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Abstract: Evidence using micro data from four international student achievement tests shows that institutional features that ensure competition, autonomy and accountability in school systems are key to high student performance. The lessons that education policy can learn from the cross-country evidence include that students perform better (a) in countries with more competition from privately managed but publicly funded schools, (b) in schools with autonomy in process and personnel decisions, (c) if teachers have both incentives and powers to select appropriate teaching methods, (d) if parents take interest in teaching matters and (e) if students and schools are held accountable by external examinations.