Routing

One of the most frequently voiced objectionsto school choice is that the free market lacks the“accountability” that governs public education.Public schools are constantly monitored by dis-trict administrators, state officials, federal offi-cials, school board members, and throngs ofother people tasked with making sure that theschools follow all the rules and regulations gov-erning them. That level of bureaucratic oversightdoes not exist in the free market, and critics fearchoice-based education will be plagued by cor-ruption, poor-quality schools, and failure.

Recently, news surfaced that appeared to jus-tify critics’ fears. Between the beginning of 2003and the middle of 2004, Florida’s Palm Beach Postbroke a slew of stories identifying corruption inthe state’s three school choice programs. Thenumber of stories alone seemed to confirm thata choice-based system of education is hopelesslyprone to corruption. But when Florida’s choiceproblems are compared with cases of fraud,waste, and abuse in public schools—schools sup-posedly inoculated against corruption by “publicaccountability”—choice problems suddenlydon’t seem too bad.

So which system is more likely to produce

schools that are scandal free, efficient, and effec-tive at educating American children? The answeris school choice, precisely because it lacks thebureaucratic mechanisms of public accountabilityomnipresent in public schools.

In many districts bureaucracy is now so thickthat the purveyors of corruption use it to hidethe fraud they’ve perpetrated and to deflectblame if their misdeeds are discovered. However,for the principals, superintendents, and otherspurportedly in charge of schools, bureaucracyhas made it nearly impossible to make failed sys-tems work. Public accountability has not onlyfailed to defend against corruption, it has alsorendered many districts, especially those most inneed of reform, impervious to change.

In contrast to our moribund public system,school choice isn’t encumbered by compliance-driven rules and regulations, which allows insti-tutions to tailor their products to the needs ofthe children they teach and lets parents select theschools best suited to their child’s needs. Andaccountability is built right in: schools that offerparents what they want at a price they are willingto pay will attract students and thrive, whilethose that don’t will cease to exist.

Corruption in the Public SchoolsThe Market Is the Answer

by Neal McCluskey

_____________________________________________________________________________________________________

Neal McCluskey is an education policy analyst at the Cato Institute.

Executive Summary

No. 542 April 20, 2005

Introduction

Recently, readers of Florida’s Palm BeachPost could have easily been excused for think-ing that state-run school choice programs thatenable students to attend private schools arethe best friends of every scam artist in theSunshine State. Week after week, betweenearly 2003 and mid-2004, the Post ran articleschronicling troubles in the state’s choice ini-tiatives. Much of what was discovered wasunsettling. For instance:

• Florida Department of Education offi-cials moved to a different job, and even-tually fired, a whistleblower who accusedthe department of falsifying informationon “fiscal soundness” letters from privateschools serving voucher students.1

• A private school tied to a suspected ter-rorist received approximately $350,000in voucher funds in 2002.2

• A scholarship-financing organization(SFO), which received hundreds of thou-sands of dollars to be distributed to low-income children through the state’sCorporate Income Tax Credit ScholarshipProgram, was run by a bankrupt individ-ual with a history of legal problems. Heused the money for himself and his com-panies instead of for supplying scholar-ships.3

• Only a few days after her charter schoolhad been closed for mismanagement, awoman opened a private school whereshe taught voucher students.4

• A major SFO was found to have takenout $5.2 million in questionable loansand to have possibly sought kickbacksfrom schools to which it sent voucherstudents.5

• A private school cashed checks for 18voucher students even after those stu-dents had transferred to public schools.6

• A chain of private schools that enrolledvoucher students hired as director ofone of its schools a man who had beenarrested for child abuse a year earlier.7

• Seven employees at a private school were

charged with defrauding voucher pro-grams and the federal free- and reduced-price lunch program by stealing morethan $200,000.8

Dirty dealings have also been discoveredrecently in Milwaukee, Wisconsin, the home ofthe nation’s first major voucher program. InJuly 2004 two schools were kicked out of theprogram for malfeasance. Alex’s Academics ofExcellence, whose chief executive officer was aconvicted rapist, was removed after the schoolwas evicted from its building for failing to payrent. The school had also been accused of mis-using state funds, failing to comply with statefinancial-reporting requirements, and allowingemployees to use drugs on school grounds. Theother ejected school, the Mandella School ofScience and Math, was expelled for owing thestate $330,000 and failing to comply withreporting requirements. Mandella’s ownerallegedly used a portion of the money he owedto buy two luxury cars.9

In light of the litany of alleged abuses inFlorida, and no doubt with trouble elsewhere inmind, the Palm Beach Post has advised extremecaution about school choice. “Yes, look atFlorida, voucher opponents agree,” wrote re-porter S. V. Dáte in November 2003, “three sep-arate, statewide programs riddled with high-profile abuse and not one shred of evidence thatparticipating students are even doing as well asthey were in the schools they left. . . . Folks inother states thinking of introducing vouchersshould see Florida as a cautionary tale.”10

Given the Post’s reporting, as well as scan-dals in choice systems outside Florida, thepotential for abuse in “free-market” educationappears to be significant. But the Post isn’t theonly Florida newspaper capable of conductingan investigation. So too is the Miami Herald,which in 2002 ran “Cheating the Classroom,”a series that examined corruption and mis-management in the Miami-Dade publicschool system. Among the Herald’s discoveries:

• While a member of the school board, aMiami-Dade landlord made more than$1 million in rent payments from a pro-

2

Given the Post’sreporting,

the potential forabuse in

“free-market”education

appears to be sig-nificant. But theMiami Herald in

2002 ran a seriesthat examined

corruption andmismanagement

in the Miami-Dade public

school system.

gram designed to aid at-risk children.That board member was later foundguilty of committing rent fraud in resi-dential units he owned.11

• An influential lobbyist, who as of April2002 had held fundraisers for six ofMiami-Dade’s nine school board mem-bers, made millions, including $4 mil-lion on just one deal, lobbying the boardon behalf of powerful clients.12

• Between 1989 and 1997 the cost of con-struction of a single school balloonedfrom its original price of $27.8 millionto $75 million, and as of April 2002 theschool still suffered from about $1 mil-lion in major repair problems.13

• A recent superintendent’s highest degreewas a master’s from a program thatrequired only eight four-day courses andan exam; his deputy superintendent helda Ph.D. from a “diploma mill.”14

• An internal district audit found thatdistrict purchasing was riddled by abuseand that staff often disregarded com-petitive-bidding requirements.15

• After the deputy superintendent forfacilities management reported thatmillions of dollars were being wasted onshoddy construction, he was transferredto a data entry job and received no rais-es for five years.16

• The district’s maintenance program hasbecome a “jobs for life” initiative, inwhich efforts to lay off workers—and savethe district millions of dollars—have con-sistently been quashed by unions.17

The Herald’s conclusions about the district,in light of its findings, were no less pessimisticthan the Post’s assessment of choice programs.Indeed, they were much worse: While the Postsuggested that unscrupulous people were tak-ing advantage of choice programs with weakaccountability provisions, the Herald foundthat abuses in Miami-Dade were systemic anddemoralizing and emanated from the verypeople entrusted with keeping the schools“clean”—the district’s administrators andboard of education:

Over a decade, the district churned outmillions for controversial new con-struction and costly land buys, take-home cars for top brass, and prizedcontracts for private contractors andeducation firms. All were approved byeither the district’s elected SchoolBoard or by administrators with wide,but often loosely monitored, discre-tion to hand out money or recom-mend how it’s spent.18

The consequences for the district have beendisastrous. “Last year, a school survey designedby a Florida International University professorrevealed a pervasive sense of low morale,” report-ed the Herald, “with principals saying theybelieve the district is riddled with cronyism,incompetence, and political interference.”19

So which schools are more likely to be freeof corruption and fiscal mismanagement, tra-ditional public schools or private schools in afree market? Does the greatest accountabilitycome from the bureaucratic rules and regula-tions of traditional school districts like Miami-Dade or from choice, in which accountability ismeted out by parents who direct funds to theschools that do the best job of educating theirchildren and ignore those that do not?

Despite the muckraking of the Palm BeachPost and opponents of school choice, the evi-dence demonstrates that individuals left totheir own devices will collectively produceaccountability mechanisms that far exceed,both in effectiveness and efficiency, any gov-ernmental systems.

Traditional Accountability

A December 2003 Palm Beach Post editorial,which reviewed abuses in school choice pro-grams unearthed up to that point, declaredthat Florida choice programs constituted a“system designed to fail the test of publicaccountability.”20 If “public accountability” isdefined as the mechanism that ensures thattaxpayer dollars are used to acquire the best,most cost-effective education for children, it is

3

While the Postsuggested thatunscrupulouspeople were tak-ing advantage ofchoice programswith weakaccountabilityprovisions, theHerald found thatabuses in Miami-Dade emanatedfrom the verypeople entrustedwith keeping theschools “clean.”

important to determine what mechanismspublic schools have that choice programs lackand how well they actually work.

