ABSTRACT This article examines the effect of local political settlements on education policies in a decentralised political system. Under what conditions does decentralisation promote learning-enhancing policies? Despite the numerous works on decentralisation and education, little is known about how local politics influences student learning. We develop a novel approach to the politics of education policies by looking at the effect of local political settlements on education policymaking. Using a heuristic case study method comparing three districts in Indonesia, we found that constraints on the discretionary power of the district head over employment decisions in the bureaucracy matter for the development of learning-enhancing policies. Such a constraint can pave the way for the development of the bureaucratic capacity required for local governments to pursue quality-promoting reforms. In the absence of such a constraint, the extent to which district governments will implement learning-enhancing policies depends on district heads’ commitment to learning.