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Under socialist regimes university education was mostly reserved for government and industrial elites. As a consequence, higher education in post-transition European countries did not contribute to the development of an educationally conscious middle class that would have been able to recognize the close connection between individual prosperity and higher education attainment. This study is using Difference-in Differences statistical estimation to test whether a transition from the socialist to democratic political regime impacted government spending on higher education in these countries. Findings confirm that the impact is negative and significant. The concept of academic marginalism is used as a framework for understanding the government perception of the role and value of higher education in post-transition countries of Central and Eastern Europe.