Competition, everywhere

by Russ Roberts on January 10, 2008

in Competition

I have believed for a while now that an important reason that suburban public schools outperform urban public schools is that suburban public schools have to keep the parents happier because of the competition from private schools. That is, in a rich suburban neighborhood, you get excellent public school, partly because the parents are rich enough to send their kids to private schools if the public schools perform poorly. In the inner city, the parents are poor and the private school alternative is not much of a threat.

I’ve never seen any formal evidence on this. One way to test it would be to look at inner cities that have strong private Catholic schools which usually find a way to take kids, poor or not, and see if that improves the quality of the public schools.

Competition is powerful. When you have alternatives, it forces people to treat you better than they otherwise would, as a customer, as a worker, in business, in education, in love and life, generally.

I was thinking about this while listening to this episode of This American Life, an extraordinary podcast that always inspires me to try and make EconTalk better. (If you want to hear why I think TAL is so phenomenal, listen to Act V You can listen to it for free. Download is 95 cents.)

The episode was a retrospective on Harold Washington, the first black mayor of Chicago who was elected shortly after the end of the Richard J. Daley era, the era when the Democratic machine with all its patronage and corruption was in its heyday, or at least one of its heydays.

The show describes how horribly the Daley Machine treated blacks even though blacks voted overwhelmingly for Daley. The show describes all the racist stuff Daley did in the way he allocated contracts, handed out patronage jobs, used federal funds to keep blacks in black neighborhoods and so on. One black alderman recounts feeling like "The Garbage Alderman" because he spent so much time getting the city just to pick up the garbage  in black neighborhoods.

But of course that’s the way it was. The blacks had no alternatives. They couldn’t vote Republican. So you get the seeming ironic result that one of the most loyal voting blocs received virtually none of the swag from the system. They had no alternatives. Daley didn’t have to be nice to them. He knew they’d vote for him anyway, especially in the general election. Just another delightful aspect of democracy’s bluntness as a tool for self-expression.

The other tragicomic part of the story is that it appears that Washington, once elected, didn’t use the spoils system to disproportionately reward blacks, black neighborhoods, black contractors. Some of his followers, expecting more of a bonanza, saw this as "undemocratic" and the show essentially takes it as a given that the Irish mayor gives the Irish goodies, the Italian mayor gives the Italians goodies, etc. That’s America but there’s a double standard for blacks. And that Harold Washington conformed to that standard and simply treated blacks equally, which was a huge improvement over Daley.

I don’t know if any of that is true, The tragicomic part is implicit and sometimes explicit thinking that municipal government is about the spoils rather than doing something that makes the city run well.

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  • PaulD

    Perhaps there is some impact from competition, but I think that effect is overwhelmed by the effects of demographics. Parents in high performing suburban schools tends to be highly educated, they place a high value on education, they are very involved in their children's education and they have high expectations for their children. I suspect that these characteristics of the families in suburban schools account for the better educational outcomes more than the actual quality of education provided in suburban schools.

  • mark seery

    "Just another delightful aspect of democracy's bluntness as a tool for self-expression."


    This was the sentence that most caught my attention.


    As to the initial subject of schools, it might be worth considering whether suburban settings provide a better salary to cost of living ratio for teachers and therefore make them more appealing. I suspect the answer is a combination of many things, including the competition bf private schools, though not exclusively.


    I could theoretically send my kids to a suburban private school but it is very difficult to assess the cost/benefit in an environment where one option seems cheaper (I am going to pay the same tax regardless of where I send my kids). Therefore the extent to which private school is a true option is limited. Public school therefore simply has to meet a minimal standard of acceptence rather than a standard of excellence.

  • mith

    "One way to test it would be to look at inner cities that have strong private Catholic schools which usually find a way to take kids, poor or not, and see if that improves the quality of the public schools."


    Another method that might be a little more direct is to look at suburban areas that don't have private schools as an alternative. Are the public schools in those areas better or worse than those that have to compete with private schools. That might eliminate some of the variability issues with the populations of inner city versus suburbs.

  • John V

    well, let's not forget that what goes in has a lot of influence on what comes out.


    My brother is a small town teacher and he always says that a dentist who gets nothing but rotten and diseased mouths isn't going to have all his patients leaving with shining white smiles. But a dentist who deals primarily with healthy mouths and just performs cleanings and cavity fillings with an occasional root canal or crown is going to have a lot of healthy smiles leaving the office. Is that because the latter dentist is better?


    Let's not forget that poor urban students and the social environment from which many poor urban students come present a host of problems for teachers and administrators that suburban simply don't have to deal with. Of course, also having family as teachers in urban schools, I can tell you from their complaints that the adminstrations are very corrupt and lack the incentives to improve on their current product.


    Would there be better results with institutional reform that changes how the market for education works (even you even want to call it a market)? I think so.


    But the raw materials factor is still there.

  • Bruce G Charlton

    Assuming that Russ is correct, and that private schools do compete with public schools, and by competing drive up the standards of public schools - then how does this competition work?


