Many public schools fail because they are over-regulated. Regulations grew over time because school leaders face conflicts of interest that lead them, in the absence of competition, to act against the interests of students. Allowing parents to choose and requiring schools to compete would restore a proper incentive system, making deregulation possible.
Relying on Politics Requires Regulation
Regulations are the price we pay for choosing to rely on political systems instead of markets to detect and prevent inefficient or corrupt behavior (Wilson 1989; Olson 2000). Each layer of government or bureaucracy attempts to restrict the range of discretionary decision-making by the layer below it by imposing rules, requiring reports, and naming oversight committees. The more complex the service, the more costly, complicated, and detailed the rules become and the less responsive its delivery is to the needs and desires of its beneficiaries.
Federal and state officials, for example, direct the annual spending of many billions of dollars for “categorical” or “compensatory” programs. In theory, these funds go to special classes and services for children categorized as poor, migrant, bilingual, racially segregated, or psychologically impeded – groups superintendents might otherwise be tempted to neglect because they represent few voters or are unlikely to complain about poor service. In practice, the programs have created huge bureaucracies that are counterproductive for learning.
When parents turn to their elected representatives in federal and state government for help, the situation simply grows worse. Those officials have imposed so many mandates, categorical aid programs, and political and regulatory oversight agencies and conflicting and unnecessary restraints on school-site personnel that “virtually everything of consequence is either forbidden or compulsory” (Jencks 1972).
Conflicts of Interest Flourish in Public Schools
Public schools are regulated especially heavily because their employees operate in an institutional setting rife with conflicts of interest. For example, superintendents set standards, make policy, and propose budgets, while at the same time they are responsible for delivering the service: hiring and managing the teachers, choosing and maintaining the facilities, and so on. They face powerful incentives to set low academic standards in order to make them easier to reach, to raise the budget in order to avoid difficult negotiations with teacher unions, and to defer maintenance of facilities, since this will be little noticed during their tenure.
The plight of district superintendents is made worse by the bargaining unit of the teacher union. A dissatisfied union steward can leak information to the school board that contradicts the superintendent’s reports, leading to embarrassment and conflict with the board. Faced with the need to discipline an incompetent teacher, the superintendent is torn between doing the right thing and appeasing union representatives (Brimelow 2003).
School Choice Empowers School Leaders
School choice frees school leaders from the burden of excessive regulation by replacing politics with markets. Accountability comes “from the bottom up” – from parents making informed choices for their children – rather than “from the top down” by bureaucrats and other officials imposing detailed rules.
School choice ends the superintendents’ conflict of interest by separating responsibility for providing schooling from responsibility for producing it. “The distinction between providing or arranging a service and producing it is profound. ... [I]t puts the role of government in perspective” (Savas 2000, 65). State and local school boards and superintendents would be responsible only for providing funds to schools chosen by parents that met certain standards of financial and academic accountability, civil rights, and safety. Responsibility for actually producing schooling would rest in the hands of the leaders of individual schools competing for students and public funds.
Recommended reading: Peter Brimelow, The Worm in the Apple: How the Teacher Unions are Destroying American Education (New York, NY: Harper Collins, 2003); John Taylor Gatto, The Underground History of American Education (New York, NY: Oxford Village Press, 2001).