EDUCATIONAL OUTCOMES IN OECD COUNTRIES
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Woessmann, Luedemann, Schuetz, and West (2009)), and recent evidence corroborates
the conclusion that this is due to a causal effect of private-sector competition (West and
Woessmann (2010)).30
In the U.S., there are limited examples of private school choice, ranging from the
publicly funded school vouchers in Milwaukee, Cleveland, and Washington, DC, to
privately financed voucher alternatives.31 The evaluations of these generally show that
the choice schools do at least as well as the regular public schools, if not better (see
Rouse (1998); Howell and Peterson (2002)).32
In Europe, Bradley and Taylor (2002) and Levacic (2004) find similar positive effects
of school competition on the performance of English schools. Sandstrom and Bergstrom
(2005) and Bjorklund, Edin, Freriksson, and Krueger (2004) provide evidence on
significant positive effects of competition from privately operated schools on the
performance of public schools in Sweden. Filer and Münich (2003) show that the
introduction of a voucher-type system in the Czech Republic led to the creation of
private schools in areas where public schools are doing badly and that the public schools
facing private competition improved their performance.
The major issue on choice and competition is still the limited experience. Teachers
unions and administrator groups invariable dislike the idea of competition - because it
puts pressure on them. Thus, not many examples of operational, large-scale attempts at
competition have been evaluated.
Autonomy and Decentralization. Several institutional features of a school system can
be grouped under the heading of autonomy or decentralization, including local decision
making on different matters, fiscal decentralization, and parental involvement. Almost
any system of improved incentives for schools depends upon having school personnel in
individual schools and districts heavily involved in decision making. It is difficult to
compile evidence on the impact of autonomy, because the degree of local decision
making is most generally a decision for a country (or state) as a whole, leaving no
comparison group within countries. Across countries, students tend to perform better in
schools that have autonomy in personnel and day-to-day decisions (Woessmann (2003a,
2007b); Woessmann, Luedemann, Schuetz, and West (2009)), in particular when there is
accountability (see also the review in Hanushek and Woessmann (2010)).
The U.S. states have varying amounts of local autonomy. One systematic form of
school autonomy is “charter schools,” which are public schools that are allowed to
perform quite autonomously. (Note that these are actually hybrids of choice schools and
public-school autonomy, because they survive only if sufficient numbers of students are
attracted to them and continue to attend them). These schools are relatively new, a fact
30 Note that private school management does not mean private school funding; the international evidence suggests that both
private school management and public school funding are associated with better achievement across countries (Woessmann
(2009)).
31 The largest U.S. voucher program in the State of Florida provides vouchers for special needs students (Greene (2007)).
While there is considerable satisfaction with this program, there is no evaluation available that is based on explicit outcome
measures.
32 A special type of choice in the U.S. is charter schools. These schools are discussed next under autonomy. Also, given U.S.
residential mobility, individual public school districts compete with each other, and more competition appears to produce
better results (Hoxby (2000)), although this finding has been controversial (Rothstein (2007); Hoxby (2007)).