Classical liberalism entails not only a view about the proper scope of government and its relationship with the market but also a distinct theory about how government should operate within its proper area. This book presents the basic governance theory and political economy principles underpinning this vision. Building upon the works of diverse authors such as Friedrich Hayek, James Buchanan, and Vincent and Elinor Ostrom, the book offers a profound challenge to how public governance is commonly understood, by shifting the focus along several dimensions. First, it challenges the technocratic-epistocratic perspective in which social goals are set and experts simply provide the means to attain them. Instead, the focus is on the diversity of opinions in any society regarding “what should be done,” and on the design of democratic and polycentric institutions capable of limiting social conflicts and satisfying the preferences of as many people as possible. Second, the book explains the knowledge and incentive problems associated with technocratic-epistocratic governance. This has deep implications for how public governance itself should be construed. The book’s three parts reconstruct the theoretical foundations of the position, then explore its nature and development at the interface between public choice and public administration, and finally illustrate via a set of concrete governance issues how it operates at the applied level. The book thus fills a large gap in the academic literature, as well as the public discourse, about the ways decision makers understand the nature and administration of the public sector.