A good place to start is to examine publicaccountability as it developed in Americangovernment generally, which enables itsgrowth in American education to be placedin historical context.

According to political scientists RandallClemons and Mark McBeth, in the nation’searly years government was relatively decen-tralized, reflecting the then-predominantbelief that government should be small andunobtrusive. By the mid-1800s, however, thecountry was transitioning from a rural, agrar-ian society to an increasingly urban and indus-trial one. The purview of government grewwith those changes,21 as governments offeredmore and more services to incoming people,often to gain their political allegiance, espe-cially in the nation’s cities.22

Unfortunately, as it grew, governmentbecame increasingly infected with corruption,a trend exemplified by Tammany Hall, thepolitical machine that dominated New YorkCity politics from the mid-19th to the early20th century23 and thrived on practices rang-ing from patronage to bribery.24 By the late1800s, graft and cronyism had become soexpected at all levels of government that in1881 a job seeker, enraged by his inability toland a patronage position to which he thoughthe was entitled for having worked on PresidentJames Garfield’s election campaign, assassinat-ed the new president.25

In reaction to Garfield’s death, the federalgovernment passed the Pendleton Act, whichcreated the merit-based Civil Service and,according to Clemons and McBeth, “represent-ed the first attempt to rationalize the bureauc-racy.” It also marked the arrival of a new era ofprogressive government intended to root outcorruption of all kinds. A few years later, futurepresident Woodrow Wilson provided his ownseminal contribution to scientific, clean gover-nance, The Study of Administration, which arguedfor a separation of administration from politicsin order, according to Clemons and McBeth,“to protect the administrative sphere from par-

tisanship, exploitation, and corruption.”26

By the arrival of the 20th century, efforts tocurb government abuses were joined by regula-tory movements aimed at protecting the pub-lic from unsafe products and working condi-tions. Calamities such as the 1911 TriangleShirtwaist factory fire, in which 146 workersperished because all the doors through whichthey could have escaped their flame-engulfedfactory were locked,27 led to widespread regula-tion of workplace safety.28 Similarly, regula-tions intended to protect consumers’ healthand safety ballooned during that time, largelyin reaction to newspaper stories about horrificmanufacturing conditions and Upton Sin-clair’s The Jungle, which depicted revolting con-ditions in Chicago’s meat-packing plants.29

From those movements—Civil Service reformand public welfare regulation—the modernbureaucratic structure of most American gov-ernment arose.

Today we rely on the bureaucratic structureserected at the end of the 19th century, whichwere greatly enlarged throughout the 20th cen-tury, to keep government “accountable” to thepublic. “Max Weber said that the great virtue ofbureaucracy . . . was that it was an institutionalmethod for applying general rules to specificcases, thereby making the actions of govern-ment fair and predictable,” notes political sci-entist James Q. Wilson, explaining the rationalethat animated bureaucracy’s growth.30

Public Education and the Triumph of BureaucracyIn general, the development of account-

ability in American education—both to pre-vent malfeasance and to enforce performancestandards—coincided with broader govern-mental trends. Education over the decadesgrew ever more regulated and bureaucratic.Unfortunately, from about 1830 to 1990,that produced one dominant system: increas-ingly monolithic public schools.

As mentioned, neither education nor mostother American governance started out ladenwith bureaucracy. Until about the middle of

4

The developmentof accountability

in American education

coincided withbroader govern-

mental trends.Unfortunately,

from about 1830to 1990, that

produced onedominant system:

increasinglymonolithic public

schools.

the 19th century, education was deliveredunder the same laissez faire structure thatcharacterized other American governance. Aseducation professors Bruce Cooper, LanceFusarelli, and E. Vance Randall note, from thecolonial period until about 1830, Americaneducation was “highly decentralized, unstruc-tured, and very diverse. There was no systemand governance was personal, local, and dif-fuse.”31

By 1830, however, American schools werebeing affected by the same social and demo-graphic transformations that were starting toreshape many other aspects of American life:immigration was on the rise, and the industri-al revolution was slowly making America into amore urban nation. Of course, those trendsescalated gradually, as did the change tobureaucratic, centralized education, a trenddriven by Horace Mann’s common schoolmovement. Mann expected common schools,described by Cooper, Fusarelli, and Vance as “astate-sponsored, state-controlled system ofschools attended by all,” to improve publiceducation by standardizing it and making itsystematic. Essential to the working of such asystem was bureaucracy, which, according toCooper, Fusarelli, and Vance, Mann saw as “theonly mechanism that could efficiently raiseeducation and schools above the fray of pettypolitics and properly socialize the young.”32

Bureaucratizing the delivery and qualitycontrol of education was intended to estab-lish efficient processes for delivering educa-tion to large, diverse student populations. Itwas supposed to enable “experts,” ratherthan laymen, to control what, when, where,and how students were taught, in accordancewith what their expertise dictated was best.“The progressive education movement, . . .”writes historian Diane Ravitch in Left Back: ACentury of Battles over School Reform, “wantedto curb the influence of laymen, especially inpoor and immigrant neighborhoods, in deci-sion making about the schools. Toward theseends, progressive reformers created central-ized school bureaucracies and civil servicesystems in urban districts that minimized layparticipation in education policy.”33

As the progressive movement establishedgreater and greater control over education,the system became increasingly centralized, aseemingly inevitable trend, given the top-down nature of progressivism. As Ravitchnotes, by the 1920s centralized, hierarchicallycontrolled organizations came to be thoughtof as essential for “modern” schooling.34

Centralization came in two forms: placingpower over schools and districts in the handsof a few experts and absorbing small schoolsand districts into increasingly larger units. Bythe late 1950s, the latter movement was beingpushed most visibly by Harvard Universitypresident James B. Conant, who sought toreplace small schools with gigantic institu-tions able to produce financial economies ofscale and also, according to Ravitch, “put pro-fessionals in control and minimized lay inter-ference.”35 The result: between the 1937–38school year, the earliest for which the NationalCenter for Education Statistics has data, andthe most recent year, 2000–01, the number ofpublic school districts in the United Statesdecreased from 119,001 to 14,859. Similarly,the total number of public schools droppedfrom 245,941 in 1931–32 to 93,273 in2000–01.36

Throughout that period, districts andstates established uniform rules for everythingfrom teacher certification and hiring to curric-ula37 to bias and sensitivity requirements.38

They also vastly increased the layers of admin-istration and bureaucratic oversight in ongo-ing efforts to root out corruption and makethe system work.39

Bureaucracy Fails

Employing compliance-based bureaucrat-ic mechanisms to contain corruption seemslogical: lay out rules that prescribe what canand cannot be done and seek out and punishthose who violate them. Compliance-basedaccountability’s first-blush logic notwith-standing, significant evidence demonstratesthat large bureaucratic systems not onlyoften fail to prevent corruption, they actually

5

Bureaucratizingthe delivery andquality control ofeducation wassupposed toenable “experts,”rather than laymen, to control what,when, where, andhow studentswere taught.

foster it. In addition, public accountabilityhas inflicted two additional problems onAmerican education: paralyzing inefficiencyand widespread academic failure.

So while opponents of school choice suchas the National Education Association arguethat “vouchers undermine accountability forpublic funds,”40 or that vouchers fail to pro-tect “individuals who use the tax-funded pro-gram,”41 as the National School BoardsAssociation asserts, they miss the defects crip-pling the bureaucratic system they favor. Wenow look at each defect in detail.

