Voices in Education

The Visible Hand: Markets, Politics, and Regulation in Post-Katrina New Orleans
Advocates of school choice argue