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This case study examines the consequences of important education decentralisation reforms that took place in Sweden in the early 1990s. The sudden shift away from a traditionally centralised education system towards a decentralised one meant that municipalities had to quickly accommodate new responsibilities. Difficulties related to this shift were noticed early on and then confirmed by international surveys, in particular PISA, which revealed that student performance was deteriorating while the gap increased between and top- and bottom-performers. Key elements to this include the fact that decentralisation took place without enough support from the central authorities, municipalities (particularly smaller ones) lacked local capacity to manage their new responsibilities, and as a result the reform has resulted in a mismatch between official responsibilities and the actual powers of the various stakeholders. The central government, steering education at arm’s length, has few tools to incentivise compliance with national goals. At the municipal level, financial resources are often allocated based on tradition and local politics rather than actual needs. This is in part due to misuse of available data and of expert knowledge by decision-makers. The case study also provides a series of recommendations for improvement.