This research brief is Part III of a four-part study of decentralization in Houston Independent School District (HISD). This part examines the impact of decentralization on student outcomes. In hopes of improving student performance, HISD implemented decentralization throughout the 1990s (see Part I of this project for a detailed discussion of the reforms--ED598239). In addition to giving principals more autonomy to develop staffing plans, class schedules, and teaching practices to cater to their students' unique needs, the reforms culminated with a change to the district's funding model from a full-time equivalency (FTE) model to a per unit allocation (PUA) model in the 1999-2000 school year. The PUA model placed more control of a school's budget in the hands of its principal. The goal of this study is to determine if the decentralization reforms, particularly the changeover to a PUA model, improved student achievement. The primary objective of this brief is to provide evidence on the link between HISD's decentralization reforms and student achievement. Towards that end, Texas Assessment for Academic Skills (TAAS) pass rates were computed for all campuses in the state of Texas between 1996-97 and 2001-02--three years prior to and three years after HISD adopted the PUA-based funding model. To estimate the effect of decentralization, this study compared the change in pass rates (across all grades and all subjects) in HISD schools before and after decentralization was fully implemented in the district to a matched set of schools from across the state that did not experience decentralization over the same time period. In addition to examining the overall relationship between decentralization and achievement, this study also attends to differences in the effect of decentralization by student-subgroup (black, Hispanic, and economically disadvantaged students), school level (elementary vs. middle vs. high) and school size (small schools). [Title varies: "Decentralization Reform in HISD, Part III: Evidence on the Relationship between Decentralization and Achievement."]