This article examines organizational change in national ministries responsible for higher education in light of public sector reforms. The article suggests an analytical framework based on authority/autonomy and capacity developments, paying special attention to the creation of agencies. Empirically, this is exemplified by two cases: the Austrian Federal Ministry of Education, Science, and Research, and the Ministry of Education and Research in Norway, each in relation to two subordinate agencies. Both ministries initiated structural governance reforms for their national higher education systems in the early 2000s. The results of this study indicate that although similar intentions were driving the reforms in both countries, the way in which the ministries transformed was somewhat different. In Austria, the reduction in ministerial capacity, an absent agency structure, and increased institutional autonomy might have created a potential policy vacuum in system-level governance right after the new higher education law was introduced in 2002. In Norway, ministerial capacity remained stable, while central agencies experienced substantial capacity growth and influence.