Governments have a stake in the supply of higher education services for securing future growth possibilities and creating pillars for social cohesion and democracy. However, increasing demand for higher education is accompanied by a continuously decreasing pool of public funds. The book focuses on what governments should do to create an effectively functioning higher education arena that ensures growth and equity in view of global trends and changing public perceptions. The book explores dimensions of providing public goods, incentives for higher education services, implications for higher education funding and related institutional issues. Besides covering practical applications in developed countries, the research also identifies challenges of transition economies through the case study of the Hungarian higher education sector. This book is primarily aimed at students and researchers in Public Policy, Management and Political Sciences, as well as policymakers.