The Research Questions Answered

How do state systems differ in the design of their governance structures?

Federal systems have the capability of linking institutions, however configured for governing purposes, to each other and to state government through four central work processes: information management, program planning, budgeting, and articulation. These work processes are managed by a statewide agency with enough support and delegated authority to compel institutional attention to state priorities. Federal systems can plan on a statewide basis. They can make available credible and timely information on system needs and system performance to elected officials, to institutions, and to the public. They can use program approval and program review authority to limit program duplication and to encourage quality. They can reduce some of the inherent conflicts in the budgeting process and link resource allocation to system priorities. They can design and implement articulation initiatives. If they have a large private sector, they can involve private institutions in contributing to the achievement of state priorities. In federal systems, legislatures typically see themselves as custodians of institutional interests and intervene when they disagree with the way work processes are being used by the coordinating board.

A unified system links institutions to each other and to state government through a single governing board and chief executive. The effectiveness of board management of the four work processes depends upon executive leadership. Unified systems make strong use of strategic planning. They provide less information on performance than federal systems partly to limit the capacity of external actors to insert themselves into system decisions. Despite providing less information, unified systems my communicate better with state government because of the single contact point for the Governor and legislators. When unified systems have constitutional status, this autonomy helps to guard against excessive external influence. Unified systems with strong executive leadership prevent mission creep, ensure program quality and avoid unnecessary program duplication through program review processes. They use the budgeting process to support strategic objectives. The inclusion of two- and four-year institutions in the same system promotes effective articulation and transfer. Governing boards for unified systems do not see the inclusion of private institutions in planning as part of their responsibility. When elected leaders have confidence in system leadership, the unified system requires little oversight from state government.

Confederated systems are harder to characterize. The use of work processes and links to state government may be different for each subsystem. More government agencies are involved directly with governing boards, and the Legislature often provides most of the coordination across subsystems. Confederated systems do not appear to have the capacity to engage in significant statewide strategic planning even though they may have a weak coordinating structure charged with that responsibility. In confederated systems, each subsystem provides its own data and elected officials often suspect that information is being provided with an "institutional spin." In states where a statewide agency has responsibility for providing information, results are suspect because they are based on data provided by the subsystems. Each subsystem makes its own decisions about which programs to offer and where, subject in some instances to review by a statewide agency. Statewide program review procedures are often more a formality than an actual barrier to program duplication. Problems of unnecessary program duplication may arise either within a subsystem or between competing subsystems. Each subsystem negotiates its own budget with the Governor and the Legislature. Often such negotiations are the primary or only way for state government to influence higher education. Where subsystems lack constitutional autonomy, legislatures may exercise direct statutory control of operations. The absence of any buffer between state government and subsystems on such work processes as budgeting contributes to antagonistic relationships with the Legislature, the Governor, or both. Where subsystems are homogeneous, the Legislature assumes responsibility for statewide coordination. In heterogeneous subsystems, governing boards tend to the relationships between two- and four-year institutions. Legislatures bear most of the responsibility for devising ways of including the private sector. Where the private sector is strong, relationships with the public subsystems may be competitive and antagonistic.

With the exception of budgeting, confederated institutions with constitutional autonomy are linked neither to each other nor to state government through any work processes other than those they voluntarily establish. Confederated institutions lack any capacity for statewide planning except through voluntary consensus on division of the spoils. They determine their own missions and decide which programs they will offer where. Voluntary program review processes may serve to allay some policy concerns, but will not prevent a determined institution from doing whatever it chooses. Confederated institutions do not provide information that permits comparisons or judgments about performance except as it may be required by the Legislature as a condition of the budgeting process. Voluntary agreements on articulation are a matter of institutional interpretation and subscription. The Legislature must determine how and when private institutions should be involved. Relationships between elected officials and higher education leaders are cordial as long as no one is rewarded or penalized other than through arrangements to which those affected have previously agreed.

How do historical factors influence the design and functioning of higher education governance structures?

The character and history of state governments clearly affect their choice of governance structures and the ways these structures function. Historical and contextual factors such as the relative strength of the Governor, the presence of a strong private higher education sector, constitutional status for public institutions, the existence of a well developed two-year college sector, collective bargaining, and voter initiatives are all highly important in the ways governance systems operate.

