The Founders designed our institutions with a discernible logic, but at first glance, that logic is often not apparent in the politics that drive American policy. Except in rare cases of national consensus brought on by war or economic crisis, legislation from both Washington, D.C., and state capitols may seem illogical and piecemeal, with limited ability to resolve policy challenges. Rarely does a single solution dominate all others. The concepts of collective action provide insights into the sources of policy problems, point to possible solutions, and help explain why agreement on those solutions can be such a challenge to reach.

While policymaking in our decentralized political system is not easy and indeed is frequently combative, talented and effective leaders can uncover ways to move government in their desired direction using strategic, collective action logic that relies on an understanding of the policy dynamics at play and the mechanisms of U.S. policymaking institutions. Any legislation will have policy winners and losers when societal goals are at odds with individually rational actions. Understanding collective action logic can help us identify when a policy problem is heading for a successful solution or when a proposal is likely to fail.

Through a series of in-depth examples, this chapter illustrates the principles of institutional design at work in U.S. policymaking. It focuses on five areas of policymaking in response to collective action problems: efforts to stop free-rider problems in health care; the challenges of slowing climate change in a tragedy of the global commons; attempts to keep the federal budget from falling over a cliff while balancing politicians’ transaction and conformity costs; compromise measures for entitlement reform that continually face the prisoner’s dilemma; and collective action logic leading to successful tax reform. These cases demonstrate the trade-offs between solving an old problem and creating a new one, as well as the strategic dilemmas faced by political actors who care both about reforming the political process and about advancing their own policy goals and political careers. They help us see how policy ideas are worth considering, debating, and sometimes putting into practice.