Here in Belgium we don't have any standardized tests either. It's less hassle and allows for more flexibility for teachers and schools (the difficulty can vary wildly between schools).
I think that the literature says standardized tests are better, but our education is (was?) among the best, so I don't think it's a deciding factor.
Freedom of education is a big thing here, the government only can give a rough overview of what teachers should teach. For better or worse, standardized tests would never fly here.