Market Education Is Not a Theory

Two weeks ago, I sat beside Andrew Rotherham at a Cato Institute forum. After he provided several thoughtful, empirically-supported answers to questions on teacher training and certification, I was surprised to hear him declare that there is essentially no such thing as a truly free market in education, and that education must be extensively regulated to succeed (audio and video are here).

This evening, I read a blog post by Sara Mead, the Senior Policy Analyst with Rotherham’s Education Sector organization, in which she asserts that

Vouchers are all about allocation of children amongst spaces in existing schools and do almost nothing to expand the supply of high-quality options…. Some voucher proponents claim that making vouchers available will create market incentives that expand the supply of high-quality schools in these communities, but there's not really evidence to bear that out.

One thing that these statements (and several others made in Mead’s post) have in common is that they are directly contradicted by decades of empirical research. Another is that they make no mention of that research. Rotherham and Mead do not seem to be disagreeing with the relevant literature. They seem unaware of it.

Taking the latter point first, there are two well-established nationwide school voucher programs, one in the Netherlands, the other in Chile. The first was created in 1917, the second in 1982. In both cases, the supply of private schools rose dramatically to meet demand. Roughly three quarters of Dutch students are now enrolled in private schools. In Chile, private sector enrollment doubled within the first decade and passed the 50 percent mark in December of 2005.

Sweden and Denmark enacted voucher programs more recently, and both are seeing the creation of new private schools as a result. Swedish private sector enrollment rose from 1 percent to 10 percent of the student population in a decade, and continues to rise. I discuss this issue at greater length in my chapter in the Cato book: What America Can Learn from School Choice in other Countries.

Turning to Mr. Rotherham’s assertion, I pointed out at our forum that there are vibrant, unregulated, rapidly growing education markets all over the world. In some areas, such as the U.S., Japan, and South Korea, these are niche markets – mainly after-school tutoring. In other parts of the globe, particularly South Asia and Africa, they are mainstream elementary and secondary schools.

In 2004, I reviewed the empirical research on the relative performance of market versus monopoly provision of elementary and secondary schooling. That research favors market systems in the areas of academic achievement, efficiency, responsiveness of the curriculum to parents’ demands, and even the maintenance of physical facilities. In the achievement and efficiency areas, where the most research has been done, the statistically significant results favor markets by a ten to one margin.

Subsequently, the Cato Institute published a paper by James Tooley and Pauline Dixon showing that private schools serving the poorest people on Earth, in the urban slums and rural villages of Africa and India, are doing a better job, at a far lower cost, than their government-run competitors. These schools are not simply unregulated. In many cases, their respective governments did not even know that they existed. They are also the fastest-growing part of the education sector in the developing world, already enrolling majorities of students in several of the areas studied – including several of the poorest areas.

It is possible that other policy analysts may review this research and find studies that I have missed. It seems very unlikely, however, that any such oversights or new contributions to the literature will reverse the clear pattern that has been established to date.

There is one other thing about which I am convinced: every education policy analyst commenting on market reforms should be familiar with the academic literature on the subject. The futures of millions of children hang in the balance.