Markets in education - Growing too large and too fast is hard

The publicly financed but independently run Charter Schools are often thought as the solution to addressing quality in school education in the US. It was, therefore, with great expectations that Michigan embraced Charter Schools a few years back in an effort to improve its schools. As a Times investigation indicates, the results have been less than benign, with less than 10% of high school seniors being "college ready" on reading tests,

Detroit schools have long been in decline academically and financially. But over the past five years, divisive politics and educational ideology and a scramble for money have combined to produced a public education fiasco that is perhaps unparalleled in the United States. While the idea was to foster academic competition, the unchecked growth of charters has created a glut of schools competing for some of the nation’s poorest students, enticing them to enroll with cash bonuses, laptops, raffle tickets for iPads and bicycles. Leaders of charter and traditional schools alike say they are being cannibalized, fighting so hard over students and the limited public dollars that follow them that no one thrives. Detroit now has a bigger share of students in charters than any American city except New Orleans, which turned almost all its schools into charters after Hurricane Katrina. But half the charters perform only as well, or worse, than Detroit’s traditional public schools...

To throw the competition wide open, Michigan allowed an unusually large number of institutions, more than any other state, to create charters: public school districts, community colleges and universities. It gave those institutions a financial incentive: a 3 percent share of the dollars that go to the charter schools. And only they — not the governor, not the state commissioner or board of education — could shut down failing schools. For-profit companies seized on the opportunity; they now operate about 80 percent of charters in Michigan, far more than in any other state. The companies and those who grant the charters became major lobbying forces for unfettered growth of the schools, as did some of the state’s biggest Republican donors... Even as Michigan and Detroit continued to hemorrhage residents, the number of schools grew. The state has nearly 220,000 fewer students than it did in 2003, but more than 100 new charter schools. As elsewhere across the country, charters concentrated in urban areas, particularly Detroit, where the public schools had been put under state control in 1999. In 2009, it was found to be the lowest-performing urban school district on national tests... Detroit was soon awash in choice, but not quality.

It has this on the dynamics of choice, 

Nationally, some charter school groups praise Michigan for allowing so many institutions to grant charters. But the practice has also allowed bad schools to languish: When universities have threatened to close them, other universities have granted another charter. By 2015, a federal review of a grant application for Michigan charter schools found an “unreasonably high” number of charters among the worst-performing 5 percent of public schools statewide. The number of charters on the list had doubled from 2010 to 2014. “People here had so much confidence in choice and choice alone to close the achievement gap,” said Amber Arellano, the executive director of the Education Trust Midwest, which advocates higher academic standards. “Instead, we’re replicating failure.”

The campaign to attract students would not be out of place even in Kota in Rajasthan,

With all the new schools, Detroit has roughly 30,000 more seats, charter and traditional public, than it needs. The competition to get students to school on count day — the days in October and February when the head count determines how much money the state sends each school — can resemble a political campaign. Schools buy radio ads and billboards, sponsor count day pizza parties and carnivals. They plant rows of lawn signs along city streets to recruit students, only to have other schools pull those up and stake their own.

And about the inequitable effects of such unfettered markets and choice in Detroit,

Charter schools are concentrated downtown, with its boom in renovation and wealthier residents. With only 1,894 high school age students, there are 11 high schools. Meanwhile, northwest Detroit — where it seems every other house is boarded up, burned, or abandoned — has nearly twice the number of high school age students, 3,742, and just three high schools. The northeastern part of the city is even more of an education desert: 6,018 high school age students and two high schools to serve them. In a city of 140 square miles, transportation adds another layer to school selection. Few schools offer busing. And Detroit, long defined by the auto industry, never invested much in public transportation. A mile and a half to school can become an hour-and-a-half journey. 

 The verdict after nearly two decades of markets and competition,

For parents, the search remains for good schools — charter or public.

Several lessons from this excellent long form. The point that unfettered markets, or even any unregulated market, can help achieve learning outcomes is pure logical fantasy and does not need any reiteration. I have also blogged several times that over a long enough period, greater choice is more likely to generate sub-optimal outcomes. 

The more important point here is that Michigan tried to expand Charters across the State is quick time and it failed. Doubtless Michigan's already weak education system had made the original challenge even more daunting. But even good school systems will struggle to cope up with the scope of what Michigan did. 

This has great relevance to public policy at large. The challenge is not so much as to produce islands of excellence as to use public policy to improve the general standards across entire systems. And, as the example of choice and vouchers has shown, the two are not exactly similar, maybe even contradictory, set of challenges. Governments in many parts of the world, especially in developing countries, face the challenge of turning around poor performing education and healthcare systems. They are attracted by innovations like Charter schools, vouchers, capitation payment model, health insurance, PPPs and so on in the belief that such initiatives can quickly help improve general standards. But as the example of Michigan and several others from across the world and over time show, the desired transformations rarely ever happen. 

Thailand did not develop its capitation model of healthcare in a few years. It carefully built up its primary care and other public facilities over decades so that when it embraced the capitation model at the turn of the millennium, it had in place the foundations to support the model. Similarly, Finland developed its impressive school system over decades of effort. It struggled over generations to create the present eco-system which values education and teaching.

Transforming poor quality education and health systems take time and are generational projects. It requires careful design, persistent and laborious efforts, close engagement among stakeholders, flexibility in implementation that allows local initiative, enormous patience, and deep tolerance for failures. Unfortunately, the political and administrative dynamics of change are not readily amenable to such long drawn approaches. 

In the circumstances, the best that can be done is to understand the challenge in its true perspective. Then a two-track approach would have to be followed. At one level, the long-term enablers have to be gradually eased in to achieve the transformation. At the more immediate level, there has to be a steady stream of initiatives that respond to political and administrative exigencies and imperatives. I'll try to outline the specifics of such a strategy in coming posts.