In Illinois a coordinating board interprets and implements the priorities of a constitutionally strong Governor. In Texas a similar governance structure serves more as a referee for the conflicting priorities of a part-time Legislature that sees all issues of political concern as "local." A Georgia Governor with less authority than his Illinois counterpart achieves similar outcomes by relying on direct interaction with a system chancellor and a unified governing board that he appoints. To a lesser degree, constitutionally strong Governors in New York and California pursue their priorities for public four-year institutions through direct interactions with subsystem chief executive officers and appointed governing boards. The Florida Legislature relies on interactions with a strong chancellor to achieve priorities for four-year institutions. California and Florida have also attempted to improve accountability among community colleges through establishing or strengthening subsystem coordinating boards. New York assigns community colleges either to SUNY or CUNY depending upon geographic location. Only in Michigan do elected leaders negotiate with higher education institutions almost as equals except for the power of the purse.

The shape of higher education in New York and Illinois has been influenced significantly by strong private sectors. Illinois designed structural arrangements that have produced less adversarial relationships between the two sectors. Florida and California also have strong private sectors, but they are overshadowed by dominant public sectors more so than in New York and Illinois. Significant efforts to take advantage of private sector capacity in both states are of relatively recent origin. In California, use of the private sector is inhibited by a constitutional prohibition against direct support to private entities. While private institutions in Georgia enroll more students overall (20 percent) than either Florida or California, there is little evidence of efforts to involve them in planning activities, perhaps because a unified governing board with responsibilities for all public higher education institutions views private institutions more as competitors than potential collaborators. In Michigan, private institutions are given degree reimbursements for degrees awarded to Michigan residents. Private higher education does not seem to be a major influence in Texas because of market share.

All seven states have developed extensive two-year college structures. Florida and California require a majority of first-time students to enter community colleges that are accessible to all geographic regions. Illinois also planned its open-access community colleges to serve all geographic regions, but leaves decisions about attendance to students who may also enter relatively open-access four-year institutions. Community colleges in Texas, New York and Michigan, developed through varying combinations of local and state initiatives, provide extensive but not comprehensive geographic coverage. CUNY has been the only subsystem in any of these three states to mandate initial matriculation for some students at community colleges. In Georgia, two-year, degree-granting institutions were developed by a governing board that also has responsibilities for public four-year institutions. Significantly, two-year institutions in Georgia developed later and were less utilized than their counterparts in the other states.

California, Georgia and Michigan have conferred constitutional status on some or all of their higher education institutions. In two of these three states, this action came in response to political intrusions. Constitutional status seems most controversial in California, where it has created different state relationships for UC, which enjoys constitutional status, than for CSU, which does not. While constitutional status is a significant influence on system design in all three states, Georgia and Michigan are at opposite ends of the spectrum in terms of the relationships between institutions and state government. In Michigan, constitutional status poses a barrier to the relationship between institutions and the state, while in Georgia, that barrier does not exist. Since institutions in both state have constitutional status, this suggests that the unified board in Georgia serves a mediating role between the state and institutions, and helps to remove that barrier.

The influence of faculty is strengthened by collective bargaining laws and university senates. Texas and Georgia lack enabling legislation for collective bargaining. University senates are not particularly strong in either of these states. A weak bargaining statute limits the influence of the Faculty Union for Florida's State University System (SUS). In New York State, the effects of a strong collective bargaining law are blunted for SUNY by arrangements that require negotiations directly with a representative of the Governor. Faculty play a much stronger role in CUNY, where a strong senate augments the equally strong influence of a faculty union that negotiates directly with CUNY's governing board. Faculty in the most prestigious institutions in California, Illinois and Michigan have not organized, preferring to trust their fortunes to strong faculty senates and institutional leadership chosen with significant faculty involvement. Less prestigious institutions in all three states have organized for bargaining often after a history of significant conflicts between administrations and faculty. Only California has mandated shared authority in addition to collective bargaining. The effects of combining the two complicate institutional leadership in CSU and, according to many of those we interviewed, make it an impossible task in community colleges. The level of conflict between administrative and faculty leaders in the California Community Colleges and the California State University is similar to the level of conflict at CUNY, which has comparable structures for involving faculty.

Voter initiatives such as those adopted in California and Florida limit the alternatives available to public officials and may limit their interest in reform of higher education.

How does contextual change influence the priorities states pursue through the resources they invest in higher education?

Three of the study states (Illinois, Texas and Georgia) have statewide structural arrangements for monitoring contextual change and institutional performance, and for coordinating strategies to reduce gaps between changes and performance. Florida achieves similar, if less well-planned results, through close working arrangements between an activist Legislature and a subsystem governing board with responsibilities for all four-year institutions. Florida copes with the effects of having community colleges operate as separate subsystems through a statewide coordinating structure for them and legislative management of the interface between two- and four-year subsystems.

In New York State, the absence of a statewide structure for monitoring and coordinating higher education, along with deep divisions in priorities among elected leaders, has led the Governor to rely on market forces for producing the changes he believes will keep higher education responsive to contextual change. However, several factors have prevented the subsystems from developing operating efficiencies: legislative intransigence in providing managerial flexibility at SUNY and CUNY, upstate support for keeping all campuses of the SUNY subsystem open, and faculty union lawsuits that are hampering CUNY.

