American Jewish Committee Endorses Abolishing Public Schools?

July 21, 2016

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(Guest Post by Jason Bedrick)

In response to calls at the Republican National Convention for more school choice, the American Jewish Committee’s spokesperson announced that not only do they oppose the taxpayer subsidy of private schools, but they even oppose public schools. See for yourself:

For more than 50 years, school choice has been a contentious issue for American Jews. Decades ago, mainstream Jewish organizations were vociferous in defending the separation of church-and-state, worried that if the government got involved in funding religious schools in any way, it could lead to infringement on Jewish religious freedom. Those fears, according to American Jewish Committee associate general counsel Marc Stern, remain today.

“The Jewish community has long been concerned that government not be in the business of supporting private education,” Stern said. “Communities that want to maintain religious schools should pay for them on their own without government support. People shouldn’t be taxed to support things they don’t agree with.”

Okay, so he didn’t say it explicitly, but Mr. Stern is intelligent and knowledgeable enough to know that lots of Americans object to what is taught in public schools, so this was a clear endorsement by the AJC for the complete abolition of public schooling.

Heck, this “people shouldn’t be taxed to support things they don’t agree with” principle is something that my colleagues at the Cato Institute could really get behind. I’m sure that by the time the sun sets today, we could assemble a very long list of government programs to which many Americans object and we welcome the AJC’s support in abolishing them as well.

Then again, it’s always possible that the AJC’s attorney misspoke. Perhaps they’re not really in favor of abolishing the public school system and hundreds of other government programs, and the attorney just didn’t think through the logic of what he was saying. But if the AJC isn’t embracing anarcho-capitalism, then their “people shouldn’t be taxed to support things they don’t agree with” objection has no force or consistency. What they really mean is “we don’t think people should be taxed to pay for things we don’t like, but they should be taxed to pay for things that we do like,” which is not really a principle so much as an expression of political will — a political will that is fundamentally anti-pluralist, as I’ve explained previously:

Let’s consider an imaginary “public” school district where there are three groups of people: Hobbits, Ewoks, and Terrans. Each groups has very different and passionately held views about what should be taught in school and how it should be taught. All three groups are required to pay taxes to support the district school, which is ostensibly nonpartisan, nondenominational, and open to all. However, the majority of the district is Terran so the school reflects the Terran preferences. When the Hobbits and Ewoks open their own schools and seek equal per-pupil support from the local government, the indignant Terrans respond that the district school is meant for everyone. “It’s your right to open your own schools,” explain the Terrans, “but it’s your responsibility to pay for them.” Thus the majority brazenly forces minority groups either to abandon their values or to pay for two school systems. And lower-income minorities may have no choice at all.

Fortunately, other Jewish groups understand this and are willing to advocate for the greater freedom and pluralism that school choice programs deliver:

The Orthodox Union and the Orthodox Rabbinical Council of America have both successfully lobbied for New York City and New York State to fund programs like security and special education for private schools. According to Maury Litwack, the OU Advocacy Center’s director of state political affairs, more than 100,000 students attend Jewish day school in New York City.

“For parents who send their kids to Jewish day school, tuition is prohibitively high,” Litwack said. “They pay property taxes and a variety of other taxes. In American education there’s too often a one-size-fits-all approach to education. There should be more options.”

Republicans agree. A section of the party’s 2015 platform, titled “Choice in Education,” says, “Empowering families to access the learning environments that will best help their children to realize their full potential is one of the greatest civil rights challenges of our time. A young person’s ability to succeed in school must be based on his or her God-given talent and motivation, not an address, ZIP code, or economic status.”

The AJC is an organization that claims to be committed to the principle of pluralism. I look forward to a day when they fully embrace the ideal of pluralism in education.

[H/t David Benkof. Cross-posted at Ricochet.]


Regulating School Choice: The Debate Continues

March 9, 2016

Design vs Experience

(Guest Post by Jason Bedrick)

Last week, the Cato Institute held a policy forum on school choice regulations (video here). Two of our panelists, Dr. Patrick Wolf and Dr. Douglas Harris, were part of a team that authored one of the recent studies finding that Louisiana’s voucher program had a negative impact on participating students’ test scores. Why that was the case – especially given the nearly unanimously positive previous findings – was the main topic of our discussion. Wolf and I argued that there is reason to believe that the voucher program’s regulations might have played a role in causing the negative results, while Harris and Michael Petrilli of the Fordham Institute pointed to other factors.

The debate continued after the forum, including a blog post in which Harris raises four “problems” with my arguments. I respond to his criticisms below.

The Infamous Education Productivity Chart

Problem #1: Trying to discredit traditional public schools by placing test score trends and expenditure changes on one graph. These graphs have been floating around for years. They purport to show that spending has increased much faster than expenditures [sic], but it’s obvious that these comparisons make no sense. The two things are on different scales. Bedrick tried to solve this problem by putting everything in percentage terms, but this only gives the appearance of a common scale, not the reality. You simply can’t talk about test scores in terms of percentage changes.

The more reasonable question is this: Have we gotten as much from this spending as we could have? This one we can actually answer and I think libertarians and I would probably agree: No, we could be doing much better than we are with current spending. But let’s be clear about what we can and cannot say with these data.

