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This study looks at three states, New Jersey, Illinois, and Arkansas, to answer the questions whether it is centralization or decentralization that promotes greater efficiency, achieves outcomes, proves more effective, and offers greater accountability. The study explores, in depth, the historical relationships between state government and public higher education institutions the three states where government control and authority were lessened in the mid-1990s and details the shift to decentralization. The purpose:of the study was to explore the policy shift to decentralization and the effects it had on public higher education. Eighteen generalizations were drawn regarding the policy shift, while twelve generalizations were drawn regarding the effects of decentralization. Twelve policy recommendations are offered as guides for decentralizing state policy action. Two grounded theories were developed:(1) a destabilized state higher education system, an ideological policy entrepreneur, and opportunity produce a policy shift and (2) the main effect of the shift is to restore greater equilibrium between public institutions and the state.