Elephantstrunk

Revisitng what I wrote here. Professor Hoxby has the following prescription for effective school choice:

• Supply flexibility, which means that schools should have the ability to open where there is demand for them, expand with increased demand and contract with reduced demand
• Money should follow students, which means that funding policies must be designed so that schools that are in demand have the funds to expand and those that are not in demand lose funds and must contract; and
• Independent management of schools, which means that schools must be free to innovate in a range of areas, including pedagogy, teacher pay, budget allocation, and the way the school is organised.

These are summary bullet points and just the tip of an iceberg of analysis. For a start she points out that the three conditions are rarely all met. Even so her New Zealand summary leaves me some worries. The conditions above are to some extent obvious minimal requirements for market mechanisms, creative desctruction and the like, to work their magic on schools. What might be missing?

1. Realism Freedom of salary setting, spare capacity to allow parents actual choice and not fill weak schools, set-up costs for new schools, remedial care for weak schools (there will be students in weak schools and leaving them there as their school dies is not an option) all require extra spending that it may be unlikely to expect. Is school choice like socialism, something that hasn’t been tried yet? Are the less ambitious schemes not valuable or worthy of discussion? I think in the UK and probably also in the US teacher salaries are about as low as they can go and teacher pupil ratios are near the limit so schools are about as low cost as they can be. I tend to think that this isn’t the best cost-benefit trade-off and that market mechanisms might deliver better but state underfunding is an enemy.
2. Scalability The maximum size of an effective school is limited so a good school with 200 students a year might expand to 300 or even 400 a year but not much further. Headmasters are a vital part of most school success stories and it is not obvious that running two or three schools is the same kind of job. At some point the costs of increased travelling times limits the choices available. Rural communities may have only one or two schools to choose from so some other mechanism must also be involved in promulgating good practice. Primary education is even more constrained. Fluctuation of child populations will also be disruptive.
3. Feedback An education is a long ant not necessarily comfortable process. There is little gurantee of continutity in a school’s performance record and what there is may come from demographic factors that are not what school choice is meant to be delivering. Hoxby and I guess others have looked at the results of more limited choice under charter school and similar schemes and obtained positive results but these schemes were limited meaning that only marginal decisions were being made by the parents. For such a scheme to really deliver it must survive heavy marketing spends and optimisation of offering toward parent tastes. McDonalds has been a very successful child nutrition provider, are parental preferences really robust enough to withstand a similar onslaught in schools? I believe some kind of safety net is vital but such things can and do create perverse incentives — I know of a teacher chastised for excessively good exam results because they undermined the school’s requests for additional funding.
4. Other factors An effective market might well be positive but marketness isn’t the main determinant of difference between efficacy of school education systems. There is a danger that focussing on school choice which may be too expensive ever to implement properly will lead to failure to consider other factors. Why is the Finnish education system so highly regarded? What do they do better in Japan and Korea?
5. Student bodies Other students are a major part of an education and the interaction of the formation of school bodies is complicated to manage. That’s not an issue that has escaped Hoxby by any means but it is very hard to manage the formation of student bodies in line with common social ojectives without serious market rigging. Professor Hoxby has some interesting discussion of top up fee schemes but they don’t appeal to the clean and simple vision provided by the three points above.
6. Precedent UK private schools (aka public schools) have operated in a proper free market for some time but schools haven’t really expanded their franchises that much.