This paper measures the effects on student outcomes of decentralizing educational responsibility to communities and schools. In El Salvador, community-managed schools emerged during the 1980s when public schools could not be extended to rural areas because of the country's civil war. In 1991, El Salvador's Ministry of Education decided to draw on this prototype to expand preprimary and primary education in rural areas through the EDUCO program (Educacion con Participacion de la Comunidad). The present EDUCO schools are each managed autonomously by a community education association elected from among the parents of students. The associations take a central role in administration and management. They are also responsible for contracting teachers and maintaining schools. Drawing on a national survey of schools, 38 EDUCO schools and 154 traditional rural schools were compared for third-graders' achievement on standardized tests of mathematics, language and school days missed due to teacher absence. Analysis controlled for student characteristics and selection bias, using an exogenously-determined formula for targeting EDUCO schools as an instrumental variable. Findings indicate that the rapid expansion of rural schools through EDUCO has not adversely affected student achievement yet has diminished student absences due to teacher absences. It was concluded however that this expansion may have effects on achievement long-term. (Contains 20 references and extensive statistical data tables.) (Author/SV)