This chapter's working assumption is that proper problem definition can yield major budgetary savings and improved delivery of services to policy clients. Policy problems are sets of unrealized needs, values, or opportunities for improvement, attainable through public action (Dunn 2008, 3).An important point often lost in discussions of this subject is that policy problems can be either new or ongoing. Failure to define problems properly is like providing incentives to the wrong group to improve program performance (e.g., providing incentives to flight attendants, who really have no control over passenger baggage and flight on-time performance, issues that are basic to solving an airline's profitability problems). More precise definitions of the problems and specification of the levers that can be manipulated to deal with them before hand can avoid wasting resources and generating public frustration with governmental action. Skillful problem definition can also lead to fiscal savings that, properly reprogrammed, will increase net assistance to the intended beneficiaries of public programs and projects.