This report examines the process through which the Minnesota state government established school policy during the 1970s. The analysis focuses on who shaped state school policy and how they did it. The data come in part from personal interviews to determine the perceptions key participants had of the state school policy system. These interview responses, gathered in 1979, are compared with the responses from a similar group interviewed in 1973. Along with the perceptual investigation, historical analysis was conducted on the decision process involved in three major policy innovations (tax and school finance reform, state legislation to guide school district planning for declining enrollment, and a proposal to improve instruction in the K-3 grades). Specific conclusions concerning the roles of various influential individuals and groups (including the governor, the state department of education, the legislature, and various lobbying interests) are presented throughout the report. Four general conclusions are offered. One, while significant change occurred, the basic transformation happened before the 1970s. Two, the involvement of more interest groups increased a tendency toward fragmentation, but this tendency was offset by legislative power. Three, policy-making became more political. Four, the policy-making process continued to be shaped by the state's progressive political culture. (Author/IRT)