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

Notes 256
is an obvious trade-off involved, however, because the greater the barriers to entry, the less
competitive the education system as a whole will be.
160 It is suggested that extra billing would be inefficient because social efficiency might
militate in favour of an alternate distribution of educational resources. Allocating scarce
educational resources as according to ex ante ability to pay does satisfy a prima facie
utilitarian efficiency condition, but if those who are willing to pay the most are not the most
able to benefit from education, long-run efficiency might not be obtained.
161 This trade-off between equity and efficiency is brought out clearly in the differences
between the school voucher proposals of Friedman, supra note 1 and C.Jencks, Education
Vouchers: A Report on the Financing of Elementary Education by Grants to Parents
(Cambridge, MA: Cambridge Center for the Study of Public Policy, 1970). Friedman
advocates setting the value of the basic voucher at the average per-student cost of state
education (or a proportion thereof) and granting schools the ability to extra-bill freely.
Jencks’ scheme is more concerned with distributive justice and would therefore set the basic
voucher at the full per-student average cost of state education and would provide an
additional increment on the vouchers of poor student. The Jencks scheme would not allow
extra billing or topping up at all, so that schools with a higher proportion of poor students
would have better per-student funding.
162 This is the “duplicity” that Witte points to in his criticism of the politics behind the
Milwaukee school voucher programme. It was introduced as a targeted means of helping
poor inner city children, but has developed into a broad-based programme that may help
middle-income families to the detriment of poor families. See Witte, supra note 2, p. 192.
163 Ibid., p. 74.
164 A no-extra-billing constraint would have to be made credible by mechanisms to guard
against disguised extra billing via mandated or “expected” charitable contributions.
165 Sherry Glied, Chronic Condition: Why Health Care Reform Fails (Cambridge, MA:
Harvard University Press, 1997), p. 220.
166 For a discussion of standardized testing see Janice Stein, The Cult of Efficiency—The
Massey Lecture Series (Toronto: House of Anansi Press, 2001), Chapter 4, in particular pp.
154–68. However, there is some evidence that standardized testing in Canada tests to the
curriculum more effectively than is often the case in American schools. Standardized testing,
then, may be appropriate where tests designs facilitate rather than complicate the
development of human capital. See Panel on the Role of Government, “Voice and choice in
education,” Staff Report: Creating a Human Capital Society for Ontario (Panel on the Role
of Government, 2004), available at: http://www.lawlib.utoronto.ca/investing/staff/staffch2.pdf.;
and Sweetman, supra note 69.
167 J.Douglas Willms and Frank H.Echols, “The Scottish experience of parental school choice,”
in Edith Rasell and Richard Rothstein (eds) School Choice: Examining the Evidence
(Washington, DC: Economic Policy Institute, 1993), p. 49. The authors found that parents
who exercised choice were “more highly educated and had more prestigious occupations
than those who sent their children to the designated school.”
168 For a definition of “credence” goods, see Richard Posner, An Economic Approach to the
Law of Evidence (1999), p. 51. Stanford Law Review, 1477, p. 1489.
169 It may be possible to get around this credibility problem of for-profit suppliers
misrepresenting the quality of their service in two different ways. The first would be by
having an independent organization—perhaps most credibly government—engaged in
information gathering, analysing and dissemination processes. To the extent that education is
a pure “credence” good in the aggregate, however, this effort may be frustrated. The second
way might emerge spontaneously—parents might monitor acceptance rates into key
universities, thereby learning much about the experts’ view of particular schools or
programmes.