Few other societal endeavors distort incentives so dysfunctionally for those on whom the mission of the organization depends so heavily.
Policymakers reasonably aspire to elevate students’ performance and minimize financial costs. They also ask how is it that there can be many promising individual school or district innovations that seldom seem to be adopted more widely or translated to wider-scale improvements in the education system.
Explanations for schools’ frequent failure to achieve these desired ends often come in the form of implorations for “more”—more revenue, more teacher pay, more professional training, more favorable class sizes, more specialists, more materials, more restrictive teacher-licensing requirements, more technology, and so on. If the public would simply be more generous toward education, would allocate more resources, then more desired ends could be achieved.
What is overlooked in such an exchange is that American education has consistently been allocated “more.” There is no contention here that schools receive “enough.” No one truly knows what constitutes enough. Nevertheless, education does consistently receive more revenue, more favorable professional-pupil ratios, more specialists, more of children’s time, more technology, and so forth.
The clamor for more often overrides the views of those who voice a need for less politically popular, but possibly more powerful, structural changes: changes that might enable education to perform more effectively and encourage the adoption of productive innovation more widely.
More might be good, if in all of its practical manifestations it were ever permitted to penetrate the system. But American public education suffers from deeply rooted misalignments that substantially restrict managerial effectiveness, dampen adoption of innovation, and dilute productive deployment of added resources.
Full explanation of these misalignments justifies a book. Suffice it here to illustrate the point by describing a few instances of these structural inconsistencies. For example, authority and accountability are misplaced, performance incentives are misdirected, labor conditions are misportrayed, revenue distribution is misinformed, and connections between institutional levels (K-12 and postsecondary) are often misguided.
When one dons these lenses, solutions, elimination of barriers, appear to reside far more in the world of politics than the realm of research and policy analysis.
Here, then, is a list of education reform considerations for newly elected, or recently re-elected public officials:
• Allocation of Authority. The principal unit of production for K-12 education is the individual school. This is where most interaction between students and teachers takes place. This is where the most informed decisions are made regarding assignment and instruction of students and allocation of staff. This is where a culture of achievement is either constructed or absent. This is where organizational cohesion and purpose are infused or neglected.
Given the significance of the individual school, one would think that this would be the center of decisionmaking and locus of resource deployment. In fact, such is seldom the case. Most school districts rely heavily upon formulaic resource-distribution devices to determine the number and kind of personnel for a school.
The nominal chief executive, the principal, is often powerless regarding important questions of how many and which individuals to hire. The situation is exacerbated when custodians, gardeners, and cafeteria workers report to central-office administrators, leaving the authority of the principal further eviscerated. The situation becomes particularly counterproductive when a central office also prescribes a uniform, off-the-shelf curriculum and perhaps resorts to selecting textbooks and workbooks for teachers.
So what? What is wrong with treating individual schools as nodules in a nervous system mechanically regulated by a central office? An auto-plant manager or the foreman of a biotech assembly line may not have much discretion either. The difference is that the underlying technology in education is far less developed than in technical settings. Hence, there is a far greater need for professional discretion among those delivering the service to clients.
This misallocation of authority damages accountability. The more tightly the decisions and actions of a principal and a school professional staff are prescribed, the less anyone at the school can be held accountable for student performance and other results.
• Allocation of Rewards. A conventional critique of public schools is that the single salary schedule, by which the pay of a teacher is a function of seniority and college course credits beyond a bachelor’s degree, fails to reward good teaching. In fact, this criticism, though accurate, is relatively benign. There is a worse case.
The single-salary-schedule mentality that frequently discourages innovation and excellence among individual teachers also constrains entire school districts from following the logical path to a solution.
There is a more subtle incentive system operating in schools than the one embedded in the salary schedule alone. The unwritten, but widely understood, incentive system among those who are upwardly mobile in American public education is that placing distance between yourself and students results in rewards. The further you remove yourself from classroom duties, the higher your earnings, the more control over your time, the more interaction you have with adults, and the greater your organizational status and individual prestige. The subtext message to a teacher is get out of the classroom and become a counselor, a reading or mathematics specialist, a school administrator, or a central-office official.
Higher earnings for nonclassroom endeavors might be justified if the skill levels for these activities were higher, or if labor-market conditions suggested a shortage. Neither is accurate. Indeed, being an effective classroom instructor is probably the most difficult of the tasks, and being a counselor, reading specialist, or the like may well be less difficult. Furthermore, there is no documented shortage of individuals willing to assume nonclassroom teacher duties.
