Jerry Ellig and Kenneth Kelly, Texas Review of Law & Politics
Spring 2002
What would happen if education were deregulated? It is this question that the authors of "Competition and Quality in Deregulated Industries" seek to answer when they ask whether opening up public education (a state monopoly) to competition will increase or decrease quality. To put that question in context, the authors, economists working with the Federal Trade Commission, review what has happened to other "critical public services" that were de-regulated in the past two decades-surface freight transportation, long-distance telecommunications, and airlines. In reviewing the evidence, they show that competition tends to lower prices and improve services for virtually all customers, including those who choose to remain with the former monopoly; competition thus improves both the traditional monopoly service provider as well as the new entrants. The authors reviewed studies of voucher and private scholarship programs to see whether the introduction of competition to public schools has had a similar same effect. In examining the Milwaukee voucher program, they discovered that those public schools that faced competition saw student test scores rise twice as much as those facing no outside competition. In assessing the impact of privately funded voucher programs in Washington, DC, New York City and Dayton, OH, the authors noted dramatic gains in the academic achievement of African-American students. In short, they contend, early indications show that competition in education has the same effect it has had on other critical public services: it spurs improved performance. The paper is available at www.rppi.org/education/education31.pdf.