CorruptionOn April 23, 2003, the Palm Beach Post ran

two of its first reports on the trials and tribu-lations of school choice in Florida, a series thatwould total more than 130 news stories, edi-torials, and analyses by August 2004.42 Duringroughly that same period, education newsfrom around the country revealed that tradi-tional public school districts, even old districtsthat in some cases had had more than a cen-tury to perfect bureaucratic accountability,saw accountability failures often far moreegregious than those perpetrated throughFlorida’s choice programs. Consider some par-allel incidents:

• Revelations that a Miami-Dade privateschool cashed checks for 18 voucher stu-dents who’d transferred to public schoolsand received payments for 44 new vouch-er students even after the state discoveredthe problem, were said by the Post to add“fuel to the debate over voucher ‘account-ability.’”43 Similarly volatile was theScottsdale, Arizona, situation in which anelementary school principal kept depart-ed students on school rolls long afterthey’d left, in order to collect extra statefunding.44

• In Florida, money from corporations par-ticipating in the state’s Corporate IncomeTax Credit Scholarship Program went to aman who used it for his own enrichment,rather than student vouchers. He waseventually arrested and charged with tak-

ing more than $268,000. To the Post, itwas one of “all kinds of abuse” perpetrat-ed by voucher schools.45 But it was noth-ing compared with the discoveries thatD.C. public schools had hemorrhagedabout $1 million in wasteful spending in2003;46 New York City had been losingbetween $8 million and $10 million a yearon bad food contracts for many years;47

Fort Worth, Texas, schools had beendefrauded out of about $10 million by aconcrete vendor;48 the school superinten-dent for the entire state of Georgia hadallegedly stolen about half a million dol-lars from Peach State taxpayers, about$9,000 of which she used to get a face-lift;and school officials in wealthy Roslyn,New York, had been embezzling funds foryears, an amount a recent report tallied atmore than $11 million spent on suchextravagances as new luxury cars and tripson the Concorde.49

• The Post published allegations by a statewhistleblower that an SFO had, amongother irregularities, requested “kick-backs”50 from voucher-taking schools.51

During the same time, kickback schemesbetween vendors or favor seekers and dis-trict-level officials involving millions ofdollars were discovered in Fort Worth,Texas,52 and Michigan.53

• In an editorial headlined “Newest VoucherScandal: No Check on Child Abuse,” thePost lambasted school choice because aman who had been accused of child abuse,charges against whom had been dropped,was hired as the director of a private schoolthat taught voucher students. The editori-al intoned: “Voucher schools have perpe-trated all kinds of abuse. But child abuseshould be going too far, even for die-hardvoucher advocates.”54 But failures to safe-guard against abusers in public schools arerampant: in Texas, the Beaumont Enterpriseran a story headlined “Background Checkson Prospective Employees Do HaveLimits,” in which it explained that back-ground checks required by law often fail toscreen out dangerous job applicants, such

6

Traditional public school

districts sawaccountability

failures often farmore egregious

than those perpetrated

through Florida’schoice programs.

as a band director accused of assaulting atleast two students;55 the New York Timesreported that the New York City Depart-ment of Education failed to conductrequired background checks on drivers ofdisabled children, and 25 drivers turnedout to have criminal records;56 the DetroitNews explained that the state failed toproperly check school employees andfound that “as late as the 2001–02 schoolyear, 41 people, including 40 teachers” hadunreported criminal records;57 and theOrlando Sentinel reported the arrest of a spe-cial education teacher accused of beatingautistic children in South SeminoleMiddle School in Sanford, Florida, eventhough the district had investigated her forabuse four years earlier.58

Clearly, Florida’s school choice programshad no monopoly on corruption during theperiod of the Post’s investigation; almost everyallegation was mirrored in public districtsacross the country. Those, however, are justsnapshots frozen in time, offering little insightinto how corruption has been dealt with overthe long run. Examining how corruption andanti-corruption initiatives have changed overtime is vital to determining whether examplesof malfeasance such as those noted above areaberrations or permanent bureaucratic afflic-tions.

Surprisingly, almost no comprehensive stud-ies of corruption in American education exist.That changed a little in 2004, however, whencriminal justice professor Lydia Segal releasedBattling Corruption in America’s Public Schools,which examines corruption and bureaucracy inthe country’s largest public school districts,especially those of New York City, Los Angeles,and Chicago. Segal’s motivation for writing thebook is telling:

After graduating from Harvard LawSchool, I interned in the ManhattanDistrict Attorney’s Office for EdwardStancik, then head of the Rackets Bureauthere. A short time later, as tales of publicschool jobs in New York City being sold

for sex and cash filled the airwaves,Mayor David Dinkins appointed Stancik. . . to investigate school fraud and makerecommendations for systemic reform.When Stancik asked me to join his team,I jumped at the chance. . . .

On one side of this underworld werepeople like some local board memberswho transformed their districts intopatronage mills, handing out jobs andcontracts to friends, lovers, and cam-paign workers. These board members,who referred to themselves as godfathersand godmothers, talked primarily aboutmaking deals and getting pieces, or patron-age hires. Words such as children and edu-cation were not part of their vocabularyexcept insofar as they could be exploitedas a source of patronage, power, ormoney.

On the other side were principalsand administrators who furtively col-luded to break the cumbersome schoolregulations and union contracts thatprevented them from doing their jobseffectively.59

Despite all the rules against misconductaccumulated since the progressive, anti-Tammany days, during her investigations ofNew York City’s schools Segal found that thesystem was still plagued with corruption. Herinvestigations of other large urban districtswere just as disheartening:

In New York City, decades of law en-forcement investigations, city and stateaudits, political commission reports,grand jury reports, citizen group stud-ies, and media exposés paint a portraitof a school system that has been afflict-ed by wrongs: theft, extortion, politicalpatronage, nepotism, bribery, fraud,and even alleged murders and suicides.Investigations of other large urbanschool systems, including Chicago,Detroit, Los Angeles, Washington, D.C.,Jersey City, and Newark, have revealedsimilar abuses.60

7

Despite all therules against misconduct accumulatedsince the progressive, anti-Tammany days,during her investigations ofNew York City’sschools Segalfound that thesystem was stillplagued with corruption.

That should not be surprising: As thepublic school scandals constantly eruptingaround the country make clear, corruption inpublic schools, in spite of public accountabil-ity, is commonplace. What might be surpris-ing, though, is Segal’s next finding: bureau-cratic anti-corruption rules actually enablemalfeasance, while undermining the abilityof those truly dedicated to education to gettheir jobs done. She continues:

Corruption is in a sense a symptom ofsomething else gone awry. The underly-ing illness, moreover, causes not justcorruption in the modern sense of ille-gality but also corruption in the broad-er, classical sense of the term corruptio,meaning perversion of purpose. . . . Theroot of the problem lies in the ever-tighter traditional corruption con-trols—the layers of bureaucratic over-sight; the detailed standard operatingprocedures, rules, and regulations; andthe over-specification of money—thatschools imposed on their operationsover decades. These control mecha-nisms were supposed to ensure againstfraud and waste. But as urban schoolsgrew larger, they have [sic] actually erod-ed oversight, discouraged managersfrom focusing on performance, andmade it so difficult to do business withdistricts that employees and contractorshave sometimes had to seek “creative”or illicit ways to get their jobs done.61

Stories from St. Louis and New York City,as well as a comparison of corruption inbureaucratic and relatively nonbureaucraticdistricts, all bear out the accuracy of Segal’sconclusions.

In June 2003 St. Louis brought a privatefirm in to manage the city’s corrupt, failingschool system because, according to the St.Louis Post-Dispatch, “they would be outsiders,capable of making the tough decisions andheading home.” But actually effecting changewould likely be much harder than advertised,because, continued the Post-Dispatch, “running

a school district is not as simple as running abusiness. The reality is that patronage and pol-itics have been institutionalized in St. Louisand many other urban school districts.”62

Similarly, the New York Times reportedthat New York City schools likely lost mil-lions of dollars in bad, possibly corrupt fooddeals because the complexity of the systemenables miscreants to deflect blame and hide:“Education officials either denied knowingabout it or said they were not responsible,pointing the finger at other divisions in thedepartment.”63

Finally, in Making Schools Work, Universityof California, Los Angeles, management pro-fessor William Ouchi examines school dis-tricts that have heavy bureaucratic structures,including those of New York and Chicago,and districts that give their schools significantautonomy, including those of Edmonton,Alberta, and Seattle, Washington. What Ouchidiscovers is telling. In the districts in whichschools have the most autonomy, the inci-dence of waste, fraud, or corruption, such asteachers and administrators stealing districtfunds, is the lowest, and the districts with “themost centralization and the largest centralstaffs . . . have the most, not the fewest, prob-lems with incompetence and dishonesty.”64

Inefficiency Almost daily the news reminds us not only

that bureaucratic government is failing to keepour public schools “honest and accountable”but also that the schools are being renderedextremely inefficient by it. To an extent, that’sby design. As James Q. Wilson explains in hisbook Bureaucracy, it’s just part of the price wepay to be protected from graft and incompe-tence. “A government that is slow, . . . ” hewrites, “but is honest and accountable in itsactions and properly responsive to worthy con-stituencies may be a very efficient government,if we measure efficiency in the large by takinginto account all of the valued outputs.”65

Unfortunately, the inefficiency our schools areplagued with is extremely debilitating, and thekind of “valued outputs” Wilson says weexchange for efficiency—in the case of educa-

8

Corruption inpublic schools, in

spite of publicaccountability, is

commonplace.

tion, corruption-free, effective schools—nevermaterialize.