Few other societal endeavors distort incentives so dysfunctionally for those upon whom the mission of the organization depends so heavily. Bank tellers and local branch managers are provided with little prestige and low pay because their roles are mechanical and there is little discretionary space in which they can operate. In a bank, high pay and prestige are accorded those who determine strategies on which the success or failure of the institution crucially depends. In fact, tellers have been widely replaced today by automation. Schools are different.
Teaching, while still not a science, involves a great deal of craft knowledge. A teacher needs discretion to interact with the complexities of each student, and a principal needs discretion to interact with the complexities of each teacher and many parents. This professional discretion, if restricted or scripted, eviscerates accountability and undermines incentives to perform effectively. Unlike a bank teller or branch manager, teachers and principals need decision room.
• Allocation of Inducements. Almost any layperson, and most educators, will rapidly affirm that there is a shortage of classroom teachers in America. Few other notions are as widespread or as difficult to dislodge.
To be sure, in selected technical areas, such as physics, chemistry, mathematics, and special education, labor shortages do occur. In a few rural areas, there also are valid shortages of teachers. For most of the nation, however, there is a plentiful supply of elementary and secondary classroom teachers. This is especially true when policymakers have made available so-called “alternative” certification procedures, by which a school district can assume greater initiative in the recruitment and training of its teachers.
But the single-salary-schedule mentality that frequently discourages innovation and excellence among individual teachers also constrains entire school districts from following the logical path to a solution. Most free-market organizations, when faced with a shortage in a critical skill area, up the ante; they offer remuneration in excess of what is typical.
School districts can seldom seek such a simple solution. They are often boxed in by teachers’ union contracts that insist that all teachers of similar seniority and training be paid the same, regardless of skill area or instructional effectiveness. The only way they can meet the market for physicists is to pay a similar salary to social studies and history teachers. There is seldom a supply shortfall among the latter subject-matter areas.
The overall costs of raising virtually every teacher’s pay, regardless of supply and demand, handicap districts and jeopardize their ability to find the best teachers for their students.
• Allocation of Revenues. State-authorized flows of financial aid are the mother’s milk of school district operation. Yet there is little that is rational regarding education finance. Overall amounts are not so much the problem as is the manner in which the amounts are generated and distributed.
The manner in which money is raised is irrational. The rhetoric surrounding education finance, to be found in technical terms such as “foundation level,” “base revenue limit,” and “equalization aid,” suggests a thoughtful linkage between costs and necessary expenditures. In fact, only infrequently are education finance amounts determined by a process that links distributed revenues to expected performance outcomes.
The standards movement, by which most states have enacted student-academic-performance expectations, offers an eventual opportunity to render revenue generation and distribution more rational. It is possible to use expectations for student performance as a base from which to work backward to determine costs. Technical means for undertaking this exercise remain primitive.
Only a few states, however, are trying to rationalize their distribution at all. When they do so, it is more likely to be as a result of judicial pressures than an urge toward good government. The conventional stratagem of lawmakers’ first determining how much revenue is available and then determining how much of that amount is to be distributed still dominates.
The more tightly the decisions and actions of a principal and school professional staff are prescribed, the less anyone at the school can be held accountable for student performance.
There is a long-term trend toward greater centralization of revenue generation. More and more education revenue stems from state general funds. Local property-tax sources now account for less spending. The consequence of this dynamic is to dampen overall school-spending trajectories. Once placed in the intense arena of state-level interest-group politics, education must compete with other public-sector preferences. Here it loses the sheltered status it often enjoys when the local property tax is the principal revenue source. Moreover, the presence of added state funding contributes to a policy-system desire for school district consolidation. Taxpayer oversight may be eroded in the process.
Revenue distribution is also a problem. So-called “categorical funding,” wherein a higher level of government specifies use of revenues by a lower level, constrains efficiency. If state and federal governments specified preferred outcomes, and then empowered districts and schools to deploy resources to achieve them, the system might be more efficient. However, categorical insistence on politically popular but empirically questionable solutions (for example, class-size reduction) dampens local responsibility and may erode citizen commitment.
• Allocation of Responsibility. The transition in America to a “mass higher education” began with GI Bill subsidies to World War II veterans. The movement is sufficiently successful that presently 75 percent of high school graduates head for college. But the proportions that stay in college and complete a degree are of a far different magnitude than those that begin.
The absence of overarching responsibility, in most states, for higher and lower education portends continued inefficiencies and awesome waste of human resources. Postsecondary institutions respond, as do K-12 schools, to subsidy incentives applying exclusively to them. The fact that these incentive systems are seldom linked across institutional boundaries assuredly wastes financial resources.
But the failure to use higher education as a means of leveraging important changes in the K-12 system may be the greater waste.
A version of this article appeared in the November 17, 2004 edition of Education Week as An Education Reform Agenda for the Recently Elected