The article analyzes the public-private dynamics in the context of eight Western Balkan countries (Albania, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Kosovo, Montenegro, Serbia, and Slovenia). This article examines whether and to what extent these governments "level the playing field" between private and public higher education providers, not in the sense that they have equal chances to succeed, but that they all play by the same set of rules and are able to compete fairly. The article first addresses the emergence of a private higher education sector and the access of this sector to public resources. Next, it discusses the extent of "privatization" of public higher education institutions and whether these are prompted to be more market oriented. We find that the boundaries between the public and private sectors are blurred and the relations aggravated while each of the sectors is faced with its own set of challenges to legitimacy and long-term financial sustainability.