AbstractThis study analyses the decision making process which lies behind the drafting of the current legal framework regulating higher education system-level and institutional-level governance in Serbia. The research places particular focus on the relationship between the main actors in the process, namely the state, the academic community and the students, and looks into the logic of their actions, while also exploring the external factors which affected the decision making. The fundamental assumption underpinning this endeavour is that the analysis of the decision making process in question would offer an understanding of the rationale behind the governance changes, as well as provide an insight into factors affecting the decision making and consequently the output of the process as regards governance. The Institution Analysis and Development Framework has been employed as the prime analytical tool, while the research technique comprises of in-depth interviews with representatives of the main players and documentary analysis.The analysis draws several key conclusions. First, the process of deciding the latest governance transformations in Serbian higher education was to a greater extent affected by the dynamics of actors‟ interaction and preferences, than by supra-national trends which they resemble when given a surface look. Second, the decision making triggered the power redistribution in the higher education system in a way that it mirrored the power distribution pattern inside decision arenas. Third, institutional autonomy and resource dependence were not only in the heart of the debate, but also the key driving forces of the decision making on governance arrangements in Serbian higher education.