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Higher Education Governance
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The Research: A New Analytic Model of State Higher Education Governance Systems

Can existing state higher education systems meet the challenges of a new century? Elected leaders have responded to this question by showing new interest in the performance of their higher education systems. Many have called for restructuring by using terms that echo the language of the corporate and governmental sectors. Restructuring proposals have ranged from discontinuing statewide coordinating or system governing boards to creating new ones. Our seven-state study observed no clear trends in the kinds of restructuring taking place, as states approach similar problems with widely different solutions. Indeed, this absence of trends or patterns in state restructuring convinced us of the need for a deeper understanding of how performance and system design are related.

The Seven-State Comparative Study
Our study defined a state system of higher education to include elected officials, executive and legislative agencies, and state procedures for regulation and finance, as well as public and private postsecondary colleges and universities. The purpose of the study was to improve understanding of how differences in state governance structures affect performance. We also wanted to explore how governance structure affects the strategies that state policy makers devise as they encourage institutions to respond to contextual change and new state priorities.

The criteria used to select the study states were designed to minimize differences among participants in terms of size and diversity of student populations, and to maximize differences in structure. The seven states selected (California, Florida, Georgia, Illinois, Michigan, New York, and Texas) were among the top 20 in the nation in terms of both the size and diversity of their student populations. Between September 1994 and September 1996, we collected documents, examined archival data, and conducted interviews. Over 200 individuals were interviewed: members of governors' staffs; state legislators; members of higher education coordinating or governing boards or commissions; current and former state higher education agency officials; state budget officers; legislative budget analysts; trustees, presidents, and staff at the campus, subsystem and system levels; and representatives of faculty organizations. In addition to our review of all available documentation, Kent Halstead of Research Associates of Washington was commissioned to identify the principal operating variables for state-level public higher education systems, and to comment on these for the seven states in the study. Case studies integrated all sources of data for each state, and were reviewed for accuracy by knowledgeable insiders in each state.

Traditional Examinations of Governance Structures
The nature of the state role in governing higher education has been the subject of debate in the higher education literature for the last 40 years, as reflected in the widely varying approaches states have taken to organizing their higher education systems. The question has typically been framed as one of institutional autonomy versus state authority, or centralization versus decentralization.8 After World War II, concern about institutional autonomy focused on the state agencies that were established primarily to manage enrollment growth. As a result, the generally accepted taxonomies have distinguished three basic types of state structures: consolidated governing boards, coordinating boards and planning agencies.9

Consolidated governing board states have legal management and control responsibilities for a single institution or a cluster of institutions.10 Twenty-four states have consolidated governing boards. Twenty-four coordinating board states assign responsibility for some or all of nine functions (planning, policy leadership, policy analysis, mission definition, academic program review, budgetary processes, student financial assistance, accountability systems, and institutional authorization) to a single agency other than a governing board. Two planning agency states, Michigan and Delaware, do not have an organization with authority that extends much beyond voluntary planning and convening.11

Our study revealed that these three designations, despite their earlier usefulness, are now insufficient for examining the relationships between public policy and the state systems that overarch individual institutions. The most comprehensive efforts to classify differences in these ways fall short of capturing the full complexity of state structures during a period of change, particularly those structures in the more populous states. A new conceptual framework is needed, we believe, one that can account not only for the uniqueness of each state's higher education structures, but also for each unique state public policy environment.

Our study addressed policy issues and complexities by considering the historical, economic, political, and demographic context of higher education in each state--by explicit attention to such factors as the constitutional powers of the governor,12 the various roles of the legislature and state higher education agencies, and the public and private, two- and four-year institutions in the state. As a result, we formulated a more complex and accurate model for analysis.

A New Conceptual Framework
Traditional classifications of higher education structures define systems along a single dimension that contrasts centralization and decentralization--in other words, in terms of an institution's autonomy in relation to the state. The focus of most discussion has been on the state agency and the powers exhibited by that agency. While this is an important dimension, we have come to believe that additional structural relationships need to be addressed. Our study suggests that state governance structures must be considered in at least two ways. First, the policy environment determines the role that state government plays in balancing the often competing influences of professional values on the one hand and the market on the other. Second, the system design or structural environment includes the decisions that states make in designing their higher education systems.

Policy Environment
The distribution of authority between the state and higher education ultimately reflects the interests articulated by groups both inside and outside of government, as these interests are realized in public policy and policy priorities. The higher education system in each state operates in a policy environment that is the result of balancing--or altering the balance among--the sometimes conflicting interests of academic institutions and, as we define it, the market. Each state--and each state is unique--balances these influences according to its own policies and priorities; there is no ideal or permanent balance.

