ECONOMIC ANALYSIS: Taking the ultimate step in K-12 accountability

Everyone in business today knows that customers have choices, and that making and keeping customers happy with your product has always been a big part of the game. These days dissatisfied customers have many more options than simply walking away-they can go online and blast your product in cyberspace, attacking the image and reputation you may have spent a lifetime trying to build.

That’s the daunting prospect American businesses face every day. Yet as difficult as that sounds, here’s one that’s even tougher. It is a world where everyone is a customer, and you, the company, have to make them all happy. It’s a good newsbad news situation. Your market share is 100 percent. But you can never tell an angry, irate, resource-wasting customer to shop someplace else, because you serve them all.

Of course, this is the world of public service. And as many a private sectortransplant has discovered, it is an entirely different place. When your mandate is to serve the public, many of the techniques used in the private sector to segment, prioritize and focus your resources must be modified, or even scrapped altogether.

Yet we want our public agencies and organizations to work better. Perhaps nowhere is that more loudly stated than in the case of our public schools.

Governments collectively spent $10.8 billion on elementary and secondary education in Indiana in 2004-05-with more than 93 percent of that raised from within the state-and not everyone has been happy with the results. Stories of low graduation rates, disappointing test results and low proficiencies in reading and math have raised calls for reform that have proved difficult to ignore for those charged with running the systems.

Of course the issues are highly politicized-most matters of the public purse involving the dollar amounts we spend on education usually are. Yet if we step back from the edge of the sometimes shrill debate on education policy and reform, we see that there are really two basic paths we can take to improve the quality of the graduates of our public schools.

The first is epitomized by the No Child Left Behind Act passed by Congress in 2001. Despite the fact that only 9 cents of every dollar raised nationally to support K-12 schools comes from Washington, Congress jumped into the school accountability game with both feet with NCLB, and its impact on the lives of everyone in education has been profound.

With this act, Congress did what legislatures everywhere apparently like to do-set big, ambitious, lofty goals with target dates sufficiently far into the future to ensure that those voting on them won’t be around when they aren’t achieved. And there is little doubt that the goal of a universal educational standard that all children will meet that is embodied in NCLB will not happen, law or no law.

But it represents a distinct path to reform that keeps our existing, one-size-fits-all, public education system essentially intact, raising a bureaucratically devised accountability bar for them to leap.

There is another approach to accountability. This is a more decentralized approach. It already exists, to a large degree, in higher education. That is to make students more mobile, and to make the schools who educate them compete, in some sense, for their business. It appeals to those with a private-sector mindset, just as it horrifies many of those who have spent their careers in the present system.

What would a market-based system of K-12 education look like? Detractors and proponents have conjured up different visions. Some see the benevolent side of competition as it exists in the private sector, forcing schools to reorganize, innovate and improve in order to survive.

Others see a fractured system of haves and have-nots, delivering children to a lifetime of poverty or affluence from the moment they exit the womb.

It’s going to be one path or the other for educational reform in the coming years. Let’s hope we choose the right one.

Barkey a research economist at Ball State University. His column appears weekly. He can be reached by e-mail at

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