The higher education system of Azerbaijan was influenced by similar, at the same time different factors to other former Soviet Union countries. Forces driving transformations and changes and how they shaped the higher education market were analyzed based on the scope and source of their impact such as economic, social and political divided into three stages of 1) Pre-Soviets (1918-20): establishment of ADR and the first university; 2) During Soviets (1920-90) expansion and diversification of the higher education system and 3) Independence period (1991-present) current transformations and changes in higher education sector. The elements of change were investigated through desk study of various state reform documents, reports by international development organizations, media, and academic publications. Representatives from private and public universities, as well as from the Ministry of Education (MoE hereinafter) were interviewed to obtain an in-depth look into changes in the higher education system. This divergent group of informants helped to analyze factors causing and leading the before mentioned changes. Research revealed various factors influencing higher education development that can be grouped as following: 1) economic: fluctuation in educational spending, insufficient funding for research and education, low salaries, weak infrastructure and regulating force of labor market; 2) social: value for higher education, increased demand, hopes for avoiding economic challenges of the transition period, corruption and bribery in higher education institutions, changing nature of higher education, and devaluation of degrees; and 3) political: top down policies, state development strategies, centralized tightly regulated system, state planning, and priority setting. Adjustment and adaptation of the higher education system to the market was accompanied and planned by the state represented in the form of ministries and state agencies. This is also apparent from the case of establishment of new state universities focused on specific specialization that state finds needed.
