Three trends have characterized state policymaking for higher education in the 21st century: divestment, accountability, and race neutrality. These policy agendas are often justified as an attempt to optimize system efficiency and performance by making institutional actors (agents) responsive to the demands of state officials (principals). In this manuscript, we present quantitative evidence that these three policy initiatives have not achieved their stated purpose. We use contemporary social theory to explain why this is the case. Finally, we call for deeper re-engagement of states and their higher education systems in place of transactional and technocratic models.