Again, in roughly the same period as thePalm Beach Post was attacking Florida’s privateschool choice programs, there were abundantsigns that traditional public school systemswere suffering mightily from bureaucraticincompetence and inefficiency, which hadserious implications for schools:

• A report released in September 2003found that 42 percent of campuses inthe Los Angeles Unified School Districtfailed health and safety inspections.66

• In November 2003 the New York DailyNews reported, “Highly paid educrats atthe Education Department shocked thecity’s 80,000 teachers this week by hand-ing out barely literate curriculum guidesriddled with grammatical gaffes, spellingerrors and misused words.” The guides,among other things, urged teachers to“crate a balance bean with masking tape”and identify “student strengthens andweaknesses.” One guide explained thatGeorge Orwell’s Animal Farm is a storyabout the importance of rules.“Educators were quick to point out thatthe error-ridden lesson plans camestraight from the top,” explained theDaily News, “and at a time when fewerthan half of city students can read atgrade level.”67

• In Detroit thousands of children aregoing without textbooks as a result of“computer glitches” in the inventory sys-tem, according to the Detroit Free Press. Asidebar to the Free Press’s article chroniclestextbook supply breakdowns since 1985,with district excuses ranging from “order-ing errors” to “orders must go through 39steps, requiring mounds of paperwork.”68

• An independent auditor in Washington,D.C., found in an examination of ran-dom samples of 59 student records ateach of 16 schools that hundreds of fileswere in disarray and many appeared tohave been tampered with, according tothe Washington Post. Whether or not tam-

pering occurred was impossible toprove, however, “because of the disorga-nized state of the records.” Said schoolboard president Peggy Cooper Cafritz:“What’s crystal clear is that the highschools haven’t been doing their jobs interms of student records at all. . . . It’srampant throughout the system.”69

• Again in D.C., the Washington Times report-ed that when DCPS superintendent PaulL. Vance learned that the school districthad a $65 million deficit and 640 excessemployees in October 2003, he simply“blamed the ‘system,’ saying, the auditmerely revealed ‘part of the system’sfinancial conditions that have to becleared up.’”70

• A girl received progress reports for numer-ous classes at Sherwood High School inMontgomery County, Maryland, last year,according to the Washington Times. Shereceived two A’s, an “NC” for a noncreditclass, and one incomplete. The only prob-lem: the girl had never attended theschool.71

• In early November 2004, 300 pounds ofdiscarded student records, which con-tained private information about formerNew York City public school students’medical histories as well as their fullnames and Social Security numbers, werediscovered dumped on a Bronx Street.According to the New York Daily News, anEducation Department statement read,“This violates clear department policyand should not have happened.”72

Some of the worst bureaucratic failures—from ordering millions of dollars in unneces-sary food to allowing individuals with criminalpasts to transport special education children toschool to carelessly throwing out thousands ofrecords with names and Social Security num-bers—have occurred in New York City, despitethe school system’s voluminous guidelines andregulations. Indeed, Common Good, a biparti-san organization seeking to roll back the intru-sion of law in American society, recently com-pleted an exhaustive assessment of every rule

9

Some of the worst bureaucratic failures haveoccurred in NewYork City, despitethe school system’s voluminousguidelines andregulations.

and regulation governing a typical New YorkCity high school and found that the schoolslabor under “more than 60 separate sources oflaws and regulations, with thousands andthousands of discrete obligations.” So strict arethe rules and processes that Common Goodestimates an administrator most follow morethan 66 steps, in a process that typically takes105 days, to suspend a disruptive student andmust adhere to an 83-step process that cantake longer than a year to fire an inept teacher.Sources of regulation identified by CommonGood include

• the New York State education law, whichis 846 pages long;

• 720 pages of regulations issued by theNew York State commissioner of educa-tion;

• 15,062 decisions—contained in 43 vol-umes—made by the New York State com-missioner of education in response toappeals of decisions made by educationprofessionals;

• the New York City teachers’ contract,which is 204 pages long, with an addi-tional 105-page memorandum of under-standing;

• the No Child Left Behind Act, which is690 pages long; and

• more than 200 pages of regulations (notincluding case law) controlling the disci-pline of students.73

Given the morass of rules and regulations towhich New York City high schools mustadhere, it’s little wonder that the city’s schoolsseem incapable of efficient operation.

Learning Regulations governing almost everything a

school can do have failed to stop fraud, waste,and abuse but have rendered school districtscripplingly inefficient. As a result, “ultimately,it’s the achievement potential of our studentsthat suffers,” explains Paul Houston, executivedirector of the American Association of SchoolAdministrators.74

Examining trends in overall student perfor-

mance on National Assessment of EducationalProgress exams and the Scholastic AptitudeTest shows that academic stagnation hasaccompanied bureaucratization of educationfor at least 30 years. Since around 1970, scoreson the SAT have dropped, and those on NAEPmath, reading, and science have shown littleimprovement. Especially poor have been theresults for high school students. Over the lastroughly 30 years, scores for 17-year-olds havebarely improved at all in math and reading,and they have dropped in science.75 That’sdespite the fact that, according to the U.S.Department of Education, inflation-adjustedper pupil expenditures nearly tripled between1965 and 2003,76 and the pupil-to-teacher ratioin American public schools, according to theNational Center for Education Statistics,dropped from 22.3 in 1970 to 15.9 in 2001.77

Many factors are likely at play in the sorryperformance of American schools since 1970,and bureaucracy is surely one of them. Univer-sity of California, Berkeley, professor Robert A.Kagan provides insight into why that is proba-ble: “In the 1970s enforcement officials and reg-ulated enterprises both reported an increase instrict rule-application, formal citation, andpenalties,” and a marked increase in “regulato-ry unreasonableness.” He continues, “There areobvious parallels between the evolution of[such] protective regulation and the growth oflegal controls over public schools.”78

Education researchers John Chubb andTerry Moe clearly identified the connectionbetween bureaucracy and performance. Asthey explained in their book Politics, Marketsand America’s Schools, the bureaucratic struc-tures under which schools labor can be corre-lated with academic performance, and schoolswith the most onerous bureaucracy tend to dothe worst.

Like many observers of contemporaryAmerican education, we believe thatbureaucratization of educational gover-nance and administration has simplygone too far. Many public school sys-tems seem to have become so bureau-cratized that their schools cannot possi-

10

The bureaucraticstructures under

which schoolslabor can be

correlated withacademic

performance, andschools with the

most onerousbureaucracy tend

to do the worst.

bly develop clear objectives and highacademic expectations or attract thekinds of principals or teachers that arerequired for effective performance. . . .The data that we examined in this chap-ter are consistent with our expectations.Autonomy has the strongest influenceon the overall quality of school organi-zation of any factor that we examined.Bureaucracy is unambiguously bad forschool organization.79

William Ouchi takes a practical look atthis in Making Schools Work, a book based onvisits to, and analyses of, hundreds of schoolsin a variety of different systems ranging fromEdmonton, Alberta, to the three largestCatholic school systems in the United Statesto the New York City and Los Angeles schoolsystems to six independent schools. WhatOuchi concludes from his analysis corrobo-rates the assessment of Chubb and Moe.

An entrepreneur is the opposite of abureaucrat. Bureaucrats, especially goodones, know the rules backwards and for-wards and always follow them. In a rou-tine, stable situation, that’s a good thing.When confronted with the nonroutine,though, bureaucrats cannot act until ahigher-up gives them a new rule thatthey can follow. In schools, where eachday brings new and previously unknownsituations, bureaucracy is deadly.80

Perhaps the most convincing testimonialsabout the crippling effect of bureaucracy onschools come from people who actually work inthem—superintendents and principals. Accord-ing to Rolling Up Their Sleeves: Superintendents andPrincipals Talk about What’s Needed to Fix PublicSchools, a report from the research organizationPublic Agenda, 82 percent of superintendentsand 49 percent of principals identified “politicsand bureaucracy” as the number-one reason col-leagues left their field. As one focus group mem-ber told the researchers, “The ‘system,’ whetherat the local, district, state or federal level, has lit-tle sense of what school life is, and each level cre-

ates hurdles to meeting the needs of childrenand communities.”81

The Solution: School Choice

So the sort of public accountability thePalm Beach Post accused school choice inFlorida of lacking actually contributes to,rather than prevents, fraud, waste, and abuseand often keeps the worst districts in perma-nently bad shape. The solution to the account-ability problem, ironically, is the very thingdefenders of public accountability mostdespise: school choice. As Chubb and Moe dis-covered, “The most important prerequisite forthe emergence of effective school characteris-tics is school autonomy, especially frombureaucratic influence.” That was a findingthat led them to recommend “a wholly differ-ent [education] system—one built aroundschool autonomy and student choice.”82

