Public policy analysis is crucial for developing good policy because, among other things, it helps policymakers allocate public funds efficiently. This is another way of saying that public policy analysis helps us prevent money from being wasted. Given the vast scale of public spending, even modest improvements in how funds are allocated can justify the cost of policy analysis.
This does not, however, mean that public policy analysis is without cost. Federal, state, and local governments across the United States spend a significant amount of money on public policy analysis every year with the goal of making more effective and more cost-effective public policy.
What does the federal government spend on public policy analysis?
The agency in the federal government’s policy analysis ecosystem with the largest budget is the United States Census Bureau, which has a current budget of about $1.5 billion. The Trump Administration has requested an increase in this budget to about $2 billion in anticipation of the lead up to the 2030 Census. The Census Bureau is not technically a policy analysis agency: it is focused mainly on data collection. The data it collects, however, is key to policy analysis across the federal government, and also for policy analysis at the state level, local level, and in private-sector organizations. Although its data has applications that go far beyond public policy analysis, it could be chalked up as a key input for public policy analysis in the United States.
The second-largest of these analysis-focused agencies is actually a quite specialized office: the Millennium Challenge Corporation, which has a current budget of $830 million. The Millennium Challenge Corporation is a free-standing agency formed through bipartisan legislation in 2004 to support sustainable economic growth and poverty reduction in developing countries. I first encountered the Millenium Challenge Corporation at a 2019 meeting of the Society for Benefit-Cost Analysis, where I learned that many analysts at this agency were conducting benefit-cost analyses of investments in foreign aid. Most of the funds for this agency go to programs, though, not policy analysis.
The largest of the pure policy analysis agencies in the federal government is the Government Accountability Office, which currently has a budget of about $810 million. The Government Accountability Office is the supreme audit institution of the United States federal government, in charge of ensuring federal funds are spent efficiently and effectively, investigating allegations of illegal use of public funds, reporting how well government policies are meeting their objectives, performing policy analyses, and a range of other charges.
The largest policy analysis institution within a federal agency is the Department of Education’s Institute of Education Sciences, which is currently funded to the tune of $770 million. It is the statistics, research, and evaluation arm of the Department of Education. The Trump Administration has proposed reducing its funding to about $260 million as part of its broader effort to cut the Department of Education's budget.
Another key federal statistical agency is the Bureau of Labor Statistics, which is the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics. It is currently housed under the Department of Labor and has a budget of $640 million. The Bureau of Labor Statistics is closer to the U.S. Census Bureau than it is to the Government Accountability Office, in that it is more focused on collecting statistics that are used by other agencies for policy analysis than it is on analyzing policy itself.
Beyond these largest analysis agencies, several others have annual budgets between $120-$140 million. The Congressional Research Service ($140 million), Energy Information Administration ($140 million), Office of Management and Budget ($130 million), HUD Policy Development and Research Office ($120 million), and Bureau of Economic Analysis ($120 million) each have budgets in this range. Other key agencies like the Economic Research Service ($91 million), Congressional Budget Office ($75 million), Department of Justice Research, Evaluation and Statistics Account ($55 million), Joint Committee on Taxation ($14 million), and Council of Economic Advisers ($5 million) all have budgets under $100 million.
All accounted for, these appropriations add up to a total of about $5.5 billion.
Compare this to the total of all federal spending. The Congressional Budget Office estimates the federal government spent about $7.4 trillion in Fiscal Year 2026. That means total policy analysis expenditures made up less than $1 for every $1,000 spent by the federal government that year.
What is the right amount of spending on policy analysis?
In Results for America’s book Moneyball for Government, a bipartisan group of analysts recommend each department in the federal government set aside 1% of department funds for evaluation of public policies. If we use this for a benchmark, then the federal government’s spending on evaluation in the agencies listed above only make up about 7% of recommended spending on evaluation.
We can quibble about the definitions of evaluation versus policy analysis, data infrastructure versus core policy analysis work, and specialized policy analysis versus backbone policy analysis that supports the federal government as a whole. But no matter what way we slice it, there seems to be space for more policy analysis in the federal government, and it would be likely to pay for itself in savings to the federal government budget, especially if it were deployed in a thoughtful way.
This is not even to touch on state and local government. As underinvested as the federal government is in policy analysis, state and local governments often have even less institutional capacity and conduct less policy analysis overall. I would like to dig into policy analysis done by state and local governments and the private sector, but this blog post is already getting a bit long, so I will leave those questions for another time. For now, suffice to say that policy analysis is not especially costly in the context of overall public sector spending.
