The Impact of State Governance Structures on Management and Performance of Public Organizations: A Study of Higher Education Institutions

Legislative statutes are passed by political majorities which support structures that insulate the implementing agency from its political opponents over time. Political actors also respond to different constituencies. Depending on the broad or narrow base of these constituencies, actors favor different kinds of governance structures. We apply this theoretical framework to the question of whether the state governance structures of boards of higher education affect the way university managers allocate resources, develop sources of revenue, and promote research and undergraduate education. Over the past two decades state governments have given considerable attention to state governance issues, resulting in many universities operating in a more regulated setting today. This paper develops a classification of higher education structures and shows the effects of differences in these structures on university management and performance using a data set that covers the period from 1987 to 1998. The analysis suggests that, for most of the measures, productivity and resources are higher at universities with a statewide board that is more decentralized and has fewer regulatory powers.