The Governor and Legislature in California must contend with a difficult institutional environment. Three separate subsystems, each with its own exclusive franchise for clientele and services, operating in the absence of any effective statewide structure for all higher education, pose a formidable challenge to any change that does not meet with substantial support from the affected subsystems. Even more unwieldy than the California arrangements are those in Michigan, where elected leaders must negotiate responses to contextual changes on an institution-by-institution basis without information or assistance from any effective statewide agency.

In sum, all of the study states face similar fiscal pressures, but not all confront contextual change of equal magnitude. Illinois, Georgia, and Michigan face only modest changes in terms of enrollment growth. Texas, Florida, New York, and California face pressures concerning enrollment growth, significant reduction in resources, or both. Texas and Florida have articulated priorities and taken steps toward attaining them. New York has placed its faith in market forces. California, without the market influences present in New York, must rely on subsystem planning without much state input. Despite lesser contextual pressures, Illinois and Georgia also have agendas for change which they are actively pursuing. Michigan does not.

While some states set priorities and others do not, there is relatively little disagreement across the states in terms of what they want from their systems of higher education. Whether implicit or explicit, all states hope their systems will provide access, equity, quality, efficiency, and reasonable choice. They hope higher education will contribute to state goals for economic development and that institutions will remain affordable. They want institutions to demonstrate reasonable productivity and to give priority to state residents. They want undergraduate education that satisfies students and encourages them to earn degrees on a timely basis.

How does performance differ among state systems of higher education in relation to their choice of governance structure?

The seven states exhibit four ways of responding to contextual change. Illinois, Texas, and Georgia all have statewide structures that engage in some form of strategic planning. The Legislature provides a perspective in Florida that helps the state react to immediate contextual change without giving focused attention to longer term concerns such as enrollment growth. As previously noted, elected leaders in New York and Michigan rely primarily upon institutional or subsystem responses to market influences. In California, however, where market forces are statutorily constrained by the monopolistic status of the three subsystems, elected officials can only hope that the aggregate responses of the three public subsystems will equal state needs.

The seven state systems achieve different results for efficiency, access, equity, affordability, and retention. Only in the case of affordability, however, does there appear to be a strong link between governance structures and performance. Families in states that have a systemwide mechanism for representing the public interest in budget decisions, or some device for addressing affordability such as the California Master Plan, pay a smaller percentage of institutional operating costs than those that lack such a mechanism. This seems to be the case even when elected leaders have made affordability a priority as in the highest cost state, Michigan. Even where an agreement existed, as in California, it applied only to the two-year segment. We conclude that affordability is an issue on which public and institutional interests come into conflict, and therefore creates a need for independent advocacy.

There is no evidence in our data that one type of system necessarily has a lower cost per student than another. In other words, institutions and subsystems with individual governing boards are not discernibly less costly than federal or unified systems.

States do provide differing levels of choice. Factors that clearly influence this variable include: the existence of a strong private sector, the capacity of the state to manage and interrelate tuition and student aid, the degree to which private institutions are included in systemwide planning efforts, and the extent to which a state is able to develop and preserve a viable higher education market. Illinois and New York exhibit all four and offer the widest range of student choices. Choice in Texas is limited by a dominant public sector offering low tuition. Georgia, Florida, California, and Michigan either lack the capacity to do systemwide strategic planning or do not include the private sector. Like Texas, California is relatively immune from market influences.

The states we studied attract different kinds of institutional leaders. Entrepreneurial leaders who enjoy operating in the interface between state government and institutions, and who prefer to be free of system constraints, are drawn to Illinois, Texas and Michigan. Leaders of four-year institutions in the remaining states devote more of their attention to institutional concerns and must be prepared to collaborate and compromise where institutional aspirations conflict with system or subsystem priorities. None of the leaders we interviewed in either setting expressed significant dissatisfaction with the arrangements under which they worked, perhaps because strong institutional leaders seek settings that are a reasonable match for their strengths. Satisfaction among internal actors does not appear to be a useful criterion for distinguishing among the governance structures of these seven states. None of the leaders were planning major changes in their current ways of doing business, and nothing in our data suggests that institutions with one type of leadership consistently outperform those with another. Absent some preconceived theoretical notion of what constitutes "strong institutional leadership," it is not possible on the basis of our data to suggest that some governance structures attract stronger leaders than others.

How are the strategies used by elected leaders to influence system performance affected by governance structures?

