Supporters of a free market in education haveimmense constitutional discretion in craftingschool choice programs in the wake of theSupreme Court's landmark 2002 decision inZelman v. Simmons-Harris. It is now time to focuscarefully on the details of school choice programs,to discern what specific legislative provisions andregulations advance or impede the developmentof a free market.
Regulation of private schools is a growing concernamong proponents of school choice. Thispaper uses a national survey of private schools asa basis for analyzing the potential effects of variousregulations. More than a thousand schoolsresponded to questions about their willingness toparticipate in a school choice program if they hadto comply with particular regulations. The surveyreveals that the directors of many private schoolswould rather turn down "free money" than compromisethe core qualities of their schools; it alsoreveals that different kinds of schools often do notagree on what those core qualities are.
The paper also examines some economicflaws in school choice programs and explainswhy limiting student eligibility narrows the marketand stunts improvement and why schoolchoice policies must be carefully crafted to takeinto account the dominance and funding structureof Catholic schools.
Finally, the paper provides a series of dos anddon'ts for school choice policymakers, organizedunder four principles. First, create broad-baseddemand. Second, create a wide-open playing fieldon which schools may differentiate themselves andcompete, and eliminate entry barriers to newschools. Third, avoid skewing prices with tuitioncaps or non-need-based subsidization. Finally,avoid conflicts of interest between the people payingfor education and the parents and children benefitingfrom education by creating a system thatmaximizes direct payment by parents and minimizescoercive wealth transfers through the state.