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How do governments decide on the education systems they provide? I introduce and test a theory of the political-economic calculus behind government decision-making in education. The theory uses a microfoundational conception of demand for education by citizens, in which individuals' demand varies by wealth and employers' demand varies with the availability of skilled labor and the flexibility of the wage market. I predict that a government will use its education toolkit--its budget, teachers, schools, financial aid, exams, etc.--to build or alter its education system to meet the educational demands of the group of individuals and employers on whom its power depends. With this theory, and drawing on detailed data and field work, I explain a half-century of education policies and spending in three carefully-chosen countries: Brazil, Taiwan, and Ghana. Together these three cases provide maximum variation in inequality, institutions, culture, and geography. Despite their differences, I show how successive governments in each adjust their education systems predictably and similarly in response to shifts in whichever group of citizens each depends upon for power: e.g., when these citizens are comparatively wealthier, the government systematically invests in tertiary education at the expense of primary; when employers demand skilled labor in a flexible wage market, the government invests in vocational education. The results make sense of the vast heterogeneity in education systems, and allow detailed predictions for how education systems will look in different political contexts. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]