In relation to the states studied, Illinois, Texas, and Georgia have the capacity to recognize and respond in organized and efficient ways to state needs and contextual change. Florida, New York and California have the capacity only at the subsystem levels, if there. And Michigan does not seem to have this capacity at all except as professional values and a marketplace dominated by the public sector may elicit responses that are satisfactory. Nothing that elected officials do in states with confederated systems or confederated institutions alters performance in ways that promote confidence about the system's capacity to respond to significant contextual change. It is difficult to discern in these case reports the traditional elements of the institutional autonomy/state authority debate. Institutions in federal systems are, if anything, freer from regulation than most of their similarly situated counterparts in confederated systems. In both Illinois and Texas, the Legislature keeps a watchful eye on the coordinating board to be certain it does not overstep its authority. Sometimes, as in the case of performance funding in Texas, the Legislature may intervene on the side of institutions to overturn one of its own edicts. While institutions in Georgia are subject to the oversight of a systemwide governing board, they do not seem significantly less independent in their internal decision making than their counterparts in other large subsystems that are not subject to a statewide governing board.

In federal systems, the coordinating boards prefer to build consensus among institutions and subsystems rather than relying on authority, which is often weak. The use of consensus building was particularly evident in the budgeting, program review and articulation processes used in Illinois, as well as in the development of the formulas used to distribute state appropriations in Texas. Subsystems rely on coordinating boards to make difficult program decisions that might otherwise threaten cohesion. Not infrequently, as in the case of the Illinois PQP Project, coordinating board activity strengthens the hand of presidents in dealing with faculty resistance to curriculum reform. Elected leaders in federal systems identify priorities because they have the mechanisms for pursuing them. They also have credible information to judge institutional performance. The budget serves a strategic rather than negotiating purpose. Except for system changes, governors and legislators intervene directly in the management of institutions only by exception, usually when institutional interests are threatened.

State systems with a unified or small number of subsystem governing boards seem to invite management by strong governors and legislatures unless protected by constitutional autonomy. Even where systems or subsystems are protected, perceived weaknesses in leadership may invite attempts to influence institutional actions through the appointment of "reform board members," through annual budget negotiations, or both. Subsystems that lack constitutional autonomy experience heavy-handed management from strong governors and legislatures in the form of budget reductions unrelated to fiscal shortfalls, mandates for articulation and collaboration, restrictions on revenue generation and expenditures, and regulation of employee relationships. At the extreme, legislators may intervene in such normal institutional prerogatives as faculty work load and credit hours for degrees. In these governance structures, relationships between subsystem executives and state government are frequently tense. Strong leadership expands the boundaries of subsystem discretion, but cannot entirely overcome the regulatory inclinations of elected officials and state agencies. Strong system and subsystem leaders typically provide institutional heads with considerable latitude on internal decisions while enforcing strict discipline on relationships with state government to present a united front for lobbying. Despite direct involvement in management, elected officials generally lack the information needed to assess institutional performance, fail to communicate priorities effectively, and typically have at their disposal only weak mechanisms for planning on a systemwide basis and for encouraging collaboration across institutions and subsystems. The elected officials are frequently dissatisfied with responses of higher education to public interests and concerns.

Elected officials who manage higher education systems exhibit little deference to professional values. The degree to which they ignore such values in mandates they perceive to be in the public interest provokes resistance and foot-dragging that not infrequently defeats the intent of the legislation. The only unified system we observed-Georgia's-was protected by constitutional autonomy. At the time of our study, a well regarded board and strong executive leadership in this system seemed to be doing an effective job of responding to contextual change in ways that balanced professional values and the public interest, as judged by strong support from elected officials and the absence of their attempts to influence institutional behavior. The absence of good information on performance makes this assessment in part a matter of faith, as it obviously was for Georgia's elected officials as well.

Not much can be said about the relationship between strategies and performance in Michigan. The state uses no strategies and appears content with whatever higher education institutions choose to deliver. In the 1960s, such an arrangement was seen as an ideal for relationships between higher education and state government. As the 20th century draws to a close, however, it appears more than a little anachronistic, even to its Michigan defenders.

Michigan's combination of constitutional autonomy and individual governing boards for each institution maximizes the influence of professional values. The annual budget, the only process available to elected leaders to influence higher education, is constrained by a legislative tradition of awarding appropriations without regard to performance or enrollment changes. Michigan institutions are public for the purpose of requesting state funds, but private when it is time to account for the results. The effectiveness of institutional governing boards in balancing the public interest against professional values can be inferred from the cost structure. The Legislature protects state revenues by funding institutions at a rate that is close to the national average. Residents pick up the difference in the form of high tuition costs. Elected leaders make pronouncements about the importance of affordability, but have no mechanism for limiting institutional aspirations, competition, or program and service duplication that contribute to the high costs.