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This article reviews evidence from four international student achievement tests on the effects on student performance of competition from privately managed schools, schools' freedom to make autonomous decisions, and accountability introduced by external exit exams. The multivariate cross-country regressions are performed at the level of individual students and control for extensive family and school background information. The results reveal that students perform better in countries with more competition from privately managed schools, in countries where public funding ensures that all families can make choices, in schools that have freedom to make autonomous process and personnel decisions, where teachers have both freedom and incentives to select appropriate teaching methods, where parents take interest in teaching matters, and where school autonomy is combined with external exams that provide an information basis allowing for well-informed choices and holding schools accountable for their autonomous decisions.

This paper uses extensive student-level micro databases of three international student achievement tests to estimate heterogeneity in the effect of external exit examinations on student performance along three dimensions. First, quantile regressions show that the effect tends to increase with student ability--but it does not differ substantially for most measured family-background characteristics. Second, central examinations have complementary effects to school autonomy. Third, the effect of central exit examinations increases during the course of secondary education, and regular standardised examination exerts additional positive effects. Thus, there is substantial heterogeneity in the central-examination effect along student, school and time dimensions.

This paper presents a model of educational production that tries to make sense of recent evidence on effects of institutional arrangements on student performance. In a simple principal-agent framework, students choose their learning effort to maximize their net benefits, while the government chooses educational spending to maximize its net benefits. In the jointly determined equilibrium, schooling quality is shown to depend on several institutionally determined parameters. The impact on student performance of institutions such as central examinations, centralization versus school autonomy, teachers' influence, parental influence, and competition from private schools is analyzed. Furthermore, the model can rationalize why positive resource effects may be lacking in educational production.

The influence of family background on student performance is studied. The result indicates that the differences in performance are due to institutional differences.

Influence of innovation as a causative factor for exports, is examined using German micro dataset.