Developing countries and economies in transition have inclined to embrace decentralization of governance to promote economic growth and development. This increases the powers of sub‐national governments and creates a special pattern for the allocation of resources. In Sri Lanka, the delegation of powers of school education to local authorities made them more powerful in decision making as provincial or regional authorities were empowered to recruit teachers, train teachers, construct buildings, and provide facilities in schools. This situation prompts scholars to conduct studies into school education in Sri Lanka to compare pre and post decentralized periods and the status of institutions. The overall degree of decentralization is low in developing countries and economies in transition. The overall degree of decentralization in Sri Lanka is one digital percent and but the country has decentralized school education on an even basis. This study is to understand changes in resources for school education and to analyze how such changes affect student performance using secondary data on school education of the pre and post decentralized periods. Results show that student performance has improved, but not the efficiency in terms of costs. However, since decentralized school education improves output and matches with the regional preferences of people, such provisions of school education is preferable in satisfying the voter (or principal). If there is an inefficient or a weak sub‐national government, the reasons for such status need to be analyzed to suggest actions to make it efficient.