In an effort to improve the quality of schools, governments around the world have dramatically increased the resources devoted to them. By concentrating on inputs and ignoring the incentives within schools, the resources have yielded little in the way of general improvement in student achievement. This paper provides a review of the US and international evidence on the effectiveness of such input policies. It then contrasts the impact of resources with that of variations in teacher quality that are not systematically related to school resources. Finally, alternative performance incentive policies are described.