The historical and current balance among the federal, state, and local levels in the control of education is reviewed in this report, with a focus on effective schools research and the management of change. Five policy instruments are described, which include mandates, inducements, capacity-building, system-changing, and leadership. A conceptual framework for policymaking and implementation of public education involving national, state, and local levels is presented, followed by a discussion of school-based management as a tool for decentralization. Successful school-based management programs are reviewed, and 13 implications for policymakers at the federal, state, and local levels are offered. (79 references) (LMI)