This report describes key policy decisions that have shaped the New Mexico system of higher education during the past third of a century and links those decisions to current educational outcomes. The study was part of a larger study that aimed at understanding the linkages between policy decisions and higher education performance through comparative case studies of two states in the United States and two states in Mexico. Adding to information from measures developed by the National Center for Public Policy and Higher Education, this study offers data provided by the state and information from interviews with a range of elected and appointed higher education leaders in New Mexico. New Mexicos capacity to manage its higher education institutions is bounded by the constitutional autonomy granted to the six public four-year institutions. There is evidence to suggest that New Mexico governors and legislators have not been very involved in higher education precisely because of the constitutional autonomy granted to the public colleges. Overall, the two elements of fiscal policy, the Lottery Success Scholarship Program and the appropriations process, appear to have encouraged greater affordability, choice, and opportunity for participation in public institutions. Indicators seem to suggest that although fiscal policy encourages and strengthens the existing institutional autonomy, higher education has not produced the outcomes one would expect. New Mexico has obtained reasonable results on access and participation, but case evidence suggests that the low preparation and completion results are at least partly attributable to the performance of New Mexicos higher education institutions. (Contains 2 tables and 21 endnotes.) (SLD)