    What is the bottom-line for public schools, and why should their managers care if they lose pupils to private schools?


    I'm not sure how this would work. Losing lots of the (?best) kids to private schools (and losing their more educationally- concerned parents) might be more likely to _lower_standards in public schools, than to raise them...

  • Evan

    Another method that might be a little more direct is to look at suburban areas that don't have private schools as an alternative.


    Of course, there might not be private competition in an area specifically because the public schools there perform well, for whatever reason.

  • All-Time QB

    John,

    Excellent point. I don't see a carrot for suburban public schools to compete with private schools because the cash isn't attached to the student going out the door.


    I just took "There's No Such Thing as a Free Lunch" back to the library. IIRC, Friedman didn't necessarily assert the competition aspect, more that rich suburbanites had created quasi private schools as they have the $$$ to attract the best teachers.


    Demographics must play some role as well.

  • All-Time QB

    Excuse me...that comment was for Bruce, not John.

  • Shakespeare's Fool

    Russell,

    "The blacks had no alternatives. They couldn't vote Republican."


    Pray tell, why couldn't they?


    John

  • Gil

    Golly, I could put my anarcho-Libertarian hat here and ask why should education (and therefore public schools) be mandatory? How many of us done jobs where the only literacy/numeracy skill required signing a timesheet? I could be swayed against education where schools could be much nicer when those who couldn't be bothered aren't required to attend and won't annoy those who do. Those who don't like school could go out into the workforce at a younger age and come back when they want to improve their literacy and numeracy skills. Despite what futurists might think of jobs in the 21st century there are still plenty of low-skilled jobs.

  • brotio

    Gil,


    You can ask that if you want, but it's irrelevant to this thread.


    Public funding for education isn't going away any time soon, so why shouldn't anarcho-libertarians, libertarians, conservatives, liberals, and even you and Murthaduck (the children they've killed in cold blood) be asking about ways that might improve the education we're paying for.


    Anyone who thinks the average suburban school is GOOD is mistaken - they're only better than inner-city schools. Suburban kids would benefit from competition, too.

  • Gil

    Weeeelllll! Throw at a thought which is rather Libertarian but gets throw back at me cause I'm not a Libertarian! Elsewhere a similar debate would produce the answer 'let the free market solve it'. After all, is it really true that education is a public good? Is it presumed to be a public good because it has been lumped in the 'public good basket' for so long?

  • vidyohs

    "Weeeelllll! Throw at a thought which is rather Libertarian but gets throw back at me cause I'm not a Libertarian!

    Posted by: Gil | Jan 11, 2008 9:36:47 AM"


    As I have said before you aren't very literate either.


    Is that ebonics you're writing? Or was it supposed to be English?





  • vidyohs

    muirduck and Gil, two that walked away from education before English classes began and just for got to ga back and complete their education.


    Proof again that the Socialist Church screws kids because all the priests and evangelicals are stupid, illiterate, and undisciplined (can't have standards, that would imply degrees of quality which is verbotten in the Socialist Church); whereas, the Catholic Church can teach kids because the priests are literate, intelligent, and disciplined.

  • vidyohs

    "and just for got(forgot) to ga(go) back and complete their education."


    At least I recognize my fingers aren't always faithful.





  • I'm stunned that no one seems to know of Caroline Hoxby's research on the effects of competition on public schools.

  • I'm stunned that no one seems to know of Caroline Hoxby's research on the effects of competition on public schools.

  • John V

    Yeah, Patrick...


    Go on and forward that one to the National teachers union. Good luck.

  • Slocum

    The problem with the private school competition hypothesis is that you're not taking into account the way funding works. In most cases, a public school district's funding doesn't depend directly on the number of students, so if a student leaves for private school, that's actually a good thing because the dollars are the same but there's one less mouth to feed.


    Once Michigan went to statewide, per-pupil funding, only then did public school districts get interested in competing with private schools and charter schools -- and even with each other, since many districts in Michigan are 'open enrollment' and compete for students (and per pupil state funding) from neighboring districts.


  • brotio

    Slocum,


    Unless Michigan's open enrollment law is drastically different than Colorado's, students can only enroll in other PUBLIC schools. Per-pupil spending in this scenario still forces you to choose one NEA school or another. I want vouchers so that public schools have to truly compete in the marketplace.

  • brotio

    Gil,


    I didn't throw anything in your face. I just pointed out that the question you asked wasn't on-topic.


    I'm sure it would be a lively debate whether or not education should be publicly funded. Whichever side of the debate I'm on, though, I still want to look for ways to improve on what I'm already paying for. How about you?

  • brotio

    Forbes,


    Many other cities have extensive private or parochial school systems, too. And, just like in New York, in order to take advantage of that system, you have to pay twice; once with your taxes for the public school and then tuition for private/parochial school. Most people can't afford both and a voucher would make it so they wouldn't have to.


    If, after vouchers, NYC's public schools STILL won't improve their product? Then they'll go away - like Studebaker.

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