The "School of Good Governance and Policy Analysis" was established by Government of Madhya Pradesh in September 2007. To achieve wider objectives, the "School of Good Governance and Policy Analysis" was reconstituted as the "Atal Bihari Vajpayee Institute of Good Governance and Policy Analysis" in October 2014. The institute is a registered society supported by the Government of Madhya Pradesh. The Governing Body of the institute is chaired by Chief Minister of Madhya Pradesh. The Executive Body is headed by the Director General of the institute.

The institute aims to develop into a knowledge hub with the purpose of i) facilitating a multi-desciplinary network of governance; ii) recognising and promoting research for improvement in governance practices globally, while maintaining a focus on Madhya Pradesh.