The purpose of this dissertation is to try and understand the mechanisms that the Russian State uses to reform higher education, and thus help ensure its legitimacy, within the context of the new global knowledge economy. Most of the discussions to-date on the globalization of knowledge, the role of higher education, and their combined impact on states' competitiveness, focus on developed or developing countries. Very little discussion surrounds the issues faced by countries in economic and political transition. Countries in transition are frequently torn in two opposing directions: it is necessary for them to focus inward for their own internal stability and growth, yet they are very cognizant of the need to integrate into the world economy and correctly direct their internal growth towards international competitiveness. Often, the pull between authoritarian tendencies and liberal economic necessities paralyzes such a State's ability to definitively choose the most appropriate path for growth. Contemporary Russia exemplifies these contradictory tendencies and necessities. While all of the countries in the former Soviet Union participated in the same economic and social system for a good part of the last century, Russia is possibly the closest to the innovation centers in the West in terms of research culture and history, its current educational and technological capabilities, and its professed desire to compete equally in the new global economy. Given Russia's long history and strong tradition of higher education, particularly in the sciences, the country stands to gain from participating in this new global arena. Yet the result will depend on the future of its higher education system. Because of Russia's apparent uncertainty about its political direction, the Russian higher education system faces important questions about how institutional reform will take place and the future of the system's relationship with a State that is itself going through complex changes. The globalization of knowledge required by an integrated world economic system has ramifications for each country's system of higher education. In light of these new global demands and expectations, how does a traditionally authoritarian and nationalistic state in economic and political transition respond to these new global demands for improving higher educational quality, and to internal demands for greater institutional autonomy? Is an authoritarian state able to rationalize its financial constraints with the societal expectation of mass equitable access to higher education, against the pressure to make the national economy more globally competitive? To answer the aforementioned questions requires a theoretical framework that takes into account the relationship between State governance structures and higher educational institutions, while simultaneously taking into consideration how the State reacts to increasing global pressures and expectations. The Russian State is defined in this dissertation as an arena in which political power is contested by the country's economic and political elites. At the same time the State realizes it must represent a majority of the populace in order not to jeopardize its hold on power. It does this primarily through legitimation of its actions by providing social services. Contestation takes place when a State is trying to recreate its power at the same time it is trying to be legitimized. The main contestation therefore is not necessarily within and among the elites, but between the elites and the population as a whole. To be seen as legitimate, the State will try and provide good services for the populace to satisfy their demands and thus minimize contestation. However, this provision of services is only for as long as the populace does not attempt to interfere with the State's version of power. The provision of social goods serves as a "social contract" between the ruling elites and the larger population. The educational system and the State have a relationship of "compensatory legitimation" -- the State attempts to purchase legitimacy by providing public goods such as education. Legitimation becomes even more important in a global environment. Where domestic legitimation would have sufficed in the past, now the need for legitimation extends to the international realm as well. To be considered an educated society, a State must provide a strong educational system that meets international standards. Yet as the State tries to exert control over the higher education system in order to maintain quality, contestation takes place between the State and the intellectual leaders in educational institutions and higher education consumers, both of which have a large stake in the reform process. To ascertain the relationship between the Russian State (e.g., political and economics elites) and administrators of institutions of higher education, and the efficacy of the State's rationalization of the reform process, a series of interviews was conducted with over 60 university, regional and local governmental officials, and Ministry of Education and Science officials. The institutions were chosen from a larger study of universities undertaken by State University -- Higher School of Economics (Moscow), 2008-2011. While evaluating my interviews with Russian higher education administrators, I looked for four identifiers of Russia's willingness to reform higher education for international competitiveness: symbols of domestic legitimacy (academic standards reform and quality improvement); symbols of international legitimacy (accession to Bologna Process); the professionalization of Russian HE (creation of elite institutions); and symbols of institutional autonomy (institutional mergers and closures). One might imagine that the State would attempt to assert control over all aspects of the reform process, most especially in the creation of new academic standards and institutional autonomy. However, the evidence for assertion of control over the higher education system becomes apparent through the indirect financial levers that the State can employ (e.g., direct funding of elite institutions and institutional mergers). The higher education system in Russia is State funded and centrally overseen from Moscow, which already gives it enormous leverage over higher educational institutions. But the control mechanism is through funding (or lack thereof) and not direct coercion. Thus, only part of what we observe in the actual reform process of the Russian higher education system is about modernization and globalization. The remaining thrust of the reform effort revolves around the rationalization of financing balanced against the need to create "world class" universities. This rationalization is important because of the possibility of a decline in demand for higher education in the near term due to the changing demographic situation. It also serves as a mechanism by which the State can regain more effective central control of the higher education system, and ensure a quality system that will be able to further the country's economic development. Despite the fact that the Russian State takes very seriously the need for higher education reform, the State reforms might not work because of the reluctance of university intellectuals, the lack of financing should the global economy and the price of oil decline, the public outcry at mass institutional closures, and the ineffectiveness of the State itself. If this were to happen, the State might have to revert to direct coercion, which might make things worse in the long run both domestically and internationally. As history has demonstrated, the State is ultimately not the most efficient and effective reformer. This inability leads to chaos in the reform process and further undermines the reforms.