Research & Commentary: Picking Education Winners and Losers

Published September 30, 2011

Recent studies of government and philanthropic funding methods have led to criticism of these entities’ lackluster ability to sponsor successful schools. The federal government has long steered taxpayer funds toward legislator- and administrator-favored projects, leaving an equally long track record of failure to promote excellent policies and quash harmful ones.

Those who favor central planning in education rely on the great monetary and coercive power of the federal government and heavyweight philanthropists such as the Gates Foundation. Combining this leverage with substantial public relations campaigns, they entice and force teachers, administrators, and communities to follow their proscribed and often extremely detailed policies. This also requires substantial spending on research to unearth “best practices” for every aspect of education, which “expert” administrators then implement.

School choice proponents highlight the abysmal failure of this approach. Decades of research and experience demonstrate that central planning cannot spur and maintain excellence in education (or any other industry). Administrators of large bureaucracies simply don’t have enough information about every detail under their purview to make intelligent decisions or shift them quickly.

The best approach is instead to allow individuals the freedom to make decisions, which then tell providers what people have decided is best for them. The power of consumer choice gives institutions strong reason to provide what people want and continually improve their offerings.

The following documents offer more information about large institutions picking education winners and losers.

Feds Ready 3rd Round of ‘Race to Top’ for Schools
The U.S. Department of Education has begun its third round of Race to the Top, a grant competition for federal funds in which states must adopt administration-approved education policy changes for a chance to win, the Washington Times reports. Texas Gov. Rick Perry (R) and a House Education subcommittee chairman criticized the program for again using federal taxpayer dollars to promote the Obama administration’s education agenda and “pick winners and losers” in education.

Sec. Duncan Seems to Regard Constitution as so Much Tissue on Bottom of His Shoe
The Obama administration’s Education Department has overstepped constitutional and pragmatic bounds by trading money and legal waivers for states adopting proposals it favors, writes an angry Rick Hess, director of education policy studies at the American Enterprise Institute. He criticizes the administration for using taxpayer dollars and political favors to force policy changes that defy practical wisdom and the other branches of government.

Playing Games with the Federal Role
Mike Petrilli of the Fordham Foundation critiques a paper from the Brookings Institution which suggests the federal government should steer federal funds to specific education programs. He says No Child Left Behind’s notable failure in picking education winners and losers should give them pause. The lesson we should instead learn, he says, is that although the federal government can force districts to do certain things, it cannot force districts to do them well.

The Other Lottery: Are Philanthropists Picking the Best Charter Schools?
No correlation exists between a charter school receiving private funding and its later performance after controlling for external factors, writes Andrew Coulson in an analysis of California charter schools. Thus philanthropists have shown no ability to choose and replicate the best charter schools, instead repeatedly wasting their millions on poor or mediocre schools that can put together a snazzy grant application but can’t use the proceeds wisely.

The Federal Role in Education
“Incentive systems are good for education reform but the federal government is too big, slow, far-away, stupid, and cowardly to do it right,” says Jay Greene of the University of Arkansas. Incentive-based policies implemented by local actors are much more effective. The federal government should do mainly three things, he writes: improve transparency by requiring schools to make information—test scores, finances, teacher contracts, and such—publicly available; facilitate redistributive efforts local agencies cannot do well, such as special education; and fund experimental programs to test new ideas.

Private School Chains in Chile: Do Better Schools Scale Up?
Examples from Chile demonstrate that the best way to increase the prevalence of successful schools and education methods is to create incentives for schools to scale up themselves, instead of forcing their innovations on other schools and districts through government mandates, this Cato Institute study concludes. Students at larger franchise schools in Chile perform better academically than their counterparts in smaller schools under the country’s voucher system, demonstrating that better operators flourish when given freedom.

The Limits and Dangers of Philanthropy in Education
Nonprofits cannot substitute effectively for the market in selecting the best education practices or schools, writes Jay Greene in Education Next. Unlike the federal government, foundations use private funds instead of money forcibly taken from taxpayers, but both commonly subsidize failure. The market, by contrast, enforces strict accountability, whereas governments and nonprofits often do not feel, and thus remove individuals and communities from feeling, such beneficial pressure. Philanthropy should not attempt to build empires but instead promote sensible rules for efficient market operation and alleviate any remaining misfortune, Greene says.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the School Reform News Web site at, The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database at

If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or [email protected].