Harris offers a reasonable objection to the late, great Andrew Coulson’s infamous chart (shown below). Coulson already addressed critics of his chart at length, but Harris is correct that the test scores and expenditures do not really have a common scale. That said, the most important test of a visual representation of data is whether the story it tells is accurate. In this case, it is, as even Harris seems to agree. Adjusted for inflation, spending per pupil in public schools has nearly tripled in the last four decades while the performance of 17-year-olds on the NAEP has been flat.

U.S. Education Spending and Productivity

Producing a similar chart with data from the scores of younger students on the NAEP would be misleading because the scale would mask their improvement. But for 17-year-olds, whose performance has been flat on the NAEP and the SAT, the story the chart tells is accurate.

Voucher Regulations Are Keeping Private Schools Away

Problem #2: Repeating arguments that have already been refuted. Bedrick’s presentation repeated arguments about the Louisiana voucher case that I already refuted in a prior post. Neither the NBER study nor the survey by Pat Wolf and his colleagues provide compelling evidence that existing regulations are driving out potentially more effective private schools in the Louisiana voucher program, which was a big focus of the panel.

Here Harris attacks a claim I did not make. He is correct that there is no compelling evidence that regulations are driving out higher-quality private schools, but no one claimed that there was. Rather, I have repeatedly argued that the evidence was “suggestive but not conclusive” and speculated in my presentation that “if the enrollment trends are a rough proxy [for quality], though we can’t prove this, then it would suggest that the higher-quality schools chose not to participate” while lower-quality schools did.

Moreover, what Harris claims he refuted he actually merely disputed – and not very persuasively. In the previous post he mentions, he minimized the role that regulation played in driving away private schools:

As I wrote previouslythe study he cites, by Patrick Wolf and colleagues, actually says that what private schools nationally most want changed is the voucher’s dollar value. In Louisiana, the authors reported that “the top concern was possible future regulations, followed by concerns about the amount of paperwork and reports. When asked about their concerns relating to student testing requirements, a number of school leaders expressed a strong preference for nationally normed tests” (italics added). These quotes give a very different impression that [sic] Bedrick states. The supposedly burdensome current regulations seem like less of a concern than funding levels and future additional regulations–and no voucher policy can ever insure against future changes in policy.

Actually, the results give a very different impression than Harris states. The quote Harris cites from the report is regarding the concerns of participating schools, but the question at hand is why the nonparticipating schools opted out of the voucher program. Future regulations was still the top concern for nonparticipating schools, but current regulations were also major concerns. Indeed, the study found that 9 of the 11 concerns that a majority of nonparticipating private schools said played a role their decision not to participate in the voucher program related to current regulations, particularly around admissions and the state test.

"Views from Private Schools," by Brian Kisida, Patrick J. Wolf, and Evan Rhinesmith, American Enterprise Institute

Source: ”Views from Private Schools,” by Brian Kisida, Patrick J. Wolf, and Evan Rhinesmith, American Enterprise Institute (page 19)

Nearly all of the nonparticipating schools’ top concerns related to the voucher program’s ban on private schools using their own admissions criteria (concerns 2, 3, 5, 7, 8 and 11) or requiring schools to administer the state test (concerns 6, 9, 10, and possibly 7 again). It is clear that these regulations played a significant role in keeping private schools away from the voucher program. The open question is whether the regulations were more likely to drive away higher-quality private schools. I explained why that might be the case, but I have never once claimed that we know it is the case.

Market vs. Government Regulations in Education

Problem #3: Saying that unregulated free markets are good in education because they have been shown to work in other non-education markets. […] For example, the education market suffers from perhaps the worst information problem of any market–many complex hard-to-measure outcomes most of which consumers (parents) cannot directly observe even after they’ve chosen a school for their child. Also, since students can realistically only attend schools near their homes, and there are economies of scale in running schools, that means there will generally be few practical options (unless you happen to live in a large city with great public transportation–very rare in the U.S.). And the transaction costs are very high to switch schools. And there are equity considerations. And … I could go on.

Harris claims that a free market in education wouldn’t work because education is uniquely different from other markets. However, the challenges he lists – information asymmetry, difficulty measuring intangible outcomes, difficulties providing options in rural areas, transaction costs for switching schools – aren’t unique to K-12 education at all. Moreover, there is no such thing as an “unregulated” free market because market forces regulate. As I describe below, while not perfect, these market forces are better suited than the government to address the challenges Harris raises.

Information asymmetry and hard-to-measure/intangible outcomes:

Parents need information in order to select quality education providers for their children. But are government regulations necessary to provide that information? Harris has provided zero evidence that it is, but there is much evidence to the contrary. Here the disparity between K-12 and higher education is instructive. Compared to K-12, colleges and universities operate in a relatively free market. Certainly, there are massive public subsidies, but they are mostly attached to students, and colleges have maintained meaningful independence. Even Pell vouchers do not require colleges to administer particular tests or set a single standard that all colleges must follow.

So how do families determine if a college is a good fit or not? There are three primary mechanisms they use: expert reviews, user reviews, and private certification.

The first category includes the numerous organizations that rate colleges, including U.S. News & World Report, the Princeton Review, Forbes, the Economist, and numerous others like them. These are similar to sorts of expert reviews, like Consumer Reports, that consumers regularly consult when buying cars, computers, electronics, or even hiring lawyers – all industries where the non-expert consumer faces a significant information asymmetry problem.

