Chapter 4: Competition
4.1 INTRODUCTION Among the different approaches to providing incentives to improve education, the most salient and hotly debated is competition. Terminology is complicated in this category of incentives. The word ‘choice’ is an umbrella term, covering privatization measures – mainly vouchers – as well as other ways of offering parents options for educating their children, such as charter schools. Vouchers are a ﬁnancing mechanism providing parents with the resources to send their children to private schools. They create competition if parents withdraw their children from public schools and the money from the public sector budget follows the child to the private sector. According to the theory espoused by Milton Friedman and other voucher advocates, this reduced ﬁnancing for public sector schools would produce the healthy pressure of market-like competition. Other approaches to privatization and parental choice do not involve vouchers. These blend public ﬁnancing with private provision of services, sometimes through granting a charter and at other times by contracting with private sector providers. At one extreme this can mean true ‘privatization’, as when a school district contracts with an organization to simply take over and manage some or all the schools in a district (Hill, Pierce and Guthrie, 1997). Education management organizations (EMOs) such as the Edison Project are private, for-proﬁt chains of schools that undertake contracts to manage schools and that seek to improve education by introducing management techniques from the private sector. There have been cases in which districts make contracts for instruction in a particular subject area...
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