Mental health services are often unavailable, inaccessible, or inappropriate for the children and families who need them. In order to implement a more effective system of mental health services to children and adolescents, an adequate system of care must be defined and described, and a policy mandate to implement such a system must be developed. As part of a continuing program of research on mental health policy for children and adolescents, a study in one state was conducted which involved: (1) a survey of all community mental health centers; (2) a compilation of data from the state's management information system; and (3) in-depth interviews with stakeholders in the mental health system. Key figures (N=49) in the development of the state's mental health system over the last 30 years and 18 additional current stakeholders in the state's mental health system were interviewed within a qualitative research framework. The interview data showed that the major factors influencing policy development and implementation were economic and political, not scientific and professional as traditional viewpoints might suggest. These results support the view that the traditional treatment-oriented and positivist-empiricist approach is inadequate for studying, understanding, or influencing mental health policy. Needed is a focus on the economics and politics of the policy implementation process, including value considerations (in addition to traditional study of the treatment process) and the use of qualitative methods to complement the positivist-empiricist approaches most widely used in policy analysis and progam evaluation. (A six-page bibliography and two data tables are included.) (Author/NRB)