Academic journal article AEI Paper & Studies

Carrots, Sticks, and Sermons: How Policy Educational Entrepreneurship

Academic journal article AEI Paper & Studies

Carrots, Sticks, and Sermons: How Policy Educational Entrepreneurship

Article excerpt

Public policy profoundly shapes the prospects for entrepreneurship in education. Not only does government inject billions of dollars into both public and private providers of educational services, but federal, state, and local entities regulate who can deliver services and how services can and cannot be provided.

Compared to recent history, the policy landscape has made education more open to entrepreneurs than ever before. Policy changes at the federal, state, and local level have expanded parents' options and service providers' freedom of action. At the same time, the evolution of test-based accountability and common standards has put new pressures on entrepreneurs working within and outside of the traditional public school system.

This essay begins by considering how different kinds of policy tools--"carrots, sticks, and sermons"--shape entrepreneurship. It then considers how changes to the post-No Child Left Behind policy landscape, including Common Core, charter schools, teacher evaluation, and test-based accountability, have influenced the opportunities and obstacles entrepreneurs face, including their access to resources, demand for their services, and oversight of their work. It concludes with recommendations about how public policy can more effectively encourage entrepreneurship in education.


"Public policy almost always attempts to get people to do things that
they might not otherwise do; or it enables people to do things that
they might not have done otherwise."

--Anne Schneider and Helen Ingram, 1990 (1)

Public policy is the result of government actions (and inactions) intended to shape the behavior of public and private actors. (2) Public policy can take many forms, including laws, regulations, court decisions, and programs.

Entrepreneurship is any activity related to the development of new organizations, methods, or products that challenge or improve upon existing ways of doing business. (3)

Entrepreneurship can be undertaken in both the public and private sector. As described by Patrick McGuinn, (4) public entrepreneurship includes efforts by teachers and administrators employed by public agencies to experiment with new ideas and methods while private entrepreneurship involves similar efforts by individuals and organizations working in the for-profit and nonprofit sectors.

Public policy shapes entrepreneurship in three ways: (1) prescribing action through regulation; (2) incentivizing action through grants or subsidies; and (3) encouraging action by providing information. Colloquially, these different approaches to shaping individual and organizational behavior are known as "carrots, sticks, and sermons."

Perhaps the most traditional means of shaping entrepreneurship is through regulation. Regulation impacts entrepreneurs by requiring certain processes to be followed. In the public sector, regulations limit the kinds of individuals who can become teachers, how students may be assigned to schools, the number of students allowed to be served by a single teacher, the types of curriculum that can be used, and the length of the school day and year. These rules about how schools are organized and staffed can open or foreclose opportunities for entrepreneurs looking to employ new methods of instruction (e.g., competency-based learning), make use of untapped labor pools (e.g., local artists or museum staff to provide enrichment), or make tradeoffs between people and technology (e.g., by using resources dedicated to hiring a teacher to instead purchase software and instructional aides). While regulation typically imposes costs on entrepreneurs, it can also open opportunities. Common instructional standards, for example, can lower barriers to entry to entrepreneurs and expand potential markets for goods and services.

Regulation also dictates how and what kinds of services districts and state education agencies demand from the private sector, thereby shaping the prospects for entrepreneurship by nonprofit and for-profit organizations. …

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