Focusing specifically on the two largest federal education programs, Title I of the Elementary and Secondary Education Act and the Education for All Handicapped Children Act (PL 94-142), this study analyzes how states implement federal and state education programs. The book is divided into six chapters. Chapter 1 offers background on federal-state relations and explains the research methods used, the grants-in-aid system, and the conceptual framework guiding the study. Chapter 2 describes the four states in the sample and identifies those political and organizational characteristics that shape policy implementation. Chapter 3 presents a comparative analysis of the data and discusses the conditions under which state political factors are most likely to enhance the state education agency's role and capacity. Chapters 4 and 5 examine Title I, PL 94-142, and state programs serving similar student groups. The final chapter addresses policy questions, especially those related to state capacity and its implications for changing federal and state roles in public education. (Author/WD)