Quasi-markets in education

I thought Thomas might appreciate this article about the difference between regulating a market and regulating a monopoly.  One of his arguments is that we can use some market tools even in a heavily regulated area, and that the likelihood of a tool's usefulness will alter depending on who exercises the choices and with what degree of freedom.  He makes the interesting suggestion, for instance, that most ventures fail, and that it makes more sense to employ a strict standard on the back-end, in deciding what failed ventures to withdraw public support from, than to regulate strictly what sorts of ventures can be started in the first place.

4 comments:

Tom said...

It's a good article in general. I don't see anything I really disagree with there. I particularly like his point that accountability is difficult if you allow schools real freedom in curriculum. His solution, transparency and program-wide evaluations made public, are good, but I want to know more about how he would decide when to close a school. (He says for market failures, but I'm curious how he would measure that -- not saying it can't be done, just want to know how he would do it.)

Financial accountability is essential, and I like his idea of not or only minimally regulating who can start a school and where.

Thanks for pointing it out.

Texan99 said...

He may mean something as straightforward as an inability to attract parents with vouchers. At some point there aren't enough paying customers to keep the doors open, in light of other nearby schools that are keeping customers happy. For that matter, teachers would be able to migrate as well.

Tom said...

Sure, but that could be a straightforward business decision that the state doesn't need to be involved in. It kinda sounded like he thought the government would close the school, so I wondered how that would be different. Maybe it wouldn't be. Maybe, as you suggest, it would just be a matter of who made the decision rather than how the decision was made.

Texan99 said...

I'd say there would be two parts to the process: the parents make the business decision not to spend their voucher dollars at a school they don't care for. When the number of parents who do this reaches critical mass, then to the extent the school is being kept afloat by tax dollars but doesn't seem to have many customers left, the local government shuts it down. If the school isn't being kept afloat by tax dollars, then the principal shuts it down when he gets tired of not being able to make payroll, or not being able to keep enough teachers and janitors on staff. It would be something like the process for shutting down a local branch of a big-box store: HQ steps in at some point to stanch the bleeding, after the customers have made their preferences plain.