School choice and the search for an educational market

Abstract

-This article looks at attempts to create markets in schooling by increasing school choice, making particular reference to a study by the Organisation for Economic Cooperation and Development (OECD) of the impact of choice policies in six countries: Australia, England, the Netherlands, New Zealand, Sweden and the United States. The main policies examined are subsidies to private schools and enhancement of choice between schools within the public sector. The article identifies five kinds of imperfection in school markets in practice: the failure of clear alternatives to present themselves to consumers; the arbitrariness of criteria for choosing; limits to capacity at popular schools; the failure of supply to diversify in response to consumer pressures and the existence of negative externalities. It is argued that these imperfections make it necessary to intervene to maximise the benefits and minimise the risks of school choice.

Do Quasi-markets Foster Innovation in Education?

“…In many ways, Australia and New Zealand have led the policy movement by embarking on more concerted efforts to adopt comprehensive quasi-market systems, but in distinct ways. Since the early 1970s, Australia has incrementally expanded differentiated public subsidies for private schools, and has thus substantially expanded the private sector's share of the education market so that one of three students attends what are typically Catholic or more affluent private schools; more recently, quasi-market elements have become greater policy priorities, with ease of entry for new providers, comparative information for consumers, specialised and selective programs in the public sector, and devolution of management to more autonomous or even self-governing schools, specifically to nurture innovative schools (Angus, 2003;Forsey, 2008;Glenn, 2003;Hirsch, 1995;OECD, 1994;Kober, 2000aKober, , 2000b. On the other hand, New Zealand quasi-markets were formed largely in the state sector as part of a wider market-oriented approach to social services, starting in the early 1980s by successive Labour and National governments (Mikuta, 1999).…”

“…Overall, these general patterns support an apparent consensus emerging from a number of different sources and contexts on the predilections for innovation from quasi-markets in education. Writing for the OECD in the mid-1990s (OECD, 1994;Hirsch, 1995), Hirsch found that choice has not promoted diversification of options, except for some niches; much of the innovations in Sweden, for example, appeared to focus more on image management than productive processes. While Tooley (1999bTooley ( , 2002 sees abundant innovations in the private sector in a number of developing countries, others note different patterns in developing and developed systems, finding the subsidised private sectors in Canada and the Netherlands rather un-innovative (Center on Education Policy, 2000).…”

A review of educational partnership arrangements in further and higher education: pointers for managers in further education

“…Hirsch (1995) has indicated that there are a number of market imperfections which militate against choice in the education marketplace. It also needs to be remembered that market conditions can change quickly and economic cycles result in boom and bust conditions.…”

Does Market Competition Encourage Strategic Action in the Private Education Sector?

“…The market hypothesis has generated a cottage industry of articles and books (e.g., Chubb and Moe 1990;Friedman 1962;Henig 1999;Hirsch 1995;Hoxby 2000;Maranto et al 2001; see also Peterson and Campbell 2001;Ouchi 2003;Wilson 2006). While inspiring us to think about how alternative bottom-up governance structures may inspire positive change, the empirical underpinnings of this perspective have not been given adequate attention at the micro level.…”