Winning the Crowd: Harnessing Taxpayer Choices to Improve Educational Quality

This article presents a novel approach to the debate over the best way to improve educational policy. Building off of research showing that decisions made by groups can be superior to those made by even the smartest members of those groups, this piece shows how this concept of a "wise crowd" can be applied to improve outcomes even in a complex policy debate like educational policy. Educational policy currently exhibits a host of competing ideas for the best mechanism to improve student outcomes. These competing ideas can be seen in the wide variety of schools that exist and that compete for resources to implement their approaches. Public schools, charter schools, magnet schools, International Baccalaureate programs, secular private schools, religious private schools, home schooling — all of these and more offer unique approaches to education. Even within these types of schools, different educational teaching philosophies abound. Although some schools unquestionably have better outcomes for students than others, there is not universal agreement about how to measure the quality of any particular school because of the host of factors involved in educating a student. In other words, some schools are likely better than others, but separating good schools from weak ones is difficult.Because there are so many competing educational models and so many variables that go into what makes an educational program successful, the information needed to determine which programs work for which communities is likely spread over a diverse population. In addition, despite the disagreement about what constitutes educational quality, at least some measure of quantification of success is possible in the form of test scores, college placement, lifetime earnings, etc. Accordingly, although educational quality is in many respects the type of difficult policy choice that might not benefit from crowd wisdom as much as a decision with a clearly right and wrong solution, the fact that some measures of success can be quantified combined with the fact that, even in complex policy areas there are likely advantages to using crowd wisdom, make educational quality a ripe candidate for harnessing crowd wisdom.In order to apply crowd wisdom to educational policy choices, a mechanism must be in place to harness crowd wisdom and to channel it towards improving educational quality. This piece argues that the best mechanism to accomplish this goal is tax incentives. Specifically, this article focuses on a new type of tax incentive that several states have begun experimenting with: tax credits for contributions to school scholarship organizations that help fund scholarships and innovative educational programs. This piece adds an argument in support of these tax credits that is new to the literature — namely, that in addition to being effective solutions to some of the legitimate criticisms regarding other school choice programs (like vouchers), these credits can be an effective tool to harness crowd wisdom. These programs are still in their infancy in the states that have initiated them, and they likely have not been designed explicitly with the goal of maximizing crowd wisdom. Accordingly, while they provide a good starting point for the discussion about how tax credits can be used to harness crowd wisdom in educational policy, this piece argues that some of their characteristics should be redesigned with the explicit goal of harnessing crowd wisdom.