even if you’re a small-government Jeffersonian. Developing managerial policies and skills is essential to efficiently manage these vast resources, competently execute government programs, and adeptly respond to emerging challenges and crises requiring federal government intervention. How well the government is run is one sign of its competence, giving the people trust and confidence in its ability to wisely spend their money, faithfully implement the laws passed by the representatives of the people, and do the things the people expect to be done. Ineffective management policies can create conditions for a culture of waste, fraud, and abuse; usher in processes so opaque and byzantine it’s nearly impossible to accomplish anything within reasonable and predictable timeframes and budgets; create a civil service that’s insulated from and unresponsive to the citizenry; lead to contracting decisions that invite cronyism and wealth concentration among the few largest companies; and use IT that’s so outdated yet so expensive it becomes discredited as a tool of public administration.

Only through wise management policies, crafted and implemented by careful and prudent policymakers and practitioners, can such a behemoth of an enterprise as the federal government be run efficiently and honestly. Sound management policies help build citizens’ trust and confidence in the government not only to conduct routine business but also to quickly adapt to emerging challenges and imminent threats.

Conclusion and Recommendations

Americans should care about management policy because there’s a lot at stake for our nation—in both the near-term and the long-term.

In the near-term, we should care about management policy for the sheer size and scope of what it encompasses. We should care about how trillions of hard-earned taxpayer dollars are spent. We should expect our elected officials and our civil servants to be good stewards of those dollars. We should expect that vital government services are delivered efficiently. We should expect that our government gets things done on time and within budget.

However, in the long-term, we should want to have trust and confidence in our federal government to not only do well the things the people expect it to do but also to operate within the vision of our Founding Fathers to preserve our liberties and protect our rights. A federal government that cannot efficiently implement bills passed by Congress causes people to lose trust and confidence in both Congress and the executive branch. A government so large and complex, so concentrated in a distant capital, that wrests more and more decision-making authority from the people, is one that no longer resembles the republican model that our founders envisioned.

Modern Republican administrations have recognized this challenge. President Dwight Eisenhower applied his expertise in management to leverage the newly formed National Security Council as the primary White House mechanism for managing national security policy. President Richard Nixon attempted to reorganize federal departments and agencies during his administration, but his attempts ultimately failed in part due to the Watergate scandal. President Ronald Reagan pursued a series of management reforms to increase the efficiency of the federal government consistent with his conservative governing agenda. In 2000, George W. Bush campaigned on the issue of reforming the federal government and issued an aggressive management agenda in 2001, which included establishing a process for OMB to assess federal agency program performance. Donald Trump famously promised to “drain the swamp” during the 2016 campaign and attempted to rein in the administrative state.

As these efforts show, managing the federal government has long been recognized as a priority for conservative governing. But the federal government cannot be reformed, streamlined, or made smaller and more accountable to the American people without a governing strategy and qualified personnel to implement it. For this reason, today’s conservatives need more expertise in management policy. Experience from the Trump Administration shows that conservatives need to be prepared to assume office with a fully defined management reform agenda and with the knowledge of how to savvily navigate the bureaucracy to implement it. They need to engage in more serious study and scholarship, and develop training programs to build a stronger bench of management talent. Without thorough research and specific policy white papers and playbooks, incoming management policy and operations leaders, who mostly come from the private sector without operational knowledge of the federal government, will continue to face a steep learning curve before they can develop and implement their governance agenda. Focusing on how the federal government manages its human, financial, and technological resources may not seem as captivating as other domestic or foreign policy topics, yet it is fundamental to the functioning of a competent, efficient, and responsive government. And it is essential for the implementation of policies in all other areas.

This presents a great opportunity for conservative-leaning policy research organizations and philanthropies. The void of bold, innovative management policy research provides an untapped white space for think tanks aiming to make the federal government more efficient stewards of taxpayer dollars, restore trust and confidence in the nation’s capital, and return American governance to something closer to that envisioned by the Founding Fathers. Building a management policy capacity will allow any such organization to make an immediate yet far-reaching impact and can be done in three steps. Cultivating a talent pipeline of right-leaning management professionals with both private sector managerial expertise and practical knowledge of government management processes will allow them to seamlessly implement a management reform agenda upon assumption of office.

The first step will be developing a policy and research agenda focused on management policy topic areas (personnel, financial management, procurement, IT, and performance) and aimed at improving the government’s efficiency and effectiveness. Most major management policy laws and directives are well over 20 years old and need to be updated in light of major changes that have unfolded in American society since then. Technological advancements, in particular, have opened a whole realm of possibilities for changing the nature of how the federal government is managed; the laws should be updated to reflect these new capabilities. A good start is the CFO Act of 1990 and the GPRA of 1993.

The second step will be identifying and training scholars or professionals who have firsthand managerial experience and an interest in public service. One idea is for right-leaning think tanks to offer a term-limited fellowship to entrepreneurs, small business owners, or business or technology executives (and mid-career managers) from the private sector to learn and study government management policies and processes and generate scholarship that offers transformational ideas to improve operations. For example, a supply chain executive at a large company with a complex international logistics footprint could study how the government procures goods and supplies and apply the latest thinking from the private sector to government operations. This would not only generate much-needed intellectual capital from experienced management professionals but also create a talent pipeline of future management policy officials who already have insight into the complex managerial policies and processes before they begin their tenure in the government. Another approach would be to directly place people in government through hiring authorities such as the Intergovernmental Personnel Act, or through congressional fellowships.

The third step will be developing specific, data-driven, and actionable policy recommendations, guides, and playbooks for management policy officials and Congress. Because many management officials in the executive branch tend to come from the private sector without deep knowledge of federal management policy, these documents will help them get up to speed quickly and truncate the learning curve. For Congress, such guides would help members and their staff or the committee staff, many of whom do not have substantial business management experience, bridge the gap between the latest management thinking from the private sector and the need to update management policies.

By understanding and focusing on management policy, growing the reserve of intellectual capital, and building a talent pipeline with managerial skill sets, we can improve the long-term operational efficiency of the federal government and help rebuild trust and confidence in it.

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