In their research, Chubb and Moe analyzedthe changes in scores on five tests adminis-tered for the High School and Beyond survey,which covered both public and privateschools. They looked most closely at howthose scores correlated with school organiza-tion. “Organization” was assessed using fourmajor dimensions: goals, leadership, person-nel, and practice. Chubb and Moe found thatno single dimension was dominant83 but thataltogether “the freer schools are from externalcontrol—the more autonomous, the less sub-ject to bureaucratic constraint—the more like-ly they are to have efficient organizations.”The hallmarks of such organizations are“strong leadership, clear and ambitious goals,strong academic programs, teacher profes-sionalism, shared influence, and staff harmo-ny, among other things.”84

Not surprisingly, the private schools in theHSB data tended to have both much betterorganization and significantly better perfor-mance. “Effective school characteristics arepromoted much more successfully by marketcontrol than by direct democratic control,”conclude Chubb and Moe. “The kinds of qual-ities that contemporary school reformers

11

The solution to the account-ability problem, ironically, is thevery thingdefenders of public accountabilitymost despise:school choice.

would like public schools to develop, privateschools have developed without externalreform at all.”85

Chubb and Moe find that the only publicschools with autonomy comparable to that ofprivate schools are those outside urban areas,which not coincidentally tend to serve well-to-do families. Conversely, the schools most inneed of immediate, effective reform—failinginner-city schools—have the least autonomy.86

The implications of that are grave, because weheap the most bureaucracy on the latterschools, usually in efforts to help them. As theauthors explain:

When schools are plagued by prob-lems—poor academic performance,drugs, violence, absenteeism, high drop-out rates—public officials come underintense pressure to take corrective actionin the form of new policies. Much thesame happens when the schools’ prob-lems are seen to be anchored in morefundamental problems that beset theirstudent populations—economic hard-ship, broken families, poor nutrition,physical handicaps, language difficul-ties. Here there is pressure for govern-mental programs that address the edu-cational symptoms of these problems,usually by requiring schools to providecertain kinds of services.87

One need look no further than the federalNo Child Left Behind Act (NCLB) to see thatwhen schools don’t meet standards, the “cure”involves more bureaucracy. NCLB mandatesthat all states set learning standards for read-ing, math, and science and requires that stu-dents take tests assessing their knowledgeagainst those standards. That necessitates thatbureaucracy be augmented: standards mustbe designed and disseminated, and tests mustbe written, administered, and graded. NCLBalso imposes new teacher qualification stan-dards, requires that states seek out andapprove organizations to provide tutoring tostruggling children, and sets detailed rules formany other school and district functions.

Unfortunately, the worst damage is inflict-ed on the schools and districts whose studentsfail the NCLB-mandated tests and are desig-nated as “needing improvement,” or worse.Depending on how long a school has failed toachieve what NCLB calls “Adequate YearlyProgress”—essentially, bringing enough kidsin numerous populations up to “proficiency”on state tests each year—its district could berequired to offer students transfer options toother schools within the district, offer tutor-ing, and draw up plans for improving or com-pletely restructuring the school, all adding tothe weight of bureaucratic compliance.88

Chubb and Moe’s prescription for fixingAmerican education is fundamentally differ-ent from reforms like NCLB that graft newlayers of bureaucratic rules onto the alreadysmothered system. Rather than more govern-ment control of schools, Chubb and Moe callfor much less, with the choices of parents,rather than rules and regulations, providingthe primary control.89 Critically, they addthat if choice is to work it must not be addedto traditional reforms like increased testingor class-size reduction; it “must be adoptedwithout these reforms, since the latter arepredicated on democratic control and areimplemented using bureaucratic means.”90

Choice must be a single, stand-alonereform because it completely revolutionizeshow education is delivered, making a systemcontrolled by government into one controlledby consumers. But keep it as one among manyreforms, the rest of which maintain the com-pliance-driven government system, and thebureaucracy will eventually strip choiceschools of their autonomy. Using as an exam-ple the East Harlem, New York, school district,which in the 1970s and 1980s granted itsschools significant autonomy and saw greatimprovements in student achievement as aresult, Chubb and Moe illustrate the need tomake liberating schools a stand-alone reform.“A . . . scandal at the district level . . . promptedcity officials to initiate a shakeup of districtpersonnel,” they write. “The new leadershipappears to be intent on reasserting certain dis-trict controls and moving toward more tradi-

12

Choice must be a single,

stand-alonereform because it

completely revolutionizes

how education is delivered,

making a system controlled by

government intoone controlled by

consumers.

tional forms of governance and administra-tion.” The schools’ biggest problem, then, isthat “what authority they have been privilegedto exercise to this point has been delegated tothem by their superiors—who have the right totake it back.”91

Quality Control in anEducation Market

Chubb and Moe clearly believe that choiceholds the solution to the academic problemsthat plague America’s public schools. But howwill it furnish the quality control the UnitedStates currently seeks to obtain through bureau-cratic mechanisms? In Public Policy and the Qualityof Life: Market Incentives versus GovernmentPlanning, Florida State University economics pro-fessor Randall Holcombe answers that questionand shows how market-based accountability canand does exceed the level of accountability pro-vided in areas traditionally thought controllableonly by government.92

Free-market accountability, though moredifficult to identify than written rules andregulations, works in a fairly simple way.Education providers are accountable to par-ents because only those firms that providewhat consumers want at the prices they arewilling to pay can stay in business. Firms thatfail to produce the quality consumers want atthe price they are willing to pay face the ulti-mate sanction, extinction.

Among its many benefits, that dynamiccan foster the creation of private regulatorybodies. Such regulatory organizations mightcharge producers to have their products “cer-tified” as meeting the regulatory firm’s stan-dards. The value of that certification wouldrise as consumers came more and more torespect it. All three participants—regulators,producers, and consumers—would win fromsuch a free-market arrangement, and the inef-fective mechanisms of bureaucratic account-ability could be dispensed with. Holcombelooks at two such private regulatory organiza-tions: Best Western motels and UnderwritersLaboratories.

Most people probably think motels bear-ing the Best Western name are part of a chain.Not so, Holcombe explains: Best Westerndoesn’t actually own any motels; instead,motels that meet the company’s standards paya fee to display the Best Western logo, signify-ing their quality. Essentially, Best Western is aprivate regulatory body.93

Of course, Holcombe concedes, “staying ata nice motel is a matter of comfort but proba-bly not a matter of life and death.”94 Butensuring the safety of products and servicesthat could have life-threatening defects, suchas automobiles or drugs, is considered one ofthe most important roles of regulation, onethat many people feel can be entrusted only togovernment. However, the private sector alsohas a regulatory organization for those kindsof products: Underwriters Laboratories, issuerof the familiar circled “UL” stickers found oncountless electronic devices, including manythat, if functioning improperly, could threat-en life and limb. “Underwriters Laboratoriesmakes money because the firms that bringproducts to it want their products to be regu-lated. The expense of the regulatory process ispaid for because consumers are willing to paymore for the UL seal of approval.”95

So there are already private regulatorystructures helping consumers identify servicesand products that meet high standards. Suchexamples are, in fact, ubiquitous if one acceptsfranchises and brand names as private-sectortools for maintaining quality standards. If onelikes Coca-Cola, for instance, one can expect togo almost anywhere in the United States andbe able to buy a Coca-Cola that is as good as itis anywhere else. Ditto fast food restaurants,movie theaters, bicycles, and on and on. Andwe are now able to add schools to the list.

Thanks to charter schools and education-al choice programs, schools too are comingto be regulated through market mechanisms.Of course, for the most part schools are stillregulated by government because more than88 percent96 of students attend traditionalpublic schools, the clientele of which is cap-tive, so the schools need not prove their qual-ity to prospective consumers. But charter and

13

Thanks to charter schoolsand educationalchoice programs,schools are coming to be regulatedthrough marketmechanisms.

other choice schools are different, becausethey must be chosen by parents to survive.

