To operationalize the product model, you have to speak budget

And how the US can double down on the "systems that benefit everyone but belong to no one."

Digital Public Infrastructure is a framing I don’t commonly use, though it’s the key way my friend and colleague David Eaves talks about work that is closely connected to my interests. It can include technology and processes that span beyond the public sector, but for our purposes in the US, a perfect example is digital identity. The ability to verify who someone is online in a reliable, secure, low-friction way is a foundation for almost everything government does digitally: benefits eligibility, healthcare access, licensing, tax collection, procurement. It is also, in most countries, a fragmented disaster. The UK had 44 different identity verification systems in 2025. South Africa has eight national data exchange platforms operating in isolation. In the US, only 23 to 34 percent of Paycheck Protection Program funds reached workers actually at risk — partly because the data systems that might have caught fraud didn’t talk to each other. (The paper cites what seems like a credible source on this, so I’m repeating it – I had not heard those numbers before!)

The problem is that no single agency’s budget can fix this. These shared systems — digital identity, secure data exchange, real-time payments infrastructure — aren’t anyone’s capability. They’re foundational inputs to every agency’s capabilities. In a new article in Finance & Development Magazine, David, Diane Coyle, and Beatriz Vasconcellos argue that they should be thought of, funded, and governed the way we think about roads and power grids: as infrastructure. They should be long-lived, cross-cutting, publicly governed, and designed for reuse across sectors and agencies and even across time.

It’s telling that this article is aimed at finance ministries around the world, not digital leaders. Digital ministries typically know what shared infrastructure is needed, but they lack the budget authority and cross-governmental leverage to actually build and sustain it. (To be fair, they are not consistently fans of DPI. If they’ve spent their careers trapped in the dysfunctions of legacy government IT, they may not trust that a central office can deliver something that will work for their particular needs, and proving that it can can be a bit of a chicken and egg problem.) But finance ministries have that authority. What they’ve mostly lacked is the framework — and the willingness — to use it. A finance official they interviewed put the structural problem exactly right: “There’s no category in the budget for systems that benefit everyone but belong to no one.”

Of course, that’s why here in the US we have GSA, and particularly the Technology Transformation Service, home of still nascent (after many years) cross-government platforms like login.gov. It’s been a long, hard road for login. I won’t go into its epic history here, but the news that TTS will now report into federal CIO Greg Barbaccia (or rather, he’ll now be dual-hatted as acting TTS director) gives me hope. Having TTS separate from OFCIO has always made a coherent strategy for infrastructure challenging. I think Barbaccia is serious about leapfrogging digital into the current era, and the fact that he’s committed to investing in login.gov is a sign he’s taking a practical, thoughtful approach. May Congress trust his leadership and budget appropriately for our “systems that benefit everyone but belong to no one.

But Congress also needs to learn this same lesson at the agency level. David’s article reminded me of the great work by Solitaire Carroll, who pioneered something called capability-based budgeting during her time at the Department of Veterans Affairs, and has written about this for the Niskanen Center. The idea sounds technical, and the implementation absolutely is, but the underlying diagnosis is simple: the federal government funds technology by tying dollars to systems, programs, and organizational boxes on a chart. If Congress appropriates money for a claims processing system, that’s what the money is for: that specific system. Not “the VA’s ability to process claims,” which might involve a dozen systems, some legacy, some modern, some in between, plus the people who maintain them and the teams who improve them. Just this one bucket, with this one label, which a given oversight committee may have decided should exist for its own reasons.

The result is that the actual capability — the thing veterans need — can’t be funded or managed as a coherent whole. You can’t ask “how much does it cost us to process a claim?” in any meaningful way. You can’t make sensible tradeoffs between investing in a legacy system and replacing it, because the dollars aren’t organized to allow that question. The money is locked into boxes, and the boxes are organized around org charts and appropriations history rather than around what government is actually supposed to do.

Solitaire’s solution — tested at VA with hard-won real results — is to reorganize IT investment around enduring capabilities: eligibility and enrollment, claims processing, benefits delivery, and so on. You identify what the agency is responsible for delivering, group all the systems that contribute to that delivery, and start asking “how much for claims processing?” instead of “how much for System X?” Capability-based budgeting is product funding operationalized. The two concepts say the same thing: we need to fund ongoing capabilities, not static things. What Solitaire has done is figure out how to actually do that inside a federal budget process that’s not designed for it.

If it sounds straightforward. It is not. It requires convincing appropriators, OMB, and internal stakeholders to think differently about categories of spending they’ve been managing the same way for decades. Solitaire’s work at the VA involved not only lots of education of a wide range of stakeholders, but also astonishing feats of reprogramming — complicated, detailed work to get money appropriated in one mindset to function in another, and serve the purpose it should. This is thousands of hours of work that should not be necessary. But at least this reprogramming is possible, and the VA case study shows it.