The interests of academic institutions are familiar influences in the history and literature of higher education policy. Our use of "marketä forces is not. The "market," for our purposes, is the broad array of interests and influences that are external to the formal structures of both state government and higher education. Our concept of the market is thus much broader than that of economists. It does include economic influences, such as competitive pressures, user satisfaction, and cost and price. But it also includes other quantifiable factors such as demographic characteristics and projections, and less quantifiable influences such as political pressures, public confidence, and the availability of new technologies.

Our understanding of state policy environment draws upon the work of Gareth Williams in the area of higher education finance. Williams defines the role of government in shaping the way market forces and professional values influence the delivery of higher education services.13 Under Williams' model, the role of the state changes as the competing claims shift among state, market and academic interests. Among the state roles Williams describes are promoter, referee and consumer supporter.

In reconsidering higher education governance, our study identified four state policy roles along a continuum from state-provided higher education to the state-as-consumer role described by some advocates of privatization. The state as provider subsidizes higher education services with little regard for the market, as we define that term. As regulator, the state specifies the relationship between institutions and the market by controlling user charges, constraining administrative discretion in using resources, and generally managing institutional operations. As consumer advocate, the state directs some funding for higher education to students, thereby increasing the influence of their market choices on institutional behavior. A state engages in steering by structuring the market for higher education services to attain outcomes consistent with governmental priorities.14 The inclusion of private higher education institutions in the design of state systems is one example of steering, as are vouchers that students may use to purchase approved services from any provider.

All states exhibit some characteristics of each of these four policy roles. Although one role will typically dominate more than others (for instance, the state may tend to lean more towards the market than to the institutions), the schematic model represents a continuum, not four distinct types.

System Design
The second dimension of our conceptual model is system design, or the structural environment. States make four kinds of decisions when they design systems of higher education:

  1. Decisions about governance structures establish lines of authority and accountability between state government and providers.

  2. Decisions about mission divide responsibilities for achieving higher education goals among types of institutions.

  3. Decisions about capacity determine the availability, quality, and location of educational programs and services.

  4. Decisions about work processes effect important day-to-day governance and administrative practices, including: (1) collecting and disseminating information about performance; (2) prescribing the framework for budgeting; (3) allocating responsibilities for monitoring program quality and redundancy; and (4) providing arrangements for encouraging higher education institutions to see themselves as a system and to work together on such tasks as school-to-college transitions and student transfer.

Our study led us to characterize state governance structures for higher education systems as segmented, unified, or federal. In the most segmented systems, multiple governing boards are each responsible for one or more institutions. There is no effective state agency with substantial responsibility for all higher education. State government reserves only the power to determine the appropriation each institution receives each year. Each governing board and its appointed executive represent institutional interests directly to state government through the budgeting process. Four-year institutions and community colleges may each have their own separate arrangements for voluntary coordination to identify areas where they are willing to cooperate in dealing with state government and with each other.

In unified systems, a single governing board manages all degree-granting higher education institutions and represents them in discussions with governors and legislators. Unified systems are characterized by interdependence, common rules, and common ways of communicating and measuring. Participants feel part of both the larger system and the institution to which they owe their primary allegiance.15

Federal systems have a statewide board responsible for collecting and distributing information, advising on the budget, planning programs from a statewide perspective, and encouraging articulation. Like their unified counterparts, federal systems emphasize interdependence, common rules, and common ways of communicating and measuring. To these characteristics, they add separation of powers and subsidiarity. Separation of powers divides responsibilities for representing the public interest (monitoring inputs, performance, and institutional accountability) from responsibilities for governing institutions (strategic direction, management accountability and institutional advocacy). The former are carried out by the coordinating board and the latter by institutional or system governing boards. Subsidiarity safeguards the legitimate roles of institutions by limiting the size and influence of central system agencies.

It is important to note that these categories of system design represent a continuum rather than discrete categories. Design characteristics tend to lean more towards one type of structure than another, but there are no absolutes.

Alignment Between the Policy Environment and System Design
The relationship between the policy environment and system design is critical to our conceptual framework. The role of the state as regulator, for example, works at cross-purposes with the deference to professional values that characterizes the most segmented systems. The regulator role is consistent with more centralized bureaucratic models, including the unified model. A federal system may work well in a steering environment, but does not work well in an environment dominated by the state-as-provider role. In order to perform effectively, systems must be compatible with the policy environments in which they function.

Thus, our conceptual framework suggests that statewide governance of higher education is best understood as the result of interaction between a policy environment shaped by government strategies to achieve balance among academic interests and market forces; and a system design that determines provider responsibilities, capacities and linkages to each other and to elected leaders. In the following section, as we consider the policy implications of these levels of policy direction, we find it useful to separate operational work processes (defined above) from system design, and thereby consider work processes to be a third tier of policy practicum. As we reveal in the next section, this new framework allows for a more complex understanding of the overall system structure. It is more useful than traditional classifications in explaining, among other performance variables, the extent to which systems identify and respond to policy priorities, and balance public and professional interests.



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