The second category includes the dozens of websites that allow current students and alumni to rate and review their schools. These are similar to Yelp, Amazon.com, Urban Spoon and numerous other platforms for end-users to describe their personal experience with a given product or service.

Finally, there are numerous national and regional accreditation agencies that certify that colleges meet a certain standard, similar to Underwriters Laboratories for consumer goods. This last category used to be private and voluntary, although now it is de factomandatory because accreditation is needed to get access to federal funds.

None of these are perfect, but then again, neither are government regulations. Moreover, the market-based regulators have at least four major advantages over the government. First, they provide more comprehensive information about all those hard-to-measure and intangible outcomes that Harris was concerned about. State regulators tend to measure only narrow and more objective outcomes, like standardized test scores in math and English or graduation rates. By contrast, the expert and user reviews consider return-on-investment, campus life, how much time students spend studying, teaching quality, professor accessibility, career services assistance, financial aid, science lab facilities, study abroad options, and much more.

Second, the diversity of options means parents and students can better identify the best fit for them. As Malcolm Gladwell observed, different people give different weights to different criteria. A family’s preferences might align better with the Forbes rankings than the U.S. News rankings, for example. Alternatively, perhaps no single expert reviewer captures a particular family’s preferences, in which case they’re still better off consulting several different reviews and then coming to their own conclusion. A single government-imposed standard would only make sense if there was a single best way to provide (or at least measure) education, we knew what it was, and there was a high degree of certainty that the government would actually implement it well. However, that is not the case.

Third, a plethora of private certifiers and expert and user reviews are less likely to create systemic perverse incentives than a single, government standard. As it is, the hegemony of U.S. News & World Report’s rankings created perverse incentives for colleges to focus on inputs rather than outputs, monkey around with class sizes, send applications to students who didn’t qualify to increase their “selectivity” rating, etc. If the government imposed a single standard and then rewarded or punished schools based on their performance according to that standard, the perverse incentives would be exponentially worse. The solution here is more competing standards, not a single standard.

Fourth, as Dr. Howard Baetjer Jr. describes in a recent edition of Cato Journal, whereas “government regulations have to be designed based on the limited, centralized knowledge of legislators and bureaucrats, the standards imposed by market forces are free to evolve through a constant process of evaluation and adjustment based on the dispersed knowledge, values, and judgment of everyone operating in the marketplace.” As Baetjer describes, the incentives to provide superior standards are better aligned in the market than for the government:

Incentives and accountability also play a central role in the superiority of regulation by market forces. First, government regulatory agencies face no competition from alternative suppliers of quality and safety assurance, because the regulated have no right of exit from government regulation: they cannot choose a better supplier of regulation, even if they want to. Second, government regulators are paid out of tax revenue, so their budget, job security, and status have little to do with the quality of the “service” they provide. Third, the public can only hold regulators to account indirectly, via the votes they cast in legislative elections, and such accountability is so distant as to be almost entirely ineffectual. These factors add up to a very weak set of incentives for government regulators to do a good job. Where market forces regulate, by contrast, both goods and service providers and quality-assurance enterprises must continuously prove their value to consumers if they are to be successful. In this way, regulation by market forces is itself regulated by market forces; it is spontaneously self-improving, without the need for a central, organizing authority.

In K-12, there are many fewer private certifiers, expert reviewers, or websites for user reviews, despite a significantly larger number of students and schools. Why? Well, first of all, the vast majority of students attend their assigned district school. To the extent that those schools’ outcomes are measured, it’s by the state. In other words, the government is crowding out private regulators. Even still, there is a small but growing number of organizations like GreatSchools, Private School Review, School Digger, andNiche that are providing parents with the information they desire.

Options in rural areas:

First, it should be noted that, as James Tooley has amply documented, private schools regularly operate – and outperform their government-run counterparts – even in the most remote and impoverished areas in the world, including those areas that lack basic sanitation or electricity, let alone public transportation. (For that matter, even the numerous urban slums where Tooley found a plethora of private schools for the poor lack the “great public transportation” that Harris claims is necessary for a vibrant education market.) Moreover, to the extent rural areas do, indeed, present challenges to providing education, such challenges are far from unique. Providers of other goods and services also must contend with reduced economies of scale, transportation issues, etc.

That said, innovations in communication and transportation mean these obstacles are less difficult to overcome than ever before. Blended learning and course access are already expanding educational opportunities for students in rural areas, and the rise of “tiny schools” and emerging ride-sharing operations like Shuddle (“Uber for kids”) may soon expand those opportunities even further. These innovations are more likely to be adopted in a free-market system than a highly government-regulated one.

Test Scores Matter But Parents Should Decide 

Problem #4: Using all this evidence in support of the free market argument, but then concluding that the evidence is irrelevant. For libertarians, free market economics is mainly a matter of philosophy. They believe individuals should be free to make choices almost regardless of the consequences. In that case, it’s true, as Bedrick acknowledged, that the evidence is irrelevant. But in that case, you can’t then proceed to argue that we should avoid regulation because it hasn’t worked in other sectors, especially when those sectors have greater prospects for free market benefits (see problem #3 above). And it’s not clear why we should spend a whole panel talking about evidence if, in the end, you are going to conclude that the evidence doesn’t matter.