We’re going to have a lot of work getting appropriators, OMB, and internal stakeholders to think differently in the coming years. Carroll’s reform can in principle be driven by a single motivated CIO working within existing budget structures. It could spread from agency to agency as a best practice. But I think we’ve run out of time for the kind of retail approach, given the range and scale of disruption government must now contend with: workforce changes, budget constraints, and, of course, AI —not just the mandate to adopt it for public sector use, but the way it will shape the needs government must meet. (We might also mention crises like the war in Iran, which will dramatically increase the national security needs the DoW must meet.) What the Coyle/Eaves paper calls for isn’t so much a management reform, but a political and institutional one. In an international context, they are calling for finance ministries to proactively coordinate across independent agencies — to assert a strategic, cross-governmental role in digital investment that most of them have never played. Here in the US, we have the seeds of that, but there is enormous work to change the conditions under which platforms like login operate. That will look like specific reforms of the kind Solitaire and David call for, but underpinning those reforms is the challenge of getting the people who write the checks and hand out the grades to think differently about their roles and adopt a new vision of what good looks like.

What changes about their roles? For one, how they evaluate investments. The value of shared digital infrastructure comes precisely from the fact that it enables things beyond any single agency’s mission — including things in the private sector, things we can’t fully predict in advance, things that don’t show up in any cost-benefit analysis conducted at the point of investment. Malawi improved its credit markets by introducing a biometric identity system because lenders could suddenly verify borrowers more reliably. That outcome wasn’t in anyone’s project justification. Standard investment appraisal, Coyle and Eaves argue, is simply the wrong tool for evaluating these investments — built for physical infrastructure, it misses spillovers, long-term market effects, and distributional consequences almost by design.

But deeper than that, those who hold the purse strings must grapple with the misconception that governing is fundamentally about mandates and constraints. When I am asked for my advice on how to make an underperforming agency or team do better, I am usually being asked for mandates and constraints someone in a position of authority (exec or leg branch) can impose on an agency. It is the wrong question. These implementers are groaning under the weight of decades, even centuries, of mandates and constraints that have always been added, and never subtracted. We (the public, Congress, watchdogs) want agencies to do things, but have created an operating environment in which it is a miracle they can do anything at all. Adding more mandates and constraints only makes it worse.

But there is a different way to approach the problem of agency effectiveness. Instead of adding, subtract. What are they doing today that they no longer need to do? What is hard for them to do that you could make easier by removing constraints? If you want an agency that’s responsive to the needs of the moment, you have to work in an enablement and capacity building framework. Investment in common infrastructure that will benefit them is another form of enablement and capacity building.

This idea gives lots of leaders the willies. It sounds like a loss of control, where control over the agency is the point. But they also know that the control they seek is an illusion today; they are frustrated that what they ask for and what they get are two very different things. Maybe the way to think about it is to return to the metaphor of a Rube Goldberg machine, which I’ve invoked frequently. Every time you add another mechanism, it can feel like added control, but if you pull back, you’ve created a system so complex, fragile, and bespoke that it’s a miracle when it works. Troubleshooting these systems becomes exhausting. If you want to put a nail in the wall, maybe just use a hammer directly.

Accordingly, if you want to verify who someone is online in a reliable, secure, low-friction way to enable almost everything government does digitally (benefits eligibility, healthcare access, licensing, tax collection, procurement) maybe just have a fit-for-purpose digital identity platform. If you want to the VA to be able process claims, maybe just give them money to build that capability. “Just” here doesn’t mean without reasonable controls and accountability, but it does mean getting back to basics and shedding some of the unnecessary cruft, complexity, and indirection. Requiring agencies to budget separately for building a system versus operating and maintaining (and not use money intended for one for the other) it is a great example of a control that entirely backfires and should be put out to pasture. There are many others.

We need new infrastructure if we want a government capable of meeting our country’s needs – needs that are accelerating and changing as the world around us experiences disruption of many kinds. That infrastructure will come in the form of common platforms, as Beatriz, David, and Diane suggest, and in the form of common sense capability-based budgeting and appropriations, as Solitaire has shown. But it will also come in the form of reformers working upstream of their previous efforts, changing the outcomes we get by changing the way we budget for and oversee investments. And it will come in the form of an evolving understanding of what governing needs to look like in the second quarter of the twenty-first century. The problems we face cannot be solved with the thinking that created them. Investing in that new thinking will be the most profound infrastructure investment we could make.