Wednesday, December 22, 2004

Public funding versus public provision 

Craig Westover responds again to the Maxfield School debate (as discussed here Monday.) The important part today is his distinction between public education and school choice:

In short, "public education" is education in the public interest. It is a "public good" in the sense of "benefit to all." It is worthy of tax dollars. But "public education" is NOT the private fiefdom of the tenurial few. "Public education" is NOT equivalent to a government monopoly. It is NOT a specific institution.

"School choice" is committed to the concept of "public education" in the public interest, not to any specific method of delivering knowledge and skills. A vital "public education" system consists of a diversity of educational options � government-run schools, charter schools, private schools, religious schools and a plethora of other options.

Furthermore, "school choice" means that when any educational institution is not meeting the needs of any individual student, that student has an actionable alternative � a choice. A public education system has a moral obligation to both provide that alternative and make it actionable � for all students.

Craig and I both have libertarian leanings, so when he says public education "is worthy of tax dollars" you know he ain't just whistlin' Dixie. I agree with him in this assessment, but there's a strong difference here. Let me explain.

Like many economists of middle-age, I took my graduate public finance course using Buchanan and Flowers' The Public Finances. Early in the book they make a key distinction.

It is useful to distinguish between public or governmental support or financing of a particular service and the actual governmental operation or provision of a service. ...

Showing a particular service is indivisible among separate users and that exclusion is costly explains collective financing of the service. The actual operation may be carried out directly by government agencies or by private firms hired with governmental funds. This latter decision should rest solely on efficiency grounds. ...

The following examples illustrate this point. The Defense Department contracts with private firms for most of its weapons and equipment. No serious consideration is given to developing and constructing nationalized aircraft factories or rifle manufacturing plants. The bulk of defense "hardware" can be supplied more efficeintly by private suppliers. There is no reason why other public services cannot be handled similarly. A public school system, for example, is economically justified only if it can be shown to be more efficient than some alternative arrangement. (sixth ed., pp. 20-21)

If you want to think about this more, take a sheet of a paper and draw a 2x2 matrix or table. Over the top of the two columns write "financing"; call one column "public" and one "private". Along the side of the two rows write "provision", and label one "public" and one "private". The private/private box is the stuff you and I buy each day. The public/public box might refer to military personnel services -- though even there we find contracting firms. Some parks systems are run as private financing/public provision; one could imagine even contract enforcement being handled this way via bounty hunters.

School choice is simply asking: do you put public education in the public financing/public provision box or the public financing/private provision box? In the latter box lies vouchers, which is simply an accounting scheme for how private providers of education are compensated with public financing. You could have school boards contract directly with schools -- charter schools could be an example of this, though they're more complicated than that. How on earth someone could call this "bashing" by the "right-wing axis" is simply beyond me. What is there about government provision of public education that is sacrosanct?

And, to get back to Maxfield, if the problem with the school is inefficiency of its allocation of public financing, adding more financing doesn't solve the problem.

UPDATE: Mitch:
In a system that spends $11,000 a year on students, why do classrooms do without books, copier paper, programs that actually reach students (music, art, athletics) and impact the students and public, while the administration relentlessly expands? Cynics would say that it's because the district and its (DFL-dominated) board are passive-aggressively passing the pain for any "budget cuts" on to the parts of the system the public sees most immediately, the parts that affect the children as opposed to the Administraton of the Minnesota Federation of Teachers. Cynics say that. On that account, I've become one of them.
Moi aussi. It happened here during two failed referenda as well.