Portfolio Districts: One Ring to Rule Them All

We’ve been having a good discussion this week about portfolio districts and the best way to regulate choice schools.  I’ve written on this topic before, but let me try to explain more clearly why I am wary of portfolio districts, mayoral takeovers, and other proposals for a super-regulator to govern all choice and traditional schools.

I understand that all school systems, choice or traditional, require some regulation.  And I understand that all regulatory schemes are susceptible to capture by status quo interests.  But it is wrong, as Matt Ladner and others have suggested, to just throw up one’s hands and say that eternal vigilance is the price of good policy or that in the long run we are all dead. Some regulatory approaches carry more risks of capture than others and may produce fewer benefits.  We should consider the incentives created by different regulatory approaches to think about what we should prefer.

In general, centralized, monopoly regulators are more susceptible to capture than decentralized, multiple regulators.  The problem with portfolio districts is that they are trying to be one ring to rule them all.  They govern traditional, charter and (under some proposals) publicly subsidized private schools.  They decide which schools should be allowed to open, which should be closed, which empty spaces should be allocated to whom, and they impose testing, transportation, and other regulations on all.  Supporters of portfolio districts may think that Sauron was offering his hand to help, but Gandalf understood the danger of concentrating power:

Don’t… tempt me Frodo! I dare not take it. Not even to keep it safe. Understand, Frodo. I would use this ring from a desire to do good… But through me, it would wield a power too great and terrible to imagine.

Well, portfolio districts don’t quite pose the same risks as the One Ring, but the logic of the danger is the same.  The ability to control who operates all types of schools and what regulations govern them is too much power not to attract bad people to it or to corrupt those who possess it.

The solution is to decentralize power so that schools are governed by multiple regulators.  It’s better to have the entity responsible for authorizing charter schools be separate from the one regulating traditional public schools.  When school districts or a state board of education is the sole authorizer of charter schools they are likely to be captured by traditional public school interests and approve few charters or even mischievously approve bad charter operators or charters that focus only on groups of students traditional public schools don’t mind losing so much (adjudicated youth, pregnant teens, dropout recovery, etc…).  When a single authority imposes a single set of standards, single curriculum, and single set of tests, there is real danger of regulatory capture by status quo interests.

When that power is dispersed, it is too hard to capture all of them and they compete with one another to keep regulations reasonable.  This is the logic behind separation of power and federalism.  It is the virtue of Tiebout choice.  The superiority of dispersing and checking power was understood by the founders.  It was understood by Montesquieu.  It was really Woodrow Wilson who launched a full-frontal attack on the idea of dispersed power and it is his progressive descendants who continue to this day to believe that they can wield the One Ring for good.

All of this being said, I can understand the argument for temporary concentrations of power for the purpose of creating its long-term dispersion.  Perhaps the only way New York City could get a thriving charter sector was for Bloomberg to concentrate power in his own hands and create scores of charter schools within existing public school facilities.  The creation of those charter schools dispersed power enough so that de Blasio could be blocked in his attempt to close them and re-centralize power into his own hands.

Even the American Revolution required the concentration of power in the hands of General Washington so that we could be freed from the British monarchy and create our new system of separated powers and federalism.  The danger is that in temporarily concentrating power we might end up with Napoleon instead of Washington.

My concern with the portfolio district backers is that they don’t see it as a temporary measure to create a system that ultimately disperses power.  They see it as the ultimate goal.  And in that I believe they are completely mistaken.

8 Responses to Portfolio Districts: One Ring to Rule Them All

  1. matthewladner says:

    Thank you for writing this Jay. I think you have succeeded in making your position clearer. Let’s start with a few items that we probably agree on:

    1. Government granted monopoly on the provision of a service is a bad idea.

    2. Regulatory capture is a very real phenomenon we should guard against.

    3. In transitioning from monopolistic practices, we should encourage a variety providers and allow consumers to pursue happiness in a way that is respectful and tolerant of diverse needs, views and wants.

    I also agree that RSD enthusiasts are probably underestimating the danger of regulatory capture. I’ll go further and say that the idea of including private schools in some sort of single application/RSD system makes my spidey sense go off. I want parents to decide on their providers and would want to limit a public role to that of encouraging transparency.

    Note however that many charter and voucher essentially in the same boat as RSD. For instance, the AZ Charter Board has been the defacto single charter creator since the State Board opted out many years ago. Recognizing the problem of this, I was a part of an effort to get universities included as authorities 8 years ago or so. As yet however, no AZ university to my knowledge has authorized a charter school. The law could and should be improved, but it does not follow that the Az charter school law is doing anything other than increasing the diversity of schooling options thus far.

    Moreover the AZ Charter School Board wields very similar life and death powers over charter schools in terms of opening and closures that seems to trouble you in the case of RSD. I don’t like the fact that my state has a defacto single authority to exercise these powers, but I don’t view this imperfection as making the AZ Charter Schools Board a one ring destined to snuff out public school diversity. Anyone that tries that is going to have one hell of a fight on their hands- the genie is out of the bottle.

    Moving on to the example of New Orleans, I think it is a favorable development to see a long dysfunctional district leverage their supply of school buildings to bring in new school operators. This is an unambiguous improvement in choice and diversity. It was a personally reasonable approach to take after the hurricane. It is showing promising results. There is a danger of capture and reversal, but it seems broadly similar to the threat in AZ to me. I further suspect that there will be an attempt to reverse matters in the future, agree that it should be guarded against, but suspect that the reactionaries will find themselves in a hell of a fight.

    • I think we largely agree. We both see Portfolio Districts, mayoral takeovers, and other One Ring arrangements as undesirable long-term, but as possibly acceptable short-term arrangements to facilitate a transition to decentralized control. I don’t think most Portfolio District advocates see it this way. I think most of them desire the Portfolio District as the ideal long-term solution. They don’t want to grab the One Ring to destroy it, as Bilbo does, they want to use it to defeat the bad guys, as Boromir does. Things didn’t end well for him.

  2. matthewladner says:

    You may recall the final scene of the third Matrix flick when the Architect meets with the Oracle. He asks her “How long do you think this peace will last?” She answers “As long as it can.”

    I’m not expecting the AZ Charter School Board to ever go away but, I don’t think charter schools are going away either.

    • An important part of your story about AZ is that the state charter board is different from the traditional public school board. If they were combined, as they are in Arkansas and other states, they probably would not have approved nearly as many charters and more would have been sub-par operators or focused exclusively on less desirable students. In Arkansas we have never met our very low limit of 24 charter schools and some of the current schools seem to be subpar operators. Dividing the regulator between charter and traditional rather than trying to rule all with One Ring appears important for the AZ success.

      • matthewladner says:

        My understanding of La RSD is that traditional has more or less gone the way of the dodo.

  3. Greg Forster says:

    Your argument here only addresses one government regulator v. multiple government regulators. I think we should also point out that choice programs create an inherent check on government regulators (single or multiple) by empowering parents. Thus a choice program has an inherent advantage when we compare the relative merits. See Jay’s argument in the second half of this post:


  4. […] argues that it’s very dangerous to have one entity regulate traditional, charter, and voucher schools; […]

  5. […] Them All:”  In a witty analogy to Lord of the Rings, prominent school choice scholar Professor Jay P. Greene has made the case that recovery school districts – or portfolio districts – give too much power to one person.  […]

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