Once again, Harris misconstrues what I actually said. In response to a question from Petrilli regarding whether I would support “kicking schools out of the [voucher] program” if they performed badly on the state test, I answered:

No, because I don’t think it’s a wise move to eliminate a school that parents chose, which may be their least bad option. We don’t know why a parent chose that school. Maybe their kid was being bullied at their local public school. Maybe their local public school that they were assigned to was not as good. Maybe there was a crime problem or a drug problem.

We’re never going to have a perfect system. Libertarians are not under the illusion that all private schools are good and all public schools are bad… Given the fact that we’ll never have a perfect system, what sort of mechanism is more likely to produce a wide diversity of options, and foster quality and innovation? We believe that the market – free choice among parents and schools having the ability to operate as they see best – has proven over and over again in a variety of industries to have better outcomes than Mike Petrilli sitting in an office deciding what quality is… as opposed to what individual parents think [quality] is.

Harris then responded by claiming that I was saying the evidence was “irrelevant,” to which I replied:

It’s irrelevent in terms of how we should design the policy, in terms of whether we should kick [schools] out or not, but I think it’s very important that we know how well these programs are working. Test scores do measure something. They are important. They’re not everything, but I think they’re a pretty decent proxy for quality…

In other words, yes, test scores matter. But they are far from the only things that matter. Test scores should be one of many factors that inform parents so that they can make the final decision about what’s best for their children, rather than having the government eliminate what might well be their least bad option based on a single performance measure.

I am grateful that Dr. Harris took the time both to attend our policy forum and to continue the debate on his blog afterward. I look forward to continued dialogue regarding our shared goal of expanding educational opportunity for all children.

(Cross-posted at Cato-at-Liberty.)

 


Overregulation Is All You Need: A Response to Paul Bruno

February 29, 2016

6-blind-men-hans

(Guest Post by Jason Bedrick)

Over at the Brookings Institution’s education blog, Paul Bruno offers a thoughtful critique of  Overregulation Theory (OT), the idea that government regulations on school choice programs can undermine their positive effects. Bruno argues that although OT is “one of the most plausible explanations” of the negative results that two studies of Louisiana’s voucher program recently found, it is not “entirely consistent with the available evidence” and “does not by itself explain substantial negative effects from vouchers.”

I agree with Bruno–and have stated repeatedly–that the studies’ findings do not conclusively prove OT. That said, I believe both that OT is consistent with the available evidence and that it could explain the substantial negative effects (though I think it’s likely there are other factors at play as well). I’ll explain why below, but first, a shameless plug:

On Friday, March 4th at noon, the Cato Institute will be hosting a debate over the impact of regulations on school choice programs featuring Patrick Wolf, Douglas Harris, Michael Petrilli, and yours truly, moderated by Neal McCluskey. If you’re in the D.C. area, please RSVP at this link and join us! Come for the policy discussion, stay for the sponsored lunch!

Is the evidence consistent with Overregulation Theory?

Bruno notes that the differences in enrollment trends between participating and non-participating private schools is consistent with OT. Participating schools had been experiencing declining enrollment in the decade before the voucher program was enacted whereas non-participating schools had slightly increasing enrollment on average. This is consistent with the OT’s prediction that better schools (which were able to maintain their enrollment or grow) would be more likely eschew the vouchers due to the significant regulatory burden, while the lower-performing schools (which were losing students) were more desperate for students and funding, and were therefore more willing to jump through the voucher program’s regulatory hoops. However, Bruno calls this evidence into question:

For one thing, the authors of the Louisiana study specifically check to see if learning outcomes vary significantly between schools experiencing greater or lesser prior enrollment declines, and find that they do not. (Bedrick acknowledges this, but doubts there was enough variation in the enrollment trends of participating schools to identify differences.)

We should be skeptical of the explanatory value of the study’s enrollment check. There is no good reason to assume that the correlation between enrollment growth or decline among the small sample of participating schools (which had significantly negative growth, on average) is the same as among all private schools in the state. Making such an assumption is like a blind man holding onto the truck of an elephant and assuming that he’s holding a snake.

The study does not show the variation in enrollment trends among the participating and non-participating schools, but we could imagine a scenario where the enrollment trend among participating schools ranged, say, from -25% to +5% while the range at non-participating schools was -5% to +25%. As shown in the following charts (which use hypothetical data), there may be a strong correlation between enrollment trends and outcomes among the entire population, while there is little correlation in the subset of participating schools.

Enrollment Growth and Performance, Participating Private Schools (Hypothetical)

Screen Shot 2016-02-29 at 4.57.05 PM

Enrollment Growth and Performance, All Private Schools (Hypothetical)

Screen Shot 2016-02-29 at 10.05.29 PM.png

In short, looking at the relationship between enrollment growth and performance in the narrow subset of participating schools doesn’t necessarily tell us anything about the relationship between enrollment growth and performance generally. Hence the study’s “check” that Bruno cites does not provide evidence against OT.

Is there evidence that regulations improve performance?

Bruno also cites evidence that regulations can have a positive impact on student outcomes:

Joshua Cowen of Michigan State University also points out that there is previous evidence of positive effects from accountability rules on voucher program outcomes in other states (though regulations may differ in Louisiana).

