Beyond the Free Market: The Structure of School Choice

I. INTRODUCTION School choice is the most controversial reform in American education. When parents are given the right to choose, critics argue, children from advantaged families reap the rewards of new educational opportunities, while the less advantaged are left behind in the regular public schools-which, because of the outflow of good students and much-needed resources, are even less capable of serving them.1 These claims and others like them deserve to be taken seriously. If they are true, an expansion of parental choice threatens to undermine the public schools, lower academic achievement, and worsen problems of class and race that our nation has been struggling for decades to overcome. If they are not true, howeverbecause undesirable effects can be addressed and mitigated, or because choice can actually have very positive impacts on academic quality, social equity, and even the public schools themselves-then the case for choice would obviously be far more attractive. Which of these possibilities is correct? The answer is that they can each be correct, depending on how choice programs are designed. The simple way to think of it is that school choice always operates within a structure-a framework of governmental ruleswhich in turn shapes the kinds of outcomes that choice will ultimately generate. In some structures, choice will lead to serious problems, just as the critics claim. In others, its effects will be so small that they are hardly noticeable. And in still others it will have effects that are very positive. Different structures, different outcomes. The debate over school choice almost always revolves around simplified claims that fail to recognize the key role of structure. Participants are well aware that there are different kinds of choice, from vouchers to charter schools to magnet schools, and that different rules apply to each. But beyond these broad categories, much of the debate is generic and structure-free. Even academics find themselves talking about whether vouchers promote student achievement, or whether charter schools have competitive effects on regular public schools, without recognizing that these and other types of choice can all be structured in very different ways, leading to very different outcomes-and that it usually makes little sense to ask whether vouchers or charter schools in general have particular effects. The effects of vouchers and charter schools depend on the specific structures in which they are embedded, and they can only be understood and evaluated in that way. Precisely because this is so, the great challenge for educational reformers-and the great opportunity-is to choose the right structures. With the right structures, the problems sometimes associated with choice can be minimized or reversed. And the power of markets, which is not always and everywhere a good thing, can be harnessed for the promotion of important social values. As a practical matter, of course, decisions about structure get made through the political process. And politics being what it is, there is no guarantee that policy makers will actually adopt the structures that are judged best on analytical grounds. Even so, opportunities abound for them to make good decisions about structure and to use markets to social advantage within the education system. The aim of this article, then, is to highlight two simple topics that lie at the heart of the choice issue, but are only rarely the subject of serious discussion or study. The first has to do with the structure of choice. The second has to do with the choice of structure. These are the keys to understanding the role of choice in American education. II. THE ECONOMY, STRUCTURE, AND THE FREE MARKET A voucher system for American education was first proposed in 1955 by Milton Friedman, a libertarian economist whose contributions to economic theory and social policy have made him one of the most influential thinkers of the last century. …