Result, not Cause
This conclusion is consistent with the views of Frank Smith (2004) and Kenneth Goodman (see Flurkey and Xu, 2003) who have maintained that our ability to decode complex words is the result of reading, not the cause.
This position does not exclude the teaching of "basic" phonics (Krashen, 2004; Garan, 2004). A small amount of consciously learned knowledge of the rules of phonics can help in the beginning stages to make texts comprehensible, but there are severe limits on how much phonics can be learned and applied because of the complexity of many of the rules (Smith, 2004).
The Reading First Final Report thus confirms the common-sense view that the path to reading proficiency is not through worksheets but through books and stories.
References
Adams, Gary and Siegfried Engelmann (1996). Research on Direct Instruction: 25 Years Beyond DISTAR. Seattle: Educational Achievement Systems.
Becker, Wesley and Russell Gersten (1982). Follow-up of Follow-Through: The later effects of the direct instruction model on children in fifth and sixth grades. American Educational Research Journal 19, no. 1 (Spring), 75-92.
Eldridge, Lloyd (1991). An experiment with a modified whole language approach in first-grade classrooms. Reading Research and Instruction 30, no. 3, 21-38.
Flurkey, Alan and Jingguo Xu, Eds. (2003). On the Revolution in Reading: The Selected Writings of Kenneth S. Goodman. Portsmouth, NH: Heinemann.
Gamse, B., R. Jacob, R., M. Horst, B. Boulay, and F. Unlu (2008). Reading First Impact Study Final Report (NCEE 2009-4038). Washington, DC: National Center for Education Evaluation and Regional Assistance, Institute of Education Sciences, U.S. Department of Education.