The Cowen article considers the impact of high-stakes testing imposed on the Milwaukee voucher program during a multi-year study of that program. The “results indicate substantial growth for voucher students in the first high-stakes testing year, particularly in mathematics, and for students with higher levels of earlier academic achievement.” But is this strong evidence that regulations improve performance? One of the authors of both the original Milwaukee study and the cited article–JPG all-star, Patrick Wolf–cautions against over-interpreting these results:

Ours is one study of what happened in one year for one school choice program that switched from low-stakes testing to high-stakes testing.  As we point out in the report, it is entirely possible that the surge in the test scores of the voucher students was a “one-off” due to a greater focus of the voucher schools on test preparation and test-taking strategies that year.  In other words, by taking the standardized testing seriously in that final year, the schools simply may have produced a truer measure of student’s actual (better) performance all along, not necessarily a signal that they actually learned a lot more in the one year under the new accountability regime.

If we had had another year to examine the trend in scores in our study we might have been able to tease out a possible test-prep bump from an effect of actually higher rates of learning due to accountability.  Our research mandate ended in 2010-11, sadly, and we had to leave it there – a finding that is enticing and suggestive but hardly conclusive.

It’s certainly possible that the high-stakes test improved actual learning. But it’s also possible–and, I would argue, more probable–that changing the stakes just meant that the schools responded to the new incentive by focusing more on test-taking strategies to boost their scores.

For that matter, even if it were true that the regulations actually improved student learning, that does not contradict Overregulation Theory. Both advocates and skeptics of the regulations believe that schools respond to incentives. Those of us who are concerned about the impact of the regulations don’t believe that they can’t improve performance. Rather, our concern is that regulations imposed from above are less effective at improving performance than the incentives created by direct accountability to parents in a robust market in education, and may have adverse unintended consequences.

To explain: We’re concerned that regulations forbidding the use of a school’s preferred admissions standards or requiring the state test (which is aligned to the state curriculum) might drive away better-performing schools, leaving parents to choose only among the lower-performing schools. We’re concerned that price controls will inhibit growth, providing schools with an incentive only to fill empty seats rather than to scale up. We’re concerned that mandatory state tests will inhibit innovation and induce conformity. None of these concerns rule out the possibility (or, indeed, the likelihood) that over time, requiring private schools to administer the state test and report the results and/or face sanctions based on test performance will improve the participating schools’ performance on that test.

Again: we agree that schools respond to incentives. We just think the results of top-down incentives are likely to be inferior to the results of bottom-up choice and competition, which have proved to be powerful tools in so many other fields for spurring innovation and improving quality.

Can Overregulation Theory alone explain the negative results in Louisiana?

Finally, Bruno questions whether OT alone explains the Louisiana results:

[E]ven if regulation prevented all but the worst private schools from participating, this would explain why students did not benefit from transferring into them, but not why students would transfer into them in the first place.

So Overregulation Theory might be part of the story in explaining negative voucher effects in Louisiana, but it is not by itself sufficient. To explain the results we see in the study, it is necessary to tell an additional story about why families would sort into these apparently inferior schools.

Bruno offers a few possible stories–that parents select schools “that provide unobserved benefits,” that the voucher program “induced families to select inferior schools,” or that parents merely “assume any private school must be superior to their available public schools”–but any of these can be consistent with OT.  Indeed, the second story Bruno offers is practically an extension of OT: if the voucher regulations truncate supply so that it is dominated by low-quality schools, and the government gives false assurances that they have vetted those schools, then it is likely that we will see parents lured into choosing inferior schools.

That’s not to say that there are no other factors causing the negative results. It’s likely that there are. (I find Douglas Harris’s argument that the private schools’ curricula did not align with the state test in the first year particularly compelling, though I don’t think it entirely explains the magnitude of the negative results.) We just don’t have any compelling evidence that OT is wrong, and OT can suffice to explain the negative results.

I will conclude as I began: expressing agreement. I concur with Bruno’s assessment that “it is likely that the existing evidence will not allow us to fully adjudicate between competing hypotheses.” Indeed, it’s likely that future evidence won’t be conclusive either (it rarely is), but I hope that further research will shed more light on this important question. Bruno concludes by calling for greater efforts to “understand how families determine where their children will be educated,” noting that by understanding how and why parents might make “sub-optimal — or even harmful” decisions will help “maximize the benefits of school choice while mitigating its risks.” These are noble goals and I share Bruno’s desire to pursue them. I just hope that policymakers will approach what we learn with a spirit of humility about what they can accomplish.


Petrilli’s Regulatory Porridge

January 28, 2016

goldilocks

(Guest Post by Jason Bedrick)

Fordham’s Michael Petrilli offers new taxonomy for school choice tribes dividing the school choice world in three: Purists, Nannies, and Realists.

First, as Matt noted, this is not Mike’s first foray into Hemisphere Fallacy territory. (Or the second. Or even the third.) Like the guy who thinks anyone who is more religious is crazy and anyone who is less religious is a heretic, Mike thinks he has found the Perfect Goldilocksian Mean and everyone else is wrong. In Mike’s view, those who support more regulation than he does are paternalist Nannies, and those who support less regulation are utopian Purists, but the temperature of his regulatory porridge is just right.

