How is a Portfolio District Different from a School District?

[The music festival, day 6. The crowd has grown so big the camera has to pull back a loooong way to get it all into view. The boys are again present with the college hippies. The band is playing reggae music.]
Driver: Wow, this band is so crunchy. Dude, I need more weed.
Stan: So it seems like we have enough people now. When do we start taking down the corporations?
Man 1: [take a deep drag from his joint] Yeah man, the corporations. Right now they’re raping the world for money!
Kyle: Yeah, so, where are they. Let’s go get ’em.
Man 2: Right now we’re proving we don’t need corporations. We don’t need money. This can become a commune where everyone just helps each other.
Man 1: Yeah, we’ll have one guy who like, who like, makes bread. A-and one guy who like, l-looks out for other people’s safety.
Stan: You mean like a baker and a cop?
Man 2: No no, can’t you imagine a place where people live together and like, provide services for each other in exchange for their services?
Kyle: Yeah, it’s called a town.
Driver: You kids just haven’t been to college yet. But just you wait, this thing is about to get HUGE.

The Ed Next article by Robin J. Lake, Ashley Jochim and Michael DeArmond on the challenges facing school choice in Detroit has led to a resurgence of chatter about Portfolio Districts.  The authors write:

Detroit is a powerful illustration of what happens when no one takes responsibility for the entire system of publicly supported schools in a city. Parents struggle to navigate their many, mostly low-performing options, and providers face at best weak incentives to improve academic quality. As a result, large numbers of failing district and charter schools continue to operate.

And in an accompanying blog post Lake concludes: “What Detroit needs is a portfolio manager…”

The idea that we need a Portfolio District to decide which schools of choice are allowed to open, which must shut-down, and what regulations should govern all of them has gained some traction in reform circles ever since New Orleans adopted this approach.  Now folks want to bring that same idea to Detroit and choice systems everywhere to make sure bad actors don’t get to operate schools, that failing schools are forced to close, and that a heavy regulatory framework avoids other problems.

I’ve never understood how Portfolio Districts are expected to perform these regulatory functions any better than regular old school districts.  The whole thing reminds me of the exchange quoted above from the South Park Hippie Drum Circle episode.

Portfolio District Advocate: “Yeah, we’ll have one guy who like is a Portfolio Manager, who like can close down bad schools.”

Me: “You mean like a superintendent?”

Portfolio District Advocate: “No, man, this guy will work for an independent board that makes rules for schools to make sure they don’t do bad things.”

Me: “You mean like a school district?”

Portfolio District Advocate: “You don’t get it, dude, the Portfolio District is there to make sure that only good schools open and to provide information and reduce chaos.”

Me: “Isn’t that what school districts are already supposed to do? How is a Portfolio District any different other than that you gave it a new name and believe that good people will be in charge?”

Ed reform is plagued by people not thinking like social scientists.  School districts have institutional incentives to prevent new good schools from opening, propping up bad schools that too few parents want, and imposing an excessive regulatory framework on the entire system.  Those same institutional incentives will inevitably come to dominate Portfolio Districts.

If you want to create real change, you have to change the system of incentives — not just create new institutions that will be governed by the same perverse incentives.  Choice and market competition can accomplish the same goals without being subject to the same destructive incentives as school and portfolio districts.

Yes, I know that Robin Lake and her co-authors find continued low achievement in Detroit schools and quote several people who complain about a lack of information and other challenges.  But keep in mind that the big expansion in choice in Detroit is only a few years old and that the city is starting from an extremely high level of dysfunction.  Lake and her colleagues have not used a rigorous analysis to determine whether charter schools are having a positive effect in Detroit, they just show trends in urban NAEP scores.  And the few studies on Detroit charters they do cite — the CREDO and  Mackinac studies — both find positive results for Detroit charters.  It just isn’t fast enough and dramatic enough.

Beware ed reformers in a hurry.  Real and enduring improvement takes time.  Happily it is possible, if we have the patience to let it happen.  A new study by Patrick L. Baude, Marcus Casey, Eric A. Hanushek, and Steven G. Rivkin examines the evolution of charter school quality in Texas over time.  Here is their abstract:

Studies of the charter school sector typically focus on head-to-head comparisons of charter and traditional schools at a point in time, but the expansion of parental choice and relaxation of constraints on school operations is unlikely to raise school quality overnight. Rather, the success of the reform depends in large part on whether parental choices induce improvements in the charter sector. We study quality changes among Texas charter schools between 2001 and 2011. Our results suggest that the charter sector was initially characterized by schools whose quality was highly variable and, on average, less effective than traditional public schools. However, exits from the sector, improvement of existing charter schools, and positive selection of charter management organizations that open additional schools raised average charter school effectiveness over time relative to traditional public schools. Moreover, the evidence is consistent with the belief that a reduction in student turnover as the sector matures, expansion of the share of charters that adhere to a No Excuses philosophy, and increasingly positive student selection at the times of both entry and reenrollment all contribute to the improvement of the charter sector.

Rather than imposing a Portfolio District that is likely to re-create the dysfunction and failure of traditional school districts, let’s change the system of incentives and allow choice and competition to improve school quality over time.

3 Responses to How is a Portfolio District Different from a School District?

  1. matthewladner says:


    Epic level funny post. My question:

    Isn’t it the organized interests that find it all-too-easy to capture school boards in super-low turnout non-partisan (thus low information elections) that have the incentive not to allow new schools, keep old one’s open etc. rather than the districts themselves? If so, then experimenting with governance models seems like a good idea, especially when one considers the billions of dollars in school buildings currently being misused. New Orleans is showing that those assets could be put to much greater educational use.

    The Federal Reserve isn’t about to take over the RFP process for school operators, so yes politics will rear its head. However, the same fatalistic that the powers that be will ultimately use public funding to homogenize private schools. There is no point in doing charter schools in NYC because eventually a union goon will get elected mayor….oh….wait….

    RSD may not ultimately prove the most promising reform strategy and there are certainly risks. The same seems true of everything else however, so hand me the dice.

    • The governance model for school districts doesn’t seem to matter much. We see little difference with appointed boards, mayoral control, state take-overs, etc… This was the insight of Paul Peterson’s book, City Limits. Internal governance arrangements do not matter nearly as much as the external incentives facing a unit of government. So, whoever controls school districts and whatever we may call them, they are inevitably going to be captured by the schools that exist and the people who work for those schools.

      The change that choice offers is that it decentralizes control. Under both school and portfolio districts someone is centrally in charge of deciding which schools can be created, which must be closed, and what rules will govern all of them. With school choice no single set of individuals is in charge.

      The theory behind school and portfolio districts is that elites are better positioned to decide what schools should exist and what rules should govern them. Progress under this model is driven by elites making good choices on behalf of parents. Parents may still be able to choose among the schools that central authorities allow to exist, but that mostly just satisfies variation in taste.

      The theory behind choice is that there is a collective wisdom among choosing parents. Some will make mistakes, but as a whole their choices will attract good schools and drive out bad. So, Progress is driven by the market, not by elites making choices that parents are unable to make for themselves.

  2. matthewladner says:

    It does not seem so binary to me. Charter schools are always authorized by someone, there are often criteria for private schools to participate in private choice programs etc.

    I do agree that a polity that is willing to accept that “freedom is messy” eventually sees a reward for their patience and wisdom. Decentralized learning driven by voluntary exchange is the driving force behind human progress and all, but patience preferences vary widely. Better to whack the left tail of the bell curve than to allow only a token number of new schools to open imo, as fraught will peril that process proves to be.

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