Perhaps the best known “brand name” inschooling is KIPP, the Knowledge Is PowerProgram, which has become one of the mosthighly respected names in education. KIPPschools are the brainchild of David Levin andMichael Feinberg, who in 1994 created amodel for middle schools featuring longerdays, school on Saturdays, uniforms, studentcontracts, an omnipresent focus on collegepreparation, and discipline97 that is nowstandard in 38 schools across the nation serv-ing more than 6,000 students.98 As reporterMeredith May wrote in the San FranciscoChronicle in 2003, the success of KIPP schoolsis clear, and their reputation is helping themto replicate quickly, to the benefit of evergreater numbers of poor and struggling stu-dents. “While most KIPP middle-schoolersenroll at a third-grade reading level, studiesshow they reach their correct grade level in ayear, and read above their grade level aftertwo years,” May reported. “Much like a chainstore, KIPP is replicating by creating its ownrecognizable brand of education.”99

While KIPP might be the best known of theemerging names in education, it is hardlyalone in offering nongovernmental qualitycontrol for schools. Parents interested in hav-ing their children educated using the methodscreated by Maria Montessori, for instance, canseek out schools that advertise themselves asMontessori schools and, if the schools aremembers of the American Montessori Society,be assured that the schools adhere to theMontessori philosophy of student-directed,whole child education.100 The same goes forWaldorf schools, which in the United Statesare authorized to bear that name only if theyare members of the Association of WaldorfSchools of North America.101

Brand naming isn’t permanent; it can betaken away if a school no longer conforms tobrand standards. Famed educator MarvaCollins, who created a curriculum creditedwith turning around struggling WestsidePreparatory School in Chicago, entered intocontracts to allow schools employing her cur-

riculum to use her name. But when many ofthose schools deviated from the curriculumand quality her name represents, Collinsforced them to remove it, most recently fromthe former Marva Collins Preparatory Schoolin Milwaukee.102

Despite the benefits of private regulatorymechanisms, choice-based accountability isultimately rooted in the choice of individualparents who choose to pay for the schools thatproduce the outcomes they desire for theirchildren and leave behind those that do not.That is a phenomenon foreign to traditionalpublic schools, because children are assignedto those schools on the basis of where they live,and “choice” can usually be exercised only byrelocating to an entirely different district.

Perhaps the best opportunity to observesupply-and-demand accountability at work isin the nation’s 3,000 plus charter schools,103

which, though far from the market—and hencemarket-accountability—ideal, are the mostcommon choice schools across the country.Charters have demonstrated that schools thatdon’t do an adequate job of meeting parents’needs can, and do, go out of business.

For years, the Center for Education Reformhas tracked the births and deaths of charterschools across the country. According toCER’s figures, between the 1992–93 schoolyear and January 2004, more than 311 charterschools closed their doors.104 Many of thoseclosures, it should be noted, did not occurbecause of supply and demand—charters haveoften been closed because of inability to findadequate facilities, failure to fulfill provisionsof their charters, or several other “nonmarket”causes—but many did, in fact, close becauseparents were not interested in their product.

Enrollment shortfalls are identified as thereason for nearly 50 of the school closuresCER lists in Charter Schools Today.105 Thatnumber might not seem very high, but itshows that choice-based accountability cankick in. And charters have a significantly larg-er closure rate than traditional publicschools, which typically operate no matterhow poorly they perform unless a districtexperiences massive out-migration.

14

Choice-basedaccountability is

ultimately rootedin the choice of

individual parents who

choose to pay forthe schools that

produce the outcomes theydesire for their

children.

Even in Choice Programs, Government Is the Problem

Despite the great potential to provideaccountable, efficient, effective schoolingusing the free market, government continuesto dominate education, including currentlyexisting choice systems. In fact, in almost everycase the fraud, waste, and abuse that have beenperpetrated in school choice programs likeFlorida’s have been due to government, notmarket, failure. So, when critics of choice arguethat corruption in Florida’s choice programs isa symptom of a “‘free market’ approach toaccountability,” as does the National SchoolBoard Association’s Tom Hutton,106 or thatproponents of choice have asserted that “thefree market system will take care of itself” tocure Florida’s scandals, as Palm Beach Postreporter Kimberly Miller has written,107 theyare mistaken. In the short term, of course,malfeasance can occur anywhere—people con-stantly do bad things, and no accountabilitymechanism can provide instantaneous protec-tion from them. But over time choice providesthe best way to deal with corruption.

Consider the whistleblower who wasmoved to a different post and eventually firedfrom the Florida Department of Education.He was punished, many people believe, forreporting that a department employee wasaltering letters required of private schools thatwished to receive voucher students. Accordingto the Post, the letters had to contain eitherproof of a school’s insurance policy or a letterof “fiscal soundness” from an accountant.108

Clearly, that was not a failure of the freemarket. In a truly free-market system, lettersof fiscal soundness would be unnecessary,because schools that were not fiscally soundwould either go out of business or adjusttheir business practices until they were finan-cially sound. The market would either weedout such institutions or force them toimprove.

The requirement of proof of fiscal sound-ness in order to enroll in a government pro-gram is bureaucratic accountability, based on

formal rules and regulations. Because taxpayermoney is being used, legislators feel that gov-ernment must take measures to guard againstmoney appearing to go to unsound schools.But, as demonstrated by fiscal failure uncov-ered in districts such as Baltimore, Maryland,which in early 2004 registered a $58 milliondeficit,109 and Detroit, Michigan, which hasaccumulated a $198 million deficit,110 even intraditional schools such accountability oftenfails miserably.

Next, consider the two cases of scholarship-financing organizations accused of misusingfunds. In one, bankrupt correspondenceschool and scholarship-financing organiza-tion operator Daniel Isenhour was accused oftaking $268,000 in scholarship funds andkeeping it for himself.111 In the other, thelargest SFO, FloridaChild, was found to haveimproperly charged families application feesand accepted millions in transfer fees fromother SFOs.112

Again, those scandals were made possiblenot by free markets but by the fact that theFlorida corporate scholarship program is agovernment program. Florida, arguably, is con-strained from giving money directly to parentsby the state’s constitution and therefore had toerect a system that uses “middlemen”—SFOs—that take corporate money and transform itinto scholarships. In a truly free market, par-ents would deal directly with schools, and mid-dlemen would be unnecessary.

That is not to say that in a market no parentsor school operators would ever be unscrupu-lous. But, at the very least, the roundabout fund-ing scheme of Florida’s corporate scholarshipprogram adds a layer to the exchange of moneyfor education that would not exist in the freemarket, increasing the potential for misdeeds.Isenhour never would have been involved hadthat not been the case.

But imagine that Isenhour had operated aschool rather than an SFO. If he hadn’t beenproviding educational services that parentsvalued, he would have lost his students toschools that did. Indeed, his for-profit corre-spondence school went bankrupt in March2003.113

15

In almost everycase the fraud,waste, and abusethat have beenperpetrated inschool choiceprograms likeFlorida’s havebeen due to government, notmarket, failure.

Accountability to Parents, Not Bureaucrats

The work of researchers such as Hol-combe, Segal, and Chubb and Moe demon-strates that the free market is far superior togovernment at controlling educational qual-ity and guarding against corruption. Leavingeducation entirely to the market would likelyprovide the best, most efficient educationalsystem possible.

However, as long as Americans believethat government must guarantee that allchildren receive at least a minimum level ofschooling, education will likely never bedelivered entirely by the free market, and gov-ernment will be involved to some extent. Andonce government gets involved, bureaucracyis inevitable, which raises the question: Howcan government guarantee a basic level ofeducation while maximizing the effective-ness, accountability, and efficiency possibleonly in the free market?

The cornerstone of free-market account-ability is that those who benefit from a servicepay for it, and those who provide the servicerely on those payments to exist and thrive. Atits core, then, is the very simple dynamic iden-tified earlier: people will pay for schooling thatmeets their needs and desires, and the schoolsthat offer the education that best meets thosedesires, at a price people are willing to pay, willsurvive. In contrast, a school that fails to deliv-er the education consumers want—whether asa result of incompetence, malfeasance, orwastefulness—will perish.

Given what we know about free-marketversus bureaucratic accountability, it seemsclear that we should reshape our educationsystem so that parental choice is its founda-tion. That would likely mean vouchers or taxcredit programs for the poor and autonomyfor the rich. More fundamentally, it wouldmean changing the conception of publiceducation from one based on funding schoolsto one based on funding students, whose par-ents would select their schools. Supply anddemand could then go to work.

To optimize supply-and-demand-drivenaccountability, even the poor should paysomething for their children’s education.Recall that the key to accountability in choiceis that consumers have money of their own atstake when they purchase a product or ser-vice. That provides extra impetus to seek outthe best providers they can find. As AndrewCoulson observed in Market Education: TheUntold History:

What we pay for, we pay attention to.What we get for free, we feel free toignore. To the extent that governmentscholarships defray the cost of tuition,they dispense with parental financialresponsibility . . . the requirement tocontribute to the cost of their children’seducation is one of the greatest incen-tives for parents to take the time andcare necessary to make wise decisions.114

To ensure that they have some financialstake in their children’s education, poor par-ents should be required to pay a set percent-age of the tuition charged by the schoolstheir children attend. What that percentageshould be is debatable, but with averagetuition hovering around $3,500 for privateelementary schools and $6,000 for privatesecondary schools,115 10 or 20 percent wouldprobably not be unreasonable.

