The Perils of Publicly Funded “Private” Schools

We support getting publicly funded schools public accountability.... No exceptions, no excuses, no special treatment.

Thus spake John Johnson, spokesman for the Wisconsin Department of Public Instruction, on the subject of a new bill his agency co-wrote with Republican legislators. Among other things, the bill would allow the DPI to kick private schools out of the state's voucher program if it rates them perennial failures.

Here's the thing: Way back in ... August of 2013, (a.k.a., "this month"), the head of a state department of instruction was forced to resign because, while in that same post in another state, he had personally revised his department's ranking of a school run by a major political donor. State officials and agencies, contrary to the implicit assumption of "accountability" mavens, are not all wise, objective, beneficent philosopher-kings. They are people--and organizations made up of people--who have political and personal vested interests that do not always align with those of the families they nominally serve.

Fortunately, over the course of human history, a system evolved which tends to align the interests of producers and consumers more effectively than any other. It is the free enterprise system, in which producers must compete for the privilege of serving each and every customer, and consumers have the freedom to easily choose from among many competing providers. Let schools do their best to serve families and let families choose their schools: let the chips fall where they may. Some schools will succeed, others will fail. Those that succeed, grow. Those that fail are prevented from continuing to ill-serve families. It is a system that works not simply in theory, but in practice, as I found when I surveyed the worldwide within-country research comparing alternative school systems. The least regulated, most market-like education systems most consistently outperform state school systems, such as we have in the United States.

School choice advocates want all families to have access to that system, but not all policies appear equally capable of accomplishing that goal. When I compared the red tape that vouchers and tax credits impose on private schools, I discovered that vouchers, but not tax credits, impose a large and statistically highly significant extra burden of regulation. It's not hard to see why: Wisconsin DPI spokesman Johnson has a point. Public strings always follow public funding, at least in K-12 education. When you force people to pay for something under threat of incarceration, which is what tax funding does, people want a say in how that money is used. It doesn't matter that regulations frequently fail to accomplish their stated aims or are even counterproductive to them. People still want that perception of control and they will vote and even lobby for the rules and regulations to obtain it.

The likely reason that education tax credits add little regulation to private schools is that no one is forced to pay for private schooling under a tax credit program. Participation is voluntary, and those who participate get to choose which school or which scholarship granting organization receives their money. There is no coercion to support any particular kind of schooling that they may object to, so there is no pressure to try to regulate that kind of schooling out of the program.

That is a virtue that vouchers and state-funded Education "Savings" Accounts (ESAs) both lack.

Perhaps, as I recently wrote in the Washington Times, a new body of evidence will accumulate in the coming years that will cast doubt on the regulatory pattern that now seems to divide tax credits from state-funded school choice programs. Or perhaps further evidence will bolster that pattern. Either way, collecting additional evidence on this point should be a priority for education policy analysts. The more the better.

But in the meantime, we have to make policy with the evidence we have. And, today, publicly funded school choice programs seem likely to induce the suffocation by regulation of private schools.

Voucher/ESA advocates: what say you?