Second, as I noted on Twitter, it’s adorable that Mike thinks he’s not a Nanny. He decries their “micromanagement” but he supports forcing private schools to administer the state test (de facto determining what is taught when and even how), as well as price controls that economists will tell you leads to shortages and obliterates the essential price signal (without which we may have competition, but we most certainly do not have a functioning market). He may fancy himself a “Realist” but, if these categories really mean anything, he just has minor disagreements with his fellow Nannies.

Third, Mike is engaging, once again, in the Means and Ends Fallacy. It goes something like this:

I think X is a problem. I believe Solution Y solves X. Group A opposes Solution Y, therefore Group A must not think X is really a problem.

Of course, this is a fallacy because it is entirely possible (as is the case here) that Group A agrees that X is a problem but doesn’t think Solution Y actually solves it. Mike thinks his preferred regulations solve the problem of bad schools, but we think those regulations are more likely to have adverse effects. More on that in a moment.

Mike accuses the “Purists” (those who, like Milton Friedman, conclude based on the evidence from nearly every other industry that markets spur innovation and lead to greater quality and efficiency) of being utopian. He writes:

Start with the Purists. I’m skeptical of all utopian visions, including theirs—one imagining that a full-fledged system of choice (perhaps through universal Education Savings Accounts) will yield greater innovation, productivity, and customer satisfaction—and produce better-educated young people to boot.

But there’s nothing utopian about that. We see that ESAs have already begun to produce greater innovation, productivity, and customer satisfaction. We don’t yet have any data on test scores or graduation rates, but we have no reason to believe that ESAs will underperform the many voucher programs that have produced positive results. No one in the free-market crowd is expecting miracles. We’re expecting the sort of incremental improvement that the market regularly brings about through the process of experimentation, evaluation, and evolution.

(For that matter, the most utopian schemes in education come from the Nannies. Can you imagine a more fantastically utopian scheme than “No Child Left Behind”? Is there a more utopian slogan than that anywhere in education policy? And did anyone in the administration really believe we’d ever achieve 100% proficiency in any state, let alone every state? Either they set up the nation to fail or they were delusional. Or perhaps they just set up the DOE for a naked power grab. But I digress.)

Mike’s central challenge to the Friedmanite crowd is the Payday Lender Problem. What do we do about bad private schools?

First of all, Mike doesn’t have a whole lot of evidence that the government does a better job ensuring quality than the market. Indeed, the Louisiana debacle should give him great pause about that article of faith.

Second, eliminating the least-bad option doesn’t guarantee a better option. Payday lending serves an important function in the market (in the Third World, we call it “microlending,” a concept for which Muhammad Yunus won a Nobel Peace Prize). Poor people who need funds to cover rent or buy food while waiting for payday often turn to payday lenders. If they repay the loan on time, the fees are generally marginal. If they repay late, the interest rates can be exorbitant, especially if (misleadingly) expressed in annual terms. (The interest is so high both because the loans are so small and because the rate of default is so high, which is why banks generally just refuse to lend to the poor.) But eliminating the payday lenders can have serious unintended consequences that make the poor even worse off. The payday lender may charge a steep fee for late payment, but at least Rocky Balboa doesn’t come break your legs.

Kicking a school with poor test scores out of a voucher program doesn’t guarantee those poor kids a seat at a better school. Rather, the state just eliminates that kid’s least-bad alternative. Even in Louisiana, where the voucher schools appear to be doing much worse on the state test than the district school alternatives, the families who chose those schools may well have had good reasons for doing so. Perhaps they were safer. Perhaps they had higher graduation rates. We don’t know. But those families chose them for a reason and they may well be worse off overall if deprived of that choice.

Third, as Michael McShane explained previously, the market process has proven time and again to significantly improve absolute quality (and efficiency) over time:

Cars today are uniformly better than cars in 1950. They are safer. They are faster. They are more comfortable. They are more fuel efficient.  But it wasn’t a clear upward-sloping line to get here. People bought Edsel’s in the 50’s, Corvairs in the 60’s, Chevettes in the 70’s, Yugo’s in the 80’s, Suzuki Sidekicks in the 90’s, and Pontiac Aztecs in the 00’s. These were bad cars.

But “bad” has two meanings in this case, an objective one and a relative one. There are relatively bad cars out there today. That is, my hail-damaged ’05 Kia Spectra with no cruise control and a blown-out right front speaker is worse than Jay-Z’s Maybach on almost every calculable measure, relatively speaking. But my Spectra, which is still purring like a kitten after over 100,000 miles with darn near nothing more than oil changes, tires, and brake pads is a helluva lot better than the burn-out-after-five-years cars that automakers made for decades.  That’s absolute quality.

Markets work when the spectrum of relative quality drives improvements in absolute quality.  Someone sees my little tin can driving down the road and says “I want to buy a car that doesn’t look like it’s going to blow away in a stiff breeze” and cars get less tin-canny.  Someone buys a Ford Excursion and then gas prices go up and says, “I’m never doing that again” and cars get more fuel efficient. It’s a slow winnowing process, but over time it is superior to centralized systems, that, for example, made the Trabant in an essentially unchanged manner for over three decades.

Rather than thinking we can regulate bad schools out of existence, a better goal is to develop a system that continuously improves what we think a “bad” school is.

Mike Petrilli is right to be worried about kids who are in bad schools today, but the regulations he proposes to ensure that those students are attending relatively good schools interfere with the market process that could otherwise be driving up absolute quality for everyone (and, as Louisiana has shown, those kids may end up in low-performing schools anyway).