Conclusion

When examples of fraud, waste, or abuseare uncovered in school choice programs, theytypically set off firestorms of criticism frompeople who oppose educational freedom.Critics quickly hold up any example of malfea-sance in choice schools as proof that the mar-ket can’t provide the level of accountabilitysupposedly guaranteed in public schools. Butpublic schools’ accountability, as has beendemonstrated constantly in districts aroundthe nation, is a myth. Worse, it’s a myth whosepropagation not only blinds people to the sys-tem’s failure to control corruption but also

16

Leaving education entirely

to the marketwould likely

provide the best,most efficient

educational system possible.

ignores bureaucracy’s disastrous toll on edu-cational effectiveness. Ironically, though, thereis a way to have both educational effectivenessand accountability, and it’s the very thing peo-ple who oppose school choice most fear: truechoice-based education.

Notes1. S. V. Dáte and Kimberly Miller, “State FiresVoucher Whistle-blower,” Palm Beach Post, March 6,2004, www.palmbeachpost.com/news/content/news/vouchers/a7a_metty_0306.html.

2. Kimberly Miller, “Money to Terror-tied SchoolHalted,” Palm Beach Post, July 19, 2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers0719a.html.

3. S. V. Dáte and Kimberly Miller, “TougherVoucher Rules Proposed,” Palm Beach Post, August29, 2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers0829.html.

4. S. V. Dáte, “Operator of School That ClosedStarted Another, Took Vouchers,” Palm Beach Post,September 13, 2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers0913.html.

5. S. V. Dáte, “Voucher Reprimand Takes onPolitical Prisoners,” Palm Beach Post, December 14,2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers121403.html.

6. S. V. Dáte, “Private School Cashed in Vouchersfor Public Students,” Palm Beach Post, March 19,2004, www.palmbeachpost.com/news/content/news/vouchers/c1a_HERITAGE_031904.html.

7. “Newest Voucher Scandal: No Check on ChildAbuse,” editorial, Palm Beach Post, June 1, 2004.

8. Kimberly Miller and S. V. Dáte, “Seven Chargedin Voucher Scam,” Palm Beach Post, June 30, 2004,www.palmbeachpost.com/news/content/news/vouchers/c1a_VOUCHERS_0630.html.

9. South Central Federation of Labor, “Milw. VoucherSchools Expelled for Corruption,” Union Labor News,August 2004, www.scfl.org/uln8-4.htm#voucher.

10. S. V. Dáte, “Florida Vouchers Praised, Panned,”Palm Beach Post, November 30, 2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers113003.html.

11. Ronnie Greene, “Cheating the Classroom:Wealthy Member of Board Got Richer on SchoolFunds,” Miami Herald, April 8, 2002, www.knightri

dder.com/papers/greatstories/miami/cheat5.html.

12. Ronnie Greene and Joseph Tanfani, “Cheatingthe Classroom: Lobbyist Holds Major Role inSchool District,” Miami Herald, April 9, 2002, www.knightridder.com/papers/greatstories/miami/cheat6.html.

13. Ronnie Greene and Jason Grotto, “Cheatingthe Classroom: Florida’s Costliest School GetsPricier with Repairs,” Miami Herald, April 11, 2002,www.knightridder.com/papers/greatstories/miami/cheat8.html.

14. Charles Savage, “Cheating the Classroom:Board’s ‘Big Happy Family’ Run on Mutual Favors,”Miami Herald, April 12, 2002, www.knightridder.com/papers/greatstories/miami/cheat9.html.

15. Ronnie Greene and Jason Grotto, “Cheatingthe Classroom: As Schools Confront ToughChallenges, Millions Spent on QuestionableContracts,” Miami Herald, April 7, 2002, www.knightridder.com/papers/greatstories/miami/cheat1.html.

16. Savage, “Cheating the Classroom: Board’s ‘BigHappy Family’ Run on Mutual Favors.”

17. Charles Savage, “Cheating the Classroom:Private Maintenance Work Pits School Board vs.Unions,” Miami Herald, May 14, 2002, www.knightridder.com/papers/greatstories/miami/cheat13.html.

18. Greene and Grotto, “Cheating the Classroom:As Schools Confront Tough Challenges, MillionsSpent on Questionable Contracts.”

19. Ibid.

20. “Vouchers beyond Repair,” editorial, PalmBeach Post, December 22, 2003, www.palmbeachpost.com/news/content/news/vouchers/vouchers122203.html.

21. Randall S. Clemons and Mark K. McBeth, PublicPolicy Praxis: Theory and Pragmatism: A Case Approach(Upper Saddle River, NJ: Pearson Education, 2001),pp. 43–45.

22. Bruce M. Stave, “Urban Bosses and MachinePolitics,” in The Reader’s Companion to AmericanHistory, ed. Eric Foner and John A. Garraty (Boston:Houghton Mifflin, 1991), www.college.hmco.com/history/readerscomp/rcah/html/ah_088500_urbanbossesa.htm.

23. Douglas Brinkley, American Heritage History of theUnited States (New York: Viking, 1998), pp. 238, 325.

24. Edwin G. Burrows, “Corruption,” in The Reader’s

17

Companion to American History, college.hmco.com/history/readerscomp/rcah/html/ah_020900_corruption.htm.

25. Clemons and McBeth, p. 44.

26. Ibid.

27. Cornell University School of Industrial andLabor Relations, “Fire!” The Triangle Factory Fireseries, January 20, 2004, www.ilr.cornell.edu/trianglefire/narrative3.html.

28. Cornell University School of Industrial andLabor Relations, “Investigation, Trial and Reform,”The Triangle Factory Fire series, January 23, 2004,www.ilr.cornell.edu/trianglefire/narrative6.html.

29. Brinkley, p. 286.

30. James Q. Wilson, Bureaucracy: What GovernmentAgencies Do and Why They Do It (New York: BasicBooks, 1989), pp. 334–35.

31. Bruce Cooper, Lance Fusarelli, and E. VanceRandall, Better Policies, Better Schools (Boston:Pearson, 2004), pp. 138–39.

32. Ibid., pp. 139–44.

33. Diane Ravitch, Left Back: A Century of Battles overSchool Reform (New York: Touchstone, 2000), p. 54.

34. Ibid., p. 102.

35. Ibid., p. 457.

36. U.S. Department of Education, NationalCenter for Education Statistics, Digest of EducationStatistics, 2002 (Washington: Government PrintingOffice, June 2003), Table 87.

37. Cooper et al., p. 144.

38. Common Good, Bias and Sensitivity Requirements,Over Ruled: The Burden of Law on America’s PublicSchools, cgood.org/burden-of-law.html (accessedMarch 14, 2005).

39. Lydia Segal, Battling Corruption in America’sPublic Schools (Boston: Northeastern UniversityPress, 2004), p. xxiii.

40. National Education Association, “Five TalkingPoints on Vouchers,” www.nea.org/vouchers/talkingpoints.html (accessed March 14, 2005).

41. Marcus Egan, Keep Public Education Public: WhyVouchers Are a Bad Idea (Alexandria, VA: NationalSchool Boards Association, May 2004), p. 19.

42. A summary list of all the articles, with links to

them, can be found on the Post’s website, www.palmbeachpost.com/news/content/news/vouchers/archive.html.

43. Dáte, “Private School Cashed in Vouchers forPublic Students.”

44. Anne Ryman, “District Audits Schools afterTest Deceit,” Arizona Republic, October 8, 2003.

45. “Newest Voucher Scandal: No Check on ChildAbuse.”

46. “D.C. School Mismanagement,” editorial,Washington Times, October 3, 2003, www.washingtontimes.com/functions/print.php?StoryID=20031007-095658-9911r.

47. Elissa Gootman, “City Schools Lost Millionsin Food Deals, Report Says,” New York Times,February 5, 2004.

48. Toni Heinzl and Jennifer Autry, “SentencingToday in School Fraud Case,” Star-Telegram, June 25,2004, www.dfw.com/mld/startelegram/2004/06/25/news/local/9010416.htm.

49. James Salzer, “U.S. Indicts Schrenko,” AtlantaJournal-Constitution, November 11, 2004, www.ajc.com/news/content/metro/1104/11schrenko.html.

50. Dáte, “Voucher Reprimand Takes on PoliticalPrisoners.”

51. S. V. Dáte and Kimberly Miller, “BiggestDistributor of Vouchers Quitting,” Palm Beach Post,January 15, 2004, www.palmbeachpost.com/news/content/news/vouchers/vouchers0115.html.

52. Heinzl and Autry.

53. David Shepardson, “Man Sentenced in SchoolFraud,” Detroit News, October 20, 2003, www.detnews.com/2004/schools/0410/25/e01-309221.htm.

54. “Newest Voucher Scandal: No Check on ChildAbuse.”

