Many states give individual schools the authority to make decisions in response to local conditions while still meeting state and district goals. Providing flexibility to local decision-makers is also a potential means for improving student achievement. This report provides a snapshot of several states' recent experiences with flexibility and deregulation, with a focus on how states promote flexibility in their education systems and what impact their efforts have had on student achievement. The report reviewed state education statutes; interviewed 44 policy activists from business, education, politics, and communities; and conducted a literature review. Findings show that the people who grant the flexibility must be prepared to live with nonuniform results; it is still too early to assess the overall impact on student achievement. In addition, structural reforms to improve student achievement have little impact by themselves. Policy evaluation, in general, is a weak link in the policy chain that can be strengthened by examining the impact of policy decisions and using the results to improve decisions and reallocate resources. Flexibility is a necessary but insufficient piece of a comprehensive education reform plan--one of several important strands in a comprehensive approach to improving student achievement. Appendices contain a list of the 44 interviewees, the interview guide, and examples of statutory language. (Contains 25 endnotes.) (LMI)