How Do We Regulate School Choice Markets?

Whenever DC policy folk talk about school vouchers, it is almost always accompanied by copious handwringing over “bad” schools. Mike Petrilli of the Thomas B. Fordham Institute neatly summarized why we should be concerned:

“Kids who fail to learn in crummy private schools will do just as poorly in life as kids who fail to learn in crummy public schools;

Some parents will make bad decisions, especially when they have limited information and aren’t spending their own money; and

Bad private schools will get lots of media attention, which will drive down public support for school choice and strengthen the hands of those who opposed such programs in the first place and are just waiting to eradicate them.”

As a result, Mike, and Fordham, thinks that schools educating voucher students should take the same standardized tests as traditional public schools and participate in a modified version of the accountability systems we have in place for public schools. They are not alone.

Contra Mike et al, I’d like to argue that we should actually be less concerned, not more, with bad schools for a couple of reasons:

1.) “Goodness” and “Badness” are multidimensional constructs

Recently, I have been influenced by the work of Northwestern University economist Kirabo Jackson, whose fascinating NBER working paper calls into serious question policy’s recent overreliance on math and reading scores as the primary measure of the “goodness” of schools and teachers. As it turns out, teachers have important and measurable impacts on both the cognitive and non-cognitive development of students. While it’s certainly true that test scores can tell us something important about a teacher, what is troubling for the test-score types is that it looks like (1) non-cognitive scores are better predictors of later life success (completing high school, taking the SAT, and going to college) and (2) that it is not the same set of teachers that is good at raising both cognitive and non-cognitive measures.

Such has to be the same for schools, right? If there are teachers that are increasing non-cognitive, but not cognitive skills, surely there are schools that are doing the same. As a result, trying to assess if a school is “good” or “bad” relies on a complex web of preferences and objective measures that, quite frankly, cannot be taken into account in a centralized accountability system. We need something more sophisticated, and something that can respect a diverse conception of what “good” and “bad” means.

2.) “Badness” is a necessary part of marketplaces

Cars today are uniformly better than cars in 1950. They are safer. They are faster. They are more comfortable. They are more fuel efficient.  But it wasn’t a clear upward-sloping line to get here. People bought Edsel’s in the 50’s, Corvairs in the 60’s, Chevettes in the 70’s, Yugo’s in the 80’s, Suzuki Sidekicks in the 90’s, and Pontiac Aztecs in the 00’s. These were bad cars.

But “bad” has two meanings in this case, an objective one and a relative one. There are relatively bad cars out there today. That is, my hail-damaged ’05 Kia Spectra with no cruise control and a blown-out right front speaker is worse than Jay-Z’s Maybach on almost every calculable measure, relatively speaking. But my Spectra, which is still purring like a kitten after over 100,000 miles with darn near nothing more than oil changes, tires, and brake pads is a helluva lot better than the burn-out-after-five-years cars that automakers made for decades.  That’s absolute quality.

Markets work when the spectrum of relative quality drives improvements in absolute quality.  Someone sees my little tin can driving down the road and says “I want to buy a car that doesn’t look like it’s going to blow away in a stiff breeze” and cars get less tin-canny.  Someone buys a Ford Excursion and then gas prices go up and says, “I’m never doing that again” and cars get more fuel efficient. It’s a slow winnowing process, but over time it is superior to centralized systems, that, for example, made the Trabant in an essentially unchanged manner for over three decades.

Rather than thinking we can regulate bad schools out of existence, a better goal is to develop a system that continuously improves what we think a “bad” school is.

3.) When we focus on “Badness” we fail to cultivate “Goodness”

Andrew Neumann, CEO of Educational Enterprises, an organization that attempts to take high-performing private and charter schools to scale, wrote about this tendency  in an awesome paper for our recent school choice markets conference here at AEI:

I strongly believe that the bigger issue that our nation faces is not that we have too many failing schools, but rather that we do not have enough great ones. This is an important distinction. If we believe the bigger problem is that we have too many bad schools, then our focus is primarily on trying to figure out more regulations we can lay upon them to force them to improve or simpler ways to close them. Yet, if we think our biggest problem is that there are not enough great schools, then our focus should be how to create more of them.

Closing bad schools by itself doesn’t help anyone. Moving students from bad schools to better schools does. The second part of that tends to get lost sometimes. Incubating new good schools and developing strong pipelines of teachers into them is every bit, if not more important than trying to weed out the worst schools we have. Maybe we should devote our energy there.

Additionally, focusing schools on narrow metrics, particularly when they are just starting, can have a chilling effect on the number and types of schools that choose to enter programs. The charter school literature tells us that it takes schools a couple of years to get up to speed, holding them accountable from the outset might push out schools that can eventually improve.

So what does a system that cultivates goodness and respects diversity that still prevents harm and fraud look like? That’s a tall order. But there are some promising ideas of how to get us there.

Personally, I’m interested in Andy Smarick’s vision of private school “authorizers.” Much like charter schools, private schools wishing to receive public dollars would work with an organization that has been sanctioned by the state to develop a fair set of metrics that reflects both what the school and the state values. Rather than using a one-sized fits all regulatory structure, individual schools or networks of schools could work with organizations that respect their uniqueness and will help foster it. I think the wide diversity in charter school offerings (think of Carpe Diem and Great Hearts both operating under the same regulatory structure) is confirmation that such a system can still appreciate autonomy and respect diversity.

Jal Mehta and Steve Teles’ teacher quality work on accrediting agencies has applications here as well.   Architects, psychologists, academics, and artists have a wide range of traditions and schools of thought for what professional practice looks like. Take psychology for example. As Mehta and Teles argue there- are multiple different schools of thought, from cognitive-behavioral therapy to psychoanalysis to humanistic psychology, and in each of these schools there are programs to train practitioners, bodies that help accumulate new knowledge, and different definitions of success. Accrediting bodies that are respectful of these various approaches set standards and hold practitioners accountable. Something similar could work in schools.

These two are just the tip of the iceberg in the thinking we can do about this issue. But, if we continue to obsess over bad schools, we’re probably not going to devote the time and energy necessary to creating these new systems. Let’s change that.

-Michael McShane

This first appeared on the AEIdeas blog.

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