Separate but related developments in the new generation of school effectiveness research are discussed. The first part of the report presents a short historical overview that traces the change from a largely individualistic research approach to one that is more holistic. Whether schools make a difference is explored, and, if so, what makes them effective. Two competing theories are described that offer different explanations for student effects: the student body hypothesis and school climate hypothesis. These two theories are also the basis for a discussion about the merits of private versus public education in the United States. The second part of the paper reviews the accompanying search for an appropriate data analysis model. The third part describes a new way of analyzing hierarchically nested data by using a large data set (5,310 students in 70 secondary schools in Amsterdam) that represents the different forms of secondary education existing in the Netherlands (comprehensive, administrative, college and university preparatory, gymnasium/lyceum, and miscellaneous). The effects of selection policies in the Dutch educational system are clearly indicated through a statistical tool, homogeneity analysis, that is especially suited for analysis of multilevel data. Results are compared with those from studies of school systems in the United Kingdom and the United States. The selection policies of schools have consequences for student achievement. Eight tables, four figures, and a 44-item list of references are included. An appendix describes the Dutch school system. (SLD)