Over the past 80 years' university administrators have exhibited flexibility in their responses to evolving government funding patterns. One possible factor in these changes is the consequences of policy decisions at the federal and state government levels that have resulted in institution wide policy decisions in colleges and universities. These policy decisions have affected department policies and faculty member behaviors. Utilizing institutional Theory allows a discussion of the effect that government policy decisions have on responses within the Higher Education Institutions (HEIs). In this manner, Institutional Theory can be used to discuss how university administrative decisions have affected instruction in the United States--a case that can illuminate on policy and governance in HEIs across the globe and the implications these issues have on infusing critical thinking in higher education pedagogy. In the case of the US presented in this study, government funding patterns of the past 60 years have resulted in university policy decisions that have adversely affected the classroom experiences of students and created environments that do not elicit the same level of thinking from students. Being aware of the cascading effects of these patterns can help key stakeholders in universities to adjust policies to improve instruction and student thinking patterns.