Education systems in third world countries are facing severe pressures. The need for qualitative and quantitative advances has forced governments to seek innovative ways to achieve their goals. "School Clusters" is one such innovation. A cluster is a grouping of schools for administrative and educational purposes. Some common objectives of clustering may be to help use scarce resources more efficiently, decentralize decision-making, help disadvantaged communities, increase participation in development, support isolated teachers, and improve social equity. Individual third world countries including Sri Lanka, Thailand, India, Peru, Costa Rica, and Papua New Guinea have made use of the school cluster system. The programs used in each of these countries are reviewed to provide insight into the implications for future policies and programs in other third world countries. Although clusters seem to play a positive role in helping to improve the operation of school systems, this international experience shows evidence of shortcomings and failures as well as successes. Much can be achieved, however, provided policymakers are realistic in their aims and pay careful attention to design and implementation. (48 references) (LAP)