Competition in Education: Does it Make a Difference? An exclusive interview with Dr. Paul E. Peterson

Published January 1, 1998

Dr. Paul E. Peterson’s recent studies of voucher programs in Milwaukee and Cleveland have propelled him to the forefront of the educational choice debate.

While initial “official” analyses of the Milwaukee voucher program concluded that the choice students performed no better than those in the Milwaukee Public Schools, a re-analysis by Peterson and his colleagues showed substantial gains for the low-income voucher students.

Harvard University’s Program on Education Policy and Governance, which Peterson heads, was formed two years ago and is jointly sponsored by the Taubman Center on State and Local Government at the Kennedy School and the Center for American Political Studies in the Department of Government.

As director of PEPG, Peterson is surrounded by scholars who are examining issues of educational policy and governance from diverse disciplinary perspectives. He was recently interviewed by School Reform News Managing Editor George Clowes.

Clowes: What led Harvard University to establish the Program on Education Policy and Governance?

Peterson: The Kennedy School of Government and the Harvard Faculty of Arts and Sciences have long been interested in looking at questions of school governance because schools, like other public institutions, are part of our government. Also, President Rudenstein had called for greater cooperation across departments and units of the university, so this initiative was in response to his request and to look at substantively important areas, specifically at education.

Clowes: How did you become involved?

Peterson: When this initiative came up, I was a logical person because I have been studying school governance for a very long time. I had a joint appointment in education and political science at the University of Chicago from 1967 to 1982. I have become particularly interested in the question of school governance in recent years because of my concern that central city school systems seem not to be able to turn themselves around.

We need to look not just at what is happening in the classroom, which is what a lot of educational research does, but we need to look at what our governing arrangements are to see if they can be made more effective.

Clowes: Why should we change the way we govern our schools?

Peterson: There are at least three different ways in which people think about school governance questions. One question is whether or not one needs to create more centralized direction. Some people think that if we set up national standards and gave more direction from the Department of Education, we could get a more effective system.

There’s another movement that says we need to have equal funding of education throughout a state. Then there’s a third way, which is where we’ve spent most of our time, and that is to create more competition in the system. Can we get more effective governance by having more competition among school systems and school districts, and what are the promises of that route?

Clowes: So that’s a more indirect approach.

Peterson: Yes. Then there’s the further question of whether or not it’s a fair, equitable arrangement to declare 10 percent of our schools–schools in the private sector–and the families who send their children to these schools, as ineligible for public assistance for the education of their children. They must pay taxes, and yet they get none of the benefits of the taxes for their children’s education.

Clowes: What were your objectives in the first two years of the program?

Peterson: The program has taken off in a particular direction, and that is to encourage the use of randomized experiments to examine the efficacy of particular governing arrangements. Specifically, whether or not school choice can be shown to be effective if you subject that governing arrangement to the most rigorous examination possible.

One of the things that I have long thought is necessary in educational research is that we do more randomized experiments. In medical research, this is a matter of routine. It’s extremely difficult to get a drug approved by the FDA unless a randomized experiment has demonstrated the efficacy of the innovation. Which is to say, you have to have, by chance, one person gets the treatment and another person doesn’t. Then you look at what happens to these two people, or groups of people, over a period of time to see whether or not the treatment is effective.

Clowes: And in sufficient numbers, too?

Peterson: That’s right–although surprisingly modest numbers. In medical research, you can get approval for a drug with a relatively small number of cases so long as you get statistically significant results. For example, the FDA just removed a drug from the market because they were coming up with pretty significant side effects as a result of a randomized experiment.

Randomized experiments are very powerful analytic tools, the most powerful ones available in any kind of scientific research. And yet, it’s very seldom done in education. A lot of educational innovations take place without ever subjecting that innovation to rigorous evaluatory research.

We were able to participate in a randomized experiment in New York City that’s now under way, and we’ll soon be reporting the baseline information from this experiment. The applicants of this program came from very low-income families where the students had very low test scores. And they were not altogether happy with their public schools.

