As a reaction to Germany's poor performance in PISA 2000 some propose an expansion of the private school sector as an institutional strategy to improve quality in education. This is based on the conviction that private schools outperform public ones. This hypothesis will be tested empirically in the paper by comparing the achievement of 15year olds in the PISA domains between public and private secondary schools in Germany. The analysis uses data of the extended German PISA-2000 sample. The paper provides a short theoretical framework for explaining a possible achievement advantage of private schools and gives an outline of recent empirical research on private school effects. In this connection it will be argued that policy conclusions based on the calculation of meta-effects from international data sets are misleading since this does not take into account differences in the organization of the Third Sector in education between countries. Using Germany as an example the implications of a corporatist Third Sector model in education for the relative performance of private schools will be analyzed.