This paper examines the politics of education policies in a decentralised political system. Under what conditions does decentralisation promote learning-enhancing policies? Despite the numerous works that have been written on decentralisation and education, little is known about how politics influenced local education policies. To address this problem, this paper looks at the linkages between local politics, bureaucratic capacity, and the development of learning-enhancing policies in Indonesia’s decentralised political system. More specifically, it assesses how regional variation in the discretionary power of district heads over employment decisions in the state bureaucracy explains the variation in local education policies in four districts in Indonesia. The primary data were collected through in-depth interviews with political leaders, bureaucrats, district education councils, school principals, teachers, teacher organisations, parents, non-government and community-based organisations, journalists, academicians, and other relevant informants. Using Mill’s method of difference, the comparative analysis presented in this paper demonstrates that institutional constraints on the discretionary power of the district head over employment decisions in the state bureaucracy do matter for the development of learning enhancing policies. Such constraints can pave the way for the development of the bureaucratic capacity required for governments to pursue learning-enhancing policies. Absent constraints on the discretionary power of district heads over employment decisions in the state bureaucracy, the extent to which districts implement learning enhancing policies will depend on district heads’ commitment to student learning.