Imagine if government officials, following Mike’s logic, had decided decades ago that every low-income family should have access to a phone. Now, these Realist officials aren’t Nannies — they’re not going to have the government make the phones or micromanage the specs. They’re just going to ensure that everyone has access to a good phone, so they create a phone voucher but prohibit companies selling phones from charging more than the value of the voucher. What would have happened?

Well, there’s the seen and the unseen. We would have seen, perhaps, that everyone would have had access to a phone and many would have applauded that (although given the price controls, it’s likely that supply would not have met demand). But what we wouldn’t have seen was that the iPhone had not been invented. With no way to charge more than the meager voucher, there’d be no market for expensive smartphones. And that wouldn’t just have harmed the wealthy, it would also have harmed the poor. After all, Walmart now sells a $10 smartphone that has better specs that the original iPhone. Innovations that at first benefit the wealthier early adopters tend to benefit even the poor after a while.

In short, Mike’s admirable passion to help the poor immediately through state action may well harm them in the medium-to-long run without any guarantee of actually helping them in the short run. That doesn’t sound very Realist to me.

 

 

 


Protecting School Choice from the State

October 2, 2015

[Guest Post by Jason Bedrick]

As economists have understood for more than half a century, government agencies charged with regulating industries are often subject to regulatory capture. Rather than protect consumers from bad actors in the industries they were created to oversee, regulators too often develop cozy relationships with industry leaders and work at their behest to advance their interests. In Free to Choose, Milton and Rose Friedman detailed a particularly egregious example: the Interstate Commerce Commission (ICC).

Established in 1887, the ICC’s mission was to regulate the powerful railroad industry, which critics accused of engaging in cartel-like price fixing and market sharing. Instead, the railroad industry took almost immediate control of the ICC. The ICC’s first commissioner, Thomas Cooley, was a lawyer who had long represented the railroads and, as the Friedmans explained, many of the agency’s the bureaucrats “were drawn from the railroad industry, their day-to-day business tended to be with railroad people, and their chief hope of a lucrative future was with railroads.”

Rather than protect the consumers from the railroads, the ICC primarily protected the railroads. The ICC raised prices on consumers, shielded the railroads from state and local regulations, and even protected the railroads from outside competition. In the 1920s, the nascent trucking industry was emerging as the railroads’ most serious competitors. Like Uber against the taxi cartel, the lower-cost trucking industry benefited from the artificially high prices of the railroad cartel. And also like the taxi cartel, rather than seek deregulation, the railroad cartel turned to their friends in government to put the brakes on their “unregulated” competition. The bureaucrats all-too-happily complied. In 1933, the Motor Carrier Act gave the ICC authority over the trucking industry, which it used to limit the number of trucks that could operate on the roads and otherwise constrain the trucking industry. Fortunately, the railroad industry was significantly deregulated in the early 1980s and the ICC was abolished in 1995.

If regulatory capture is a common problem among the regulators of private industries, it can be even more acute when one government agency is overseeing other agencies. Bureaucrats at the various state departments of education tend to identify with the district schools they oversee and seek to protect them from outside competition. Lawmakers who support greater educational choice should keep this in mind when crafting choice policies. It is unwise to give an agency the power to regulate the primary competition to its core constituency.

Examples of state education agencies trying to undermine school choice initiatives abound. In Wisconsin, home to the nation’s first school voucher program, the Department of Public Instruction is currently subjecting private schools accepting vouchers to intrusive audits:

“I’ve been a CPA for 25 years and I’ve never seen anything like DPI’s approach to the audits of choice schools,” Noel Williams told Wisconsin Watchdog.

Williams, managing partner of Williams CPA in Milwaukee, has worked as an auditor for MPCP schools for 10 years. […]

“Although the law does allow DPI to follow-up with the auditor to clarify things that weren’t clear, in my opinion, DPI has grossly abused that power. Every one of the audit firms I’m acquainted with has gotten countless phone calls and emails on every audit report, requesting copies of data, clarification as to how they arrived at a conclusion.”

“It seems DPI’s intent has been to make it difficult and unpleasant to work with choice schools,” Williams said.

Indeed, the Wisconsin Institute for Law & Liberty and EAG News issued a report in 2013 detailing the Wisconsin DPI’s history of abuses against choice schools, including the use of audits to “harass and intimidate” them, withholding funding intended for private schools, forcing applicants to jump through hoops and provide lots of information and documentation not required by law, and more.

This summer, the Mississippi Department of Education initially limited the application period for the state’s new education savings account program to just 10 days in a move choice supporters called “unworkable” and “inconsistent with the law” which not only imposed no such application window, but actually stated that applications must be accepted on a rolling basis. The department eventually relented due to public outcry, but it’s unlikely to be the last of the DOE’s shenanigans.

Meanwhile, the New Hampshire Department of Education is trying to eliminate the town tuitioning program created by the village of Croydon (population 764). The village is too small to maintain its own school system so after 4th grade, it contracts with neighboring towns to provide schooling. In 2007, as its contract neared expiration, the village school board decided to pay for students to attend the district or private school of their family’s choice, similar to arrangements in nearby Vermont and Maine. However, the state DOE demanded that they cease and desist last fall. The town’s attorney, former NH supreme court justice Charles Douglas, argues that the state’s attempt to terminate the program is on shaky legal grounds. After nearly a year of negotiations, the state issued an ultimatum: terminate the program or the state will withhold its funding. The village is now trying to crowdfund a legal defense fund.

