So You’re State Capacity Curious…
The unglamorous fight to make government capable, why it matters for every policy area, and what you can start doing about it.
Jackson Gode is Inclusive Abundance’s new Manager of Government Affairs, responsible for leading our work on government effectiveness, AI, and innovation. If you’re interested about being a partner on these issues, please reach out.
Earlier this month, New York City Mayor Zohran Mamdani unveiled the Public Interest Technology (PIT) Crew that will deploy teams of technologists to tackle public problems with in-house digital solutions. Meanwhile in Albany, Governor Kathy Hochul announced her “Regulatory Reset” initiative, which will use AI tools to identify outdated regulations in state code, such as requirements to notify state agencies by fax and telegram. And in North Carolina, Governor Josh Stein recently signed the bipartisan Public Workforce Modernization Act, a major overhaul of a 50-year-old human resources system.
With public opinion of government institutions at an all-time low, lawmakers are finally recognizing the importance of government reform work that will improve their constituents’ lives. As someone who’s been working on these issues for a decade, I find this a thrilling shift. But if you’re newer to the field or have just started to notice some of these changes, you may have some questions. Here’s what state capacity means, why it’s having a moment, and what you can do about it.
What is state capacity?
Put simply, state capacity is about whether the government can effectively do what it intends and make public institutions work better. “State” in this context means “the state,” as in government itself, not state governments. This concept can also be referred to as “government effectiveness,” “government reform,” and even “government efficiency.” While each of these terms may conjure a different political reaction, the underlying areas of policy they reference are, for the most part, all the same.
At Inclusive Abundance, we use the term “government effectiveness” to refer to a range of policy issues focused on making government work better. These issues include, but are not limited to:
The people government hires and how the public sector workforce is managed;
Whether agencies have the funding and technology systems necessary to implement laws the way Congress wants them to;
The procedures and processes that determine whether infrastructure projects ever break ground;
How the government collects, protects, and uses its data to deliver benefits and provide services to the public; and
The expertise and capacity of Congress itself.
Why now, and why you?
Government effectiveness has become a hot topic for a reason: policymakers have finally woken up to the fact that this issue is deeply interwoven with their ability to deliver, stay popular, and win elections. This is particularly true for Democrats, the party arguing that government should do big things. One of Democrats’ main takeaways after they lost ground in 2024 was that the Biden Administration’s historic legislative wins were popular in theory, but their benefits were too slow to reach people – you can’t campaign on broadband that was never connected.
Without major state capacity reforms, that could happen again.
For instance, Congress recently passed the 21st Century ROAD to Housing Act, a major win for housing supply and the abundance movement. As Marci Harris of POPVOX Foundation notes, the bill comes with a massive implementation to-do list, much of which will require investments in the federal workforce, new data reporting requirements, and pilot programs to test novel solutions to increase housing supply. Unfortunately, many lawmakers are already concerned about the bill’s implementation because of recent cuts to the Department of Housing and Urban Development that may impair the agency’s ability to quickly issue new rules the legislation requires.
Beyond new legislation, more and more people are recognizing that the laws, regulations, and policies across government often create a web of inaction that prevents basic benefits and services from being delivered efficiently. In practice, this means Americans experience buggy government websites, delayed SNAP or unemployment benefits, and confusing forms that keep them from getting the assistance they need. Over time, that friction erodes trust in government – which, as we’ve seen, leads to some pretty disastrous consequences for our democracy.
If the government cannot create positive outcomes – or delivers them poorly – legislative wins like ROAD or any major expansion of services will not amount to much and could keep feeding the decline in trust in government. As Kevin Hawickhorst of the Foundation for American Innovation puts it, “when agencies cannot administer the programs Congress creates, laws become merely expressions of intent, and the bargaining that produces them ultimately proves to be fruitless.”
So how do we improve state capacity?
Government effectiveness problems can be wildly difficult to understand and take years to master. And as anyone who works in this space would admit, we aren’t particularly good at making these issues accessible to a broader policy audience. (Check my former colleague Mary Monti’s brilliant write-up of this dynamic when it comes to federal hiring!) But that shouldn’t stop anyone from trying.
If you work on policy at the federal level and you want government to actually deliver, this is where to start:1
Make sure what you ask for maps to the outcome you want. Define the ideal outcome a bill should produce, then work backward to identify what data will prove it happened. And ask for the agency’s input on those measures while you’re still drafting.
Check whether the agency can actually do the job. Before a bill passes, ask the agency whether it has the staff and resources to carry out what the law requires. If it doesn’t, build an appropriations plan so the parts that require implementation get funded. Sometimes that means funding central agencies like the Office of Personnel Management.
Talk to the experts who actually build the systems. Work with the agency’s data and tech staff to make sure the tools and data they need are both authorized and funded. That means going past the congressional affairs staff who may not have the expertise to speak to technical needs.
Look for what you can cut. Removing or streamlining laws can be just as powerful as creating new programs or layering on new requirements. Ask whether a statute is out of date, no longer relevant, or in conflict with others. Giving agencies clear directions and signals is critically important in a world of scarce resources, fewer employees, and endless to-do lists.
Be wary of exceptions and carve-outs. If a program is too hard for one group to access, what does that say about the program as a whole? Exceptions and carve-outs can feel like easy solutions, but simplicity, while sometimes harder to achieve politically, makes successful delivery far more likely.
Before adding a mandated report to Congress, ask whether anyone will read it. The federal government has lost over 250,000 employees in the past year, and the staff who’d have to answer such requests are often the same folks trying to implement legislation. Reports have value, but consider the burden being placed on executive branch staff before asking for more. A congressional briefing, the annual budget request, or data dashboards could do the job instead.
Fair warning: the ultimate goal is still transformational change (abundance).
While the steps shared above are a great way to get on the government effectiveness bandwagon, these ideas really only scratch the surface for the scale of reform that is ultimately needed. The harder truth, as Jennifer Pahlka lays out in her Substack on her three horizons framework, is that lasting change means moving past incremental fixes toward bigger, structural solutions – the kind that can completely transform the way government operates today. Getting there won’t be the work of a handful of technical experts, but will take people across the policy world pushing in the same direction.
If you create policy, advise on it, report on it, or fund the organizations pushing for reform, state capacity is your issue too. The benefits of our gold-standard housing bills, our boldest permitting reforms, or our most ambitious climate or health investments won’t be felt by Americans if our government can’t actually deliver them. An abundant future depends on treating government not as a technicality for someone else to handle, but as the foundation for everything we hope to build.
So if this post left you even a little state capacity curious, don’t let the feeling pass. The work is hard, but reform done right is one of the highest-impact opportunities in policy today.
This list of suggestions is most relevant to congressional staff and others supporting policy work at the federal level. If you are a funder supporting this work, a member of the press, or someone who works at the state or local government level, there is work you can do too – reach out to learn more!
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State capacity is the ur-issue, the coefficient in front of literally all policy ideas and indeed, literally every vision for a thriving country. Love to see a compelling vision laid out here!