This article presents an analytical framework for examining the different roles the state can play in improving higher education governance in Latin America and the Caribbean (LAC). It argues that adequate governance of national higher education systems is fundamental to moving toward a new social contract in the sector. It describes different roles the state can play in a new social contract for the future governance of higher education and proposes recommendations for strengthening the governance of national higher education systems in LAC. It also reviews the literature on higher education governance and discusses changes in analytical approaches. It emphasizes that local factors are key determinants in understanding changes in the governance of national higher education systems and identifies trends toward the configuration of hybrid governance systems. It is suggested that a new social contract in higher education depends on the capacity of national governments to articulate the necessary political consensus; to pursue an agenda of higher education modernization as a human right and a public good; and to achieve greater effectiveness in addressing key challenges related to equity, quality, sustainability, and the long-term development strategy of higher education.