55. Vanessa Everett, “Background Checks onProspective Employees Do Have Limits,” BeaumontEnterprise, November 11, 2004, www.southeasttexaslive.com/site/news.cfm?newsid=13332044&BRD=2287&PAG=461&dept_id=512588&rfi=6.

56. David M. Herszenhorn, “Inspectors FindSchools Fail to Check Drivers of Disabled,” NewYork Times, October 15, 2004, query.nytimes.com/gst/abstract.html?res=F60F13FD3C5E0C768DDDA90994DC404482&incamp=archive:search.

57. John Wisely, “Error Made in Teacher Checks,”Detroit News, October 10, 2004.

18

58. Dave Weber, “Accused Teacher Was InvestigatedBefore,” Orlando Sentinel, November 16, 2004.

59. Segal, pp. xiii–xiv.

60. Ibid., p. xxii.

61. Ibid., p. xxiii.

62. Jake Wagman, “Schools Audit May Focus onWho Gets What Jobs,” St. Louis Post-Dispatch, October6, 2003.

63. Gootman.

64. William Ouchi, Making Schools Work: ARevolutionary Plan to Get Your Children the EducationThey Need (New York: Simon and Schuster, 2003),pp. 116–17. Notably, the book does not saywhether or not the higher incidence of corruptionis possibly a function of the more bureaucracy-laden districts also being larger. However, in an e-mail Ouchi explained: “Even taking size intoaccount, the rate of abuse is higher at the central-ized districts. However, it could be that the reasonis not the centralization difference but is insteadthe difference in age of the city/school district,but with such a small sample we could not tell.”

65. Wilson, p. 318.

66. Helen Gao, “Schools Fail Safety Test,” Los AngelesDaily News, September 29, 2003, www.smc.edu/budgetcrisis/09_2003/9_30_2003/schools_fail_safety_test.html.

67. Joe Williams, “City’s Educrats Can’t Get ItWrite,” New York Daily News, November 6, 2003,www.nydailynews.com/news/v-pfriendly/story/134177p-119592c.html.

68. Chastity Pratt, “In the Classroom: LateTextbooks Stifle Learning, Students Say,” DetroitFree Press, November 20, 2003, www.freep.com/news/education/books20_20031120.htm.

69. Justin Blum, “Audit Finds D.C. Grades Altered,”Washington Post, December 10, 2003, www.washingtonpost.com/ac2/wp-dyn?pagename=article&contentId=A50880-2003Dec9&notFound=true.

70. “D.C. School Mismanagement.”

71. Jim McElhatton, “Student a No-Show, ButStill Makes A-List,” Washington Times, November12, 2003, www.washtimes.com/metro/20031111-113140-7934r.htm.

72. Alison Gendar, Maria Ma, and Paul H. B. Shin,“Schools Trashed over Files,” New York Daily News,November 15, 2004, www.nydailynews.com/front/story/252879p-216526c.html.

73. Common Good, “Over Ruled: The Burden ofLaw on America’s Public Schools,” November 29,2004, cgood.org/schools-newscommentary-inthe-news-183.html. To look in depth at the internecineroutes an administrator must follow to get eventhe simplest of tasks done, and to read about eachof the myriad sources of rules governing New YorkCity’s schools, go to Common Good’s interactivewebsite, sitepilot.firmseek.com/client/cgood/www/burden-of-law.html.

74. Quoted in Common Good, “Over Ruled.”

75. Paul E. Peterson, “Little Gain in StudentAchievement,” Our Schools and Our Future: Are We Stillat Risk? (Stanford, CA: Hoover Institution Press,2003), pp. 43–55.

76. U.S. Department of Education, No Child LeftBehind: A Guide for Policy Makers (Washington: U.S.Department of Education, 2003).

77. National Center for Education Statistics, “FastFacts: Teacher Trends,” nces.ed.gov/fastfacts/display.asp?id=28.

78. Robert A. Kagan, “Regulating Business,Regulating Schools: The Problem of RegulatoryUnreasonableness,” in School Days, Rule Days: TheLegalization and Regulation of Education, ed. David L.Kirp and Donald N. Jensen (New Westminster,BC: Falmer Press, 1985), pp. 67–73.

79. John E. Chubb and Terry M. Moe, Politics, Marketsand America’s Schools (Washington: BrookingsInstitution Press, 1990), p. 183.

80. Ouchi, p. 14.

81. Steve Farkas, Jean Johnson, and Ann Duffett,Rolling Up Their Sleeves: Superintendents and PrincipalsTalk about What’s Needed to Fix Public Schools (NewYork: Public Agenda, 2003), p. 16.

82. Chubb and Moe, pp. 23, 25.

83. Ibid., pp. 120–22.

84. Ibid., pp. 186–87.

85. Ibid., p. 182.

86. Ibid., p.180.

87. Ibid., p. 63.

88. U.S. Department of Education, Outline ofPrograms and Selected Changes in the No Child LeftBehind Act of 2001 (Washington: U.S. Departmentof Education, January 7, 2002), pp. 1–7.

89. Chubb and Moe, p. 217.

19

90. Ibid.

91. Ibid., pp. 212, 215.

92. Randall G. Holcombe, Public Policy and the Qualityof Life: Market Incentives versus Government Planning(Westport, CT: Greenwood, 1995), pp. 93–106.

93. Ibid., pp. 96–97.

94. Ibid., p. 97.

95. Ibid., p. 99.

96. U.S. Department of Education, “NCES FastFacts: Enrollment Trends, Public & PrivateSchools,” 2003, www.nces.ed.gov/fastfacts/display.asp?id=65.

97. Meredith May, “A Program Trying to Turn At-Risk Youth into Scholars: KIPP Kids Attend from7:30 a.m. to 5 p.m., Wear Uniforms, Must Walk inSingle-File Lines,” San Francisco Chronicle, December29, 2003, sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/12/29/MNG7V3VRBU1.DTL%20.

98. KIPP, “About KIPP: Overview,” January 5, 2005,www.kipp.org/aboutkipp.cfm?pageid=nav6.

99. May.

100. American Montessori Society, “The Historyof the Montessori Movement,” www.amshq.org/montessori_history.htm (accessed January 7,2005).

101. Association of Waldorf Schools of NorthAmerica, “Frequently Asked Questions: PositionStatement,” www.awsna.org/awsna-faq.html#position (accessed January 7, 2005).

102. Eugene Kane, “Marva Collins Explains: SheJust Wanted Her Good Name Back,” MilwaukeeJournal Sentinel, December 18, 2004, www.jsonline.com/news/metro/dec04/285361.asp.

103. Anna Varghese Marcucio, Tim Sullivan, andAutumn Cooper, eds., Charter Schools Today: Changingthe Face of American Education: Statistics, Stories, andInsights (Washington: Center for Education Reform,2004), p. 3.

104. “New Report Gives Evidence of Charters’Impact,” Center for Education Reform, May 5, 2004,www.edreform.com/index.cfm?fuseAction=document&documentID=1760&sectionID=5&NEWSYEAR=2004#%20%20.

105. Marcucio, Sullivan, and Cooper, pp. 38–56.

106. Tom Hutton, “Florida’s Embattled VoucherSystem Has Suffered Yet Another Round ofDamaging Revelations,” National School BoardsAssociation, Legal Clips, August 2003, www.nsba.org/site/doc_cosa.asp?TRACKID=&VID=50&CID=479&DID=31951.

107. Kimberly Miller, “Vouchers Seem Broken asEducation ‘Fix,’” Palm Beach Post, July 20, 2003,www.palmbeachpost.com/news/content/news/vouchers/vouchers0720a.html.

108. Ibid.

109. Laura Vozzella and Tanika White, “City Tookon Plan, Aware of Bond Risk,” Baltimore Sun, March10, 2004, www.baltimoresun.com/news/education/bal-te.md.schools10mar10,1,5097150.story?coll=bal-local-utility.

110. “State’s Plan for Detroit Schools No Substitutefor Tough Choices,” Detroit News, December 8,2004, www.detnews.com/2004/editorial/0412/08/A10-27008.htm.

111. S. V. Dáte, “Voucher Group Head Accused ofLooting $268,000,” Palm Beach Post, January 30, 2004,www.palmbeachpost.com/news/content/news/vouchers/vouchers0130.html.

112. Dáte and Miller, “Biggest Distributor ofVouchers Quitting.”

113. Dáte, “Voucher Group Head Accused ofLooting $268,000.”

114. Andrew Coulson, Market Education: The UntoldHistory (New Brunswick, NJ: Transaction, 1999), p. 332.

115. David F. Salisbury, “What Would a VoucherBuy? A Closer Look at the Cost of Private Schools,”Cato Institute Policy Analysis no. 486, August 28,2003, p. 1.

20