K-12 education reform is the nation’s top political issue. Since competition can be a key effect of reforms involving parental choice, there is considerable political and economic pressure–policy impact, fame, and potentially higher book sales–to produce evidence of its effects.
Unfortunately, since the genuine competition that exists in most of our economy does not exist in any contemporary education system, even partial evidence of its effects on K-12 education is scarce.
For a variety of reasons, some researchers thus have tried to manufacture evidence of the effects of competition in K-12 education by pushing contemporary data beyond its considerable limitations.
The effects of small departures from the status quo that allow limited rivalry are generalized to proposals that would transform the system by fostering genuine competition. However, the limited data from such studies cannot possibly reflect the completely new conditions that real competition would produce.
A Case Study in Imaginary Evidence
The best recent example of data stretched into imaginary evidence is When Schools Compete: A Cautionary Tale, by Helen Ladd and Edward Fiske (L&F).
The L&F book, published in 2000 by the Brookings Institution Press, is about New Zealand’s decade-old policy of making each government school into a charter-like institution run largely by parents–but with budget, building, and staffing decisions still made by the Ministry of Education. Parents can enroll their children at any government school with space available.
While it is debatable whether the reformed schools are independent enough to constitute charter schools, the New Zealand policy certainly qualifies as a version of what we would call public school choice. The policy also has much in common with the open enrollment policies of large U.S. city or county school districts where resource allocation decisions effectively remain centralized.
L&F do an excellent job of identifying the New Zealand program’s key features, and its effects. But they squander their opportunity to make an even larger contribution to the discussion of public school choice–and they create ammunition for the opponents of parental choice–by imagining that their findings about public school choice are evidence of the effects of full parental choice and real competition. They stretch their important data far beyond its limitations, and they clearly state over-reaching generalizations.
For example, L&F portray New Zealand’s program as a “foray into the realm of full parental choice and competition” [emphasis added] (p. 250), “a system of parental choice and market competition” [emphasis added] (p. 292), and “self-governing schools functioning in a competitive environment” (p. 297). These conclusions are not supported by the authors’ description of how the New Zealand program works, which has little in common with textbook descriptions of competitive markets.
Hardly a Competitive Marketplace
Genuine competition requires multiple independent sellers, low barriers for competitors to enter the market, market-determined prices, and the freedom of sellers to expand or contract their offerings according to demand. L&F’s thorough description of the New Zealand policy makes it clear none of those key elements is present.
L&F conclude New Zealand reflects the effects of competition even though:
- New Zealand’s government is virtually the only “seller,” with 96.5 percent of K-12 education being government-run.
- The government strictly controls the supply of schools.
- The government does not duplicate the practices of popular schools.
- The government does not close unpopular schools, and is forcing greater use of unpopular schools by partially re-imposing attendance zones.
- National Education Guidelines are imposed, stifling much of the specialization that a truly free market would produce.
- Enrollment levels, or customer preference, is only one determinant of each school’s funding.
Despite the absence of competition in the New Zealand program, L&F conclude market-based school reforms are likely to make the problems of troubled urban schools worse rather than better unless they are accompanied by appropriate policy safeguards. Under what they characterize as competition, many poor families could not exercise choice, enrollment patterns became more stratified by income and ethnic group, and many unpopular schools lacked the management and administrative resources to handle the effects of losing students.
Those regrettable effects attributed to competition–L&F’s “Cautionary Tale”–are, in fact, the result of an absence of competition. Because influential commentators mislead others by citing it, this imaginary tale about the implications of the New Zealand experience is an emerging political and academic disaster.
For example, a Wall Street Journal editorial page article last year by former Labor Secretary Robert Reich and a recent Education Week article by Thomas Lasley and William Bainbridge both cited the L&F imaginary tale as strong evidence of what “competition” would mean to K-12 education. A recent book review in Education Matters by Harvard’s Jennifer Hochschild also trumpeted the relevance of L&F’s findings to the public and academic interest in “market dynamics” and market experiments.
Over-extensions of existing numbers clearly have the potential to disastrously mislead researchers, policymakers, and the public. Scholars can extract real evidence from the scattered historical examples of competition in education reviewed in Andrew Coulson’s Market Education. However, abundant evidence of the effects of competition in other industries show that its application to K-12 education is not a risky experiment.
John Merrifield is professor of economics at the University of Texas-San Antonio and author of The School Choice Wars (Scarecrow Education Press, 2001). Information about the book is available at business.utsa.edu/faculty/jmerrifi/. Merrifield’s email address is [email protected].