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
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.
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.
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
- Decisions about governance structures establish lines of authority and
accountability between state government and providers.
- Decisions about mission divide responsibilities for achieving higher education
goals among types of institutions.
- Decisions about capacity determine the availability, quality, and location
of educational programs and services.
- 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.