Clowes: These are the students in both groups?

Peterson: That’s right, all applicants say this. Those that get the scholarship get it by means of a lottery. Then we’re going to compare those who got the scholarship with those who didn’t, and next year we’ll be able to give you the results as to which of these groups performs better on the same tests.

Clowes: Is one year sufficient time to reach a conclusion about the effectiveness of the program?

Peterson: No, but it’ll give us a preliminary indication. We’re going to follow this for at least three years.

We did do something like this in Milwaukee and we found some results after the first year, but much larger results after four years. However, the Milwaukee study isn’t nearly as good as the New York study because the randomized experiment wasn’t under the control of an evaluation team.

The lottery in New York was conducted by Mathematica, the evaluation team that I’m working with. Also, in Milwaukee you didn’t have the participation of the religious schools, so it wasn’t as widespread a school choice program as what you have in New York City.

Clowes: I believe another one is being set up in Washington, D.C., to start next fall.

Peterson: Yes, and we will be doing exactly the same kind of a study there that we’re doing in New York City. Several thousand students have already applied.

They will be coming in to be tested and the parents will have their income verified right after the first of the year. Then the lottery will be held this spring and the program will begin in the fall.

A lot of the resources of PEPG are being devoted to this because a set of events has occurred that has allowed us to conduct this really high-quality research on a very important innovation. We have an opportunity to see whether or not school choice in our central cities can give children from low-income families opportunities to learn that they’re not receiving within the public schools.

Clowes: Doesn’t the work of Caroline Hoxby indicate that competition already exists between school districts?

Peterson: Yes. Her work is really important because she points out that it’s incorrect to say there is not choice in American education today. There’s a lot of choice–the only thing is that the choice comes through picking a place to live.

The amount of choice varies a lot from one part of the country to another. Some metropolitan areas, like Boston, have a lot of small school districts, each with its own school board. Miami is the opposite, with one school district for all of Dade County. She looked at where do kids learn more, where does education cost more, where do schools emphasize athletics, and where do they emphasize an academic curriculum.

Hoxby finds that where you have more school districts in a metropolitan area, students learn somewhat more, costs are significantly less, and sports are not as emphasized, and the academic curriculum is more heavily emphasized.

Clowes: That’s somewhat ironic because that’s the way the school districts were before the consolidations in the 1930s and ’40s.

Peterson: Yes. She certainly is making a case against consolidated school districts, at least in metropolitan areas. Her findings say that maybe we don’t have to completely revamp our educational system, we just need to break down these large school districts into smaller components.

Her evidence suggests that one possible problem with the central cities is that they are just one big system, and that you could get a lot more competition if you had truly independent local school boards controlling a very small number of schools. If they competed with one another, you’d have a system that was much more responsive to the needs of families.

I think that PEPG is really taking this as its central question: How do we create more choice? Do we want to design this so that we include private religious institutions or do we exclude them? There is an argument out there that if people go to a religious school, they’re placed in a community of adults that help sustain one another and provide a social capital to facilitate education.

Clowes: Like a social support system within the schools?

Peterson: Right. It may be that private schools are better able to create this sense of community, whether they’re Catholic or some other religion. That’s definitely something that we’re interested in continuing to explore.

We’re also interested in exploring the question of whether or not you would undermine democratic values if you fragmented American education into institutions, especially those affiliated with religious groups.

Clowes: If you could set one goal for education policy makers, what would that be?

: Well, I don’t know if there’s one, but I’d say there are three. One, I think we should find some mechanism to hold schools accountable for what we expect of them. Second, I think we should work for equity. We should try to make sure that the resources for education are allocated fairly and in such a way as to facilitate equal educational opportunity. Third, I think we should explore ways of making the system of education more competitive, so that it’s one where you can get increases in productivity over time.

In many other areas of society, we’ve had absolutely fabulous increases in productivity. Why can’t we get this in the educational sector?

For me the interesting question is how can we do all three of those things, and achieve a blend and a balance among them.