A case study illustrating the political influences on higher education in a hypothetical state is presented. Higher education became a target for reform by the state's governor, who expressed interest in the sharing of resources between institutions in close geographic proximity; supported the more extensive use of management tools as a means of improving institutional management; recommended the deferred completion of certain capital construction projects begun, but not yet completed; suggested the possibility of tuition hikes accompanied by increased aid to students with demonstrated needs, or state aid to private higher education; and called for legislation expanding the Commission's authority to review existing as well as new academic programs. Ten months after identification of the governor's higher education issues, little had come of his recommendations. State revenue continued to decline at the same time that enrollment unexpectedly increased. While capital construction was halted and tuition increased, the longer-range recommendations for improving system efficiency had gotten nowhere. The governor was distressed to hear of a move underway in the legislature to revolutionize budgetary decision-making for education using performance measures in the budgeting process. The governor decided that if reviews of program effectiveness were to be conducted, he and his administration, not the legislature, would have the responsibility. The legislature, rather than lose oversight powers to the governor, publicly adopted a stance of agreeing with the governor but insisting upon vesting review powers in a legislative committee. Support for the legislative review committee was obtained, and a strategy was adopted to identify ineffective performance within the higher education sector, partially for political reasons. (SW)