The paper attempts to accomplish three main tasks: 1. To make the case that the policy environment for higher education is changing and that many current policy assumptions no longer obtain. For instance: policy interests are shifting toward a concern with client needs and service and away from attention to institutions and their needs; and the tools of policy are increasingly focused on shaping institutional behavior indirectly (through creating and regulating markets), rather than directly (through regulating and controlling institutions). 2. To identify the kinds of issues that arise—and the particular types of policy questions that must be addressed—if the above assertions are true. 3. To suggest the kinds of activities that could most usefully be incorporated into the research and development agenda of the National Center. While the paper is no longer labeled a draft, it remains a work in progress.