governments in New Zealand enacted a series of reforms whose result was a "quasivoucher" system in basic education (Wylie 1998). Control over the hiring of new teachers, operating budgets, the selection of academic missions, student fees, and local fundraising was transferred to self-governing school boards, which were composed of the principal, one teacher, and elected parents; and residency rules were loosened so that parents could choose any school. The system did not establish intense incentives based on enrollment, but schools started to compete for students anyway because they received more operating funds as enrollment increased, salary scales and prestige for principals were linked to school size, and schools gaining students were widely perceived to be "successful," which motivated school boards to expand enrollments.

Studies of parental choices in New Zealand found that schools serving largely disadvantaged groups saw their enrollments decline and their shares of minority students increase, and those serving advantaged populations were more likely to have their enrollments rise and their shares of minority students remain steady or fall, controlling for census-based predicted enrollments and, in secondary schools, certificate exam scores, which are not mandatory (Fiske and Ladd 2003, 2000). It appeared that white students were either fleeing schools with large minority populations or pursuing schools with advantaged students, and that minority students were fleeing schools with large minority populations. Additional research suggested minority students were less likely to consider a high status schools an option, and less likely to attend a nonlocal school (Smithfield Project 1995). While parents' decisions to flee schools with high minority populations might be individually rational, it is also consistent with the notion that in some contexts enrollment rates are biased estimates of school quality. There was also evidence of noise in the correlation between enrollment and quality: when one secondary school suffered a number of suicides, enrollment declined dramatically even though it was far from clear that the school atmosphere was causally associated with them (Fiske and Ladd 2000). In New Zealand, schools also used a variety of clever but legal techniques to recruit more advantaged populations: in 1997 the percentage of schools using these "enrollment schemes" was over 50 percent in Auckland and Christchurch, and 24 percent in Wellington (Fiske and Ladd 2000). The apparent increase in socioeconomic polarization in New Zealand was probably also related to the fact that schools were able to set their levels of student fees, as well as the fact less advantaged parents had a harder time accessing information about and traveling to the better schools.

Though systematic studies are not available, similar accounts have appeared regarding the voucher program in Sweden. From the early 1 990s onward, Sweden transferred control and management of schools to municipalities, which began to finance education based on, in approximately equal portions, their own revenues and block transfers from the central government. Municipalities now grant privately managed "independent" schools, some of which had been receiving state assistance, per-pupil 11