Despite sustained economic growth since the mid-1980s, Lao PDR's education system faces challenges in meeting its goals of providing all students with access to education and improving learning outcomes. To further the country's economic development, the Government of Lao PDR has placed a priority on improving its education sector. However, as of 2012, Lao PDR was not on track to achieve its Millennium Development Goal (MDG) of universal primary education. There are concerns about education quality as well, particularly whether students are completing primary school with sufficient mathematics and literacy skills. To help address these challenges, the government instituted in 2011 a School Block Grant (SBG) program that gives provinces, districts and schools greater administrative control than they have ever had. This report presents a framework that explains how SBGs can improve education quality. The framework draws lessons from international experience that may be particularly useful for the government, and identifies challenges and potential risks to successful implementation of the program.