There are exceptions to the rule. The Florida Department of Education has a strong track record of supporting the state’s school choice programs. However, that could change as the political pendulum swings, as Indiana has demonstrated. And even where the top official at a state education agency support educational choice, there is no guarantee that the bureaucrats who preceded him or her will share that view or competently manage choice programs. Under John Huppenthal, Arizona’s DOE was ostensibly pro-school choice yet the agency repeatedly botched implementation of the state’s education savings account program.

Where some regulation or state program implementation is necessary, wise lawmakers have invested that authority in the state department of revenue, where the green-eyeshade bureaucrats are less likely to have an axe to grind against school choice than the state education establishment. Several states have already taken this approach, particularly for scholarship tax credit laws. Likewise, Nevada’s new education savings account is administered by the State Treasurer.

In “Fiddler on the Roof,” someone asks the town’s rabbi if there is a proper blessing for the tsar. “Of course!” replies the rabbi, “May G-d bless and keep the tsar… far away from us!” Educational choice policies should be similarly blessed.

[Originally posted at Cato-at-Liberty.]


Governor Brewer signs two small ESA expansions

April 23, 2014

 

(Guest Post by Matthew Ladner)

The 2014 Arizona session is winding up, and Arizona Governor Jan Brewer signed two bills to improve the ESA program today.  Collectively these bills will keep the dependents of military children if their parents are killed in the line of duty, will make it easier for pre-school aged special needs children to enter the program without enrolling in a public school, and will make the siblings of eligible children eligible to participate in order to make it more possible for families to send their children to the same or at least nearby schools. The 2014 session marks the last rodeo for Governor Brewer, who is term limited.

Governor Brewer signed the ESA and a number of improvements into law, several tax credit program improvements into law, called for the creation of A-F school grades and fought hard for an earned promotion policy on literacy. She also vetoed a few choice measures here and there including a small tax credit measure today. She hammered through a temporary three-year sales tax ballot measure to increase to stabilize K-12 funding, but then stayed true to her word and stayed out of it while the alphabet soup groups made a complete hash of trying to create a permanent tax increase. Governor Brewer began Arizona’s first steps towards funding results rather than just seat time.  Let’s hope that further steps will materialize.

It’s been an incredibly difficult and tumultuous five years- the Chinese curse “may you live in interesting times” springs readily to mind. Several of the K-12 initiatives Governor Brewer supported remain a work in progress, making it feel strange to think that someone else will be exercising the duty of governor next year.  There has been a great deal of political blood spilled over some very difficult issues, but in my book, Governor Jan Brewer got far more right than wrong in K-12 reform.


Use the Force MOOC! A 2013 retrospective

December 26, 2013

(Guest Post by Matthew Ladner)

The after-Christmas but before New Year period is always dominated by “Year in Review” retrospectives, so why not join in on the fun? Here at the Jayblog we dig new options for students and parents, so let’s take a look back at 2013.

Digital learning continues to surge. No one has yet established the free online degree that some nutball predicted in 2009, but events are moving in that direction. Dhawal Shah of EdSurge leads us off with a review of the progress of Massive Open Online Courses (MOOCs) in 2013. Shah includes MOOCilicous charts like:

MOOC 1

 

and…

MOOC 2and…

MOOC 3

All of this is quite impressive given the first MOOC rolled out in 2011. Shah provides analysis and 2014 predictions, so go read the article. Events seem to be conspiring to take a very sharp pin to a higher education tuition bubble. One cannot help but wonder how long we will go on debating public funding for online high-school courses when, ahhh, Stanford is giving them away for free and you can, well, get college credit for them.  The logical side of Kevin Carey’s brain (the one that writes about higher education) turned in a useful refutation of the hand-wringing over MOOC completion rates.

Remember where you heard it first- the day is coming when more people will be watching university lectures online than Baywatch reruns.

Please note: I did not say it would be any time soon…

On the K-12 front, the National Alliance for Public Charter Schools published an evaluation of state charter school laws finding widespread improvement between 2010 and 2013. Bottom line: break out the bubbly. Thirty-five states improved their laws, only one law regressed. Seven states “essentially overhauled” their laws with major improvements-Hawaii, Rhode Island, New Mexico, Indiana, South Carolina, Louisiana, and Colorado. Ten more states-Florida, Illinois, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, and Ohio made “notable improvements” in their charter law.

Here at Jayblog we have our annual measure of success in the private choice movement the Forster vs. Mathews school choice dinner bet. Greg either doubled or tripled the standard in 2011, and followed up by easily surmounting it once more in 2012.

In 2013, ooops Greg did it again!  Three-peat!  Two new states (Alabama and South Carolina) joined the school choice ranks, North Carolina went BIG on reform, including two new voucher programs, Ohio and Wisconsin passed new statewide programs, Arizona, Georgia, Iowa, Indiana and Utah improved existing programs.

So 2013 was a fine year overall for choice, grading on the curve of comparing it to past years. Compared to the needs of the country, this is all still painfully slow, so…


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