Everywhere in the world, higher education is in crisis, and institutional autonomy and academic freedom are under threat. In this article, I propose a continuum of university autonomy in relation to academic freedom, with ‘little or no autonomy’ on one end, followed by ‘low autonomy’, ‘somewhat-balanced autonomy’, and with ‘balanced autonomy’ on the other end. Then I analyse the role of the government in influencing institutional autonomy and academic freedom. My conclusion is that the government plays a key role in determining what kind of autonomy a university enjoys, and balanced autonomy can be achieved if higher education is operated as a federation where different actors, including the government, the board of trustees, the president, faculty and students, work together, one way or the other, as partners. Only then can the university as a public good rightfully fulfil its aims and purposes for the benefit of all humanity.