NCPA - National Center for Policy Analysis

Competition with Charters Motivates Districts

August 12, 2013

Proponents of market-based education reform often argue that introducing charter schools and other school choice policies creates a competitive dynamic that will prompt low-performing districts to improve their practice. Rather than simply providing an alternative to neighborhood public schools for a handful of students, the theory says, school choice programs actually benefit students remaining in their neighborhood schools, too. Competition motivates districts to respond to the loss of students and the revenues students bring, producing a rising tide that, as the common metaphor suggests, lifts all boats, say Marc J. Holley, Anna J. Egalite and Martin F. Lueken of the Department of Education Reform at the University of Arkansas.

In order for this to happen, districts must first recognize the need to compete for students and then make efforts to attract those students, who now have the chance to go elsewhere.

  • Since 2007, enrollment in charter schools has jumped from 1.3 million to 2 million students, an increase of 59 percent.
  • The school choice movement is gaining momentum, but are districts responding to the competition?

When the charter movement began in the early 1990s, few students were leaving the traditional system, and district officials were not particularly threatened with the loss of revenues as students and their funding went to other providers. That reality has changed. But before they can respond in meaningful ways, district officials need to recognize the new competitive market.

  • In a constructive response to competition, school faculty and administrators may implement reforms that use resources more efficiently, improve the overall quality of education within the traditional public schools, and increase responsiveness to student needs.
  • If the efforts are successful, then the quality of traditional public schools will increase relative to what it would have been in the absence of competition from charter schools.

Traditional public schools are aware of the threats posed by alternative education providers, but they are analyzing the moves made by competitors and demonstrating that they may have the savvy to reflect, replicate, experiment and enter into partnerships with school choice providers. This evidence suggests that while bureaucratic change may often be slow, it may be a mistake to underestimate the capacity of these bureaucratic institutions to reform, adapt and adjust in light of changing environments.

Source: Marc J. Holley, Anna J. Egalite and Martin F. Lueken, "Competition with Charters Motivates Districts," Education Next, July 2013.


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