Recent demographic, economic and political trends have placed the issue of school size at the heart of school effectiveness and efficiency discussions. The subject of school size is particularly salient in remote and rural areas where the viability of small schools has been questioned. In spite of the relevance of school size policies, the literature on this issue is quite fragmented with few studies taking a comprehensive view on the implications of school size policies. This literature review attempts to bridge different strands of relevant research and describes existing country practices in order to provide a broader picture of the benefits and costs associated with different school sizes. The paper describes the different trends that have affected school enrolment and how different countries have managed school size policies, with a particular focus on school consolidation. It discusses the consequences of school consolidation and the alternatives to consolidation when schools are facing declining enrolment. It also reviews the different mechanisms through which school size affects the quality and efficiency of schools, and the existing empirical evidence on these effects.