The Role of Private Sector Management in Public Education

Article excerpt

Using private contractors to improve the management of instructional services will both improve the quality of education and persuade citizens to better support education financially, Mr. Doyle maintains.

IN THE PAST year there has been an explosion of interest in the question of privatization of public schools, which encompasses everything from the old standby -- vouchers -- to such innovations as charter schools, home schooling, and the emergence of private management companies, such as John Golle's Education Alternatives, Inc., and Chris Whittle's Edison Project. Even the U.S. Senate is interested: the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education and Related Agencies, chaired by Sen. Arlen Specter (R-Pa.), held a full day of hearings on 25 January 1994 on the topic of private sector management of public schools.

More important, a number of urban superintendents have begun to explore private sector management as a realistic alternative to business as usual. The cities of Minneapolis, Miami, Baltimore, Hartford, and Washington, among others, have all considered this possibility. In light of these developments, we must ask ourselves, Is there a role for private sector management of public schools, and how might it play out? The short answer is that the role can and will be substantial -- eventually.

There are really two elements to the question: demand and supply. First, what role will the purchasers of services play? That is, will school districts seize or reject the opportunity to use the services of private management companies? Second, what will be the response of the suppliers of management services? Will reliable and competent "education management" companies enter and remain in the market?

Clearly, the two issues are interrelated. Indeed, considered together, they raise a third question: Will supply create its own demand? Not to be confused with supply-side economics, this issue, first formulated by French economist Georges Says in the early 19th century, goes directly to the heart of the concept of entrepreneurship, for which Says can also claim credit. By entrepreneurship Says meant the innovative combination of labor and capital to produce new ways -- often radically new ways -- of creating and bringing to market goods and services, most of which did not exist before the entrepreneur conceived of them.

Interestingly, the central issue of entrepreneurship is not "risk-taking," as many people have come to think, but genuinely new ways to do things. Indeed, an entrepreneur may actually be risk averse; he or she may think of new ways to minimize risk. Most often the risk an entrepreneur runs is confronting convention. In the case of the schools, that means confronting institutional inertia.

The importance of this problem cannot be overemphasized. There are 15,173 school districts in the nation, enrolling more than 40 million children; each of these districts is formally independent, though the degree of state control differs from one state to the next. What is most striking about this diverse system is its utter absence of real diversity. Although school districts are nominally independent, they are so nearly alike in organization and practices that it is almost impossible to tell one from another.

The uniformity of the school system, once thought to be a virtue, is clearly a liability in the modern era. As Albert Shanker, president of the American Federation of Teachers, has wryly noted, if one-quarter of the products made on an assembly line don't work when they reach the end of the line and another quarter fall off the line before the end, the solution is not to run the line faster or longer. Different production processes must be created. Put simply, the nation desperately needs new ways to conduct the business of educating the young, and entrepreneurship must be at the top of any list of reforms.

There are two powerful, intertwined incentives to entrepreneurship: fame and fortune. …