Rethinking the Welfare State: The prospects for ... - e-Library

Primary and secondary education 163
The extra billing and opt-out issues cast into sharp relief the tension between
efficiency and equity in the educational context. Obviously, both provide greater
diversity of supply and hence expanded consumer choices. It is also possible that the
superior quality of education that they may facilitate will have demonstration effects that
translate into political voice by those in the basic voucher system to enhance the value of
the voucher. Alternatively, and indeterminately, allowing partial or complete opt-out
from the basic voucher system may, while promoting efficiency, also may attenuate
political voice in maintaining the value of voucher entitlements and hence compromise
equity considerations. Wealthier families may prefer lower taxes, lower-value basic
vouchers and greater ability to pay “top up” payments for superior educational services.
The challenge of avoiding socially negative “tipping points” in program design is a
daunting one.
Government’s post-design role
Although governments would not be as involved in the provision of primary and
secondary education under a voucher regime as they are under the current system, the
government would still need to be involved in the system to make it operate effectively.
That is, although the government will be doing more steering than rowing, steering is a
demanding and complex task. What will necessarily be involved in the steering role?
There are several functions that government will have to assume after a voucher program
is in place to ensure its continuing efficacy.
The means of supply-side control we choose is of central importance. If we choose to
rely only on ex ante government accreditation, this in itself fails to discipline institutions
that decline over time. Rather than encouraging educational suppliers to maintain a high
quality of service to consumers, ex ante accreditation encourages them to meet at first the
minimum standards for accreditation but then subsequently to disregard quality for the
sake of profit unless periodic re-accreditation requirements were imposed. A more
effective incentive system might entail a continuous process of standardized testing even
after a school is in operation. Problematically, however, this ex post method of evaluation
entails high administrative costs and encourages schools to “teach to the test” rather than
to innovate or to take risks to provide better education to students. 166
If we merely require the disclosure of key data about the administration and
performance of the school, we take advantage of market pressures on poor providers.
Caution must be exercised in this regard, however, because it is possible that schools
would be reluctant to take risks by innovating if their short-run results may suffer. Such a
situation would have stultifying impacts upon innovation in the school system—a
deficiency that a voucher system should counteract, not exacerbate. Another potential
difficulty is that for the market to work effectively, we must depend on the sophistication
of consumers to discriminate good from bad suppliers. This, of course, is far from
assured. 167 The market for primary and secondary education necessarily involves almost
everyone. Accordingly, the consumers of this service will be as varied in terms of their
capacity to evaluate complex comparative performance data as the population as a whole.
Finally, if we make certain results the basis upon which suppliers’ performance is
measured and compared, then we may create serious perverse incentive or moral hazard
problems. That is, if the measure of school success is, for example, the pass rate, then