One of a series of studies related to the Delphi research project: "Policy Instruments for Higher Education in the Western Europe of the Future", this paper reports that, despite the many complaints about government influences on higher education, both U.S. and European studies show that it has only a limited effect on higher education in practice. In the debate the importance of government influence as a factor is overestimated. The five forces which shape higher education are competition (for students, faculty, funds, reputation), multiplicity of funds (no predominant dependency on a single funding institution), serving different constituencies, consumer power, and public view on quality. These forces are in practice more decisive for the functioning of the system than the presence of government influence. If these forces are combined with limited government influence, they can enhance a semi-market orientation on the part of the institutions. Government influence can provide an effective partnership to optimize the use of the five basic forces by enhancing self-regulatory and market-oriented institutional behavior. This paper is divided into two parts, the first contains thoughts on governance presented briefly. These are explained further in the notes which provide source information and data. The second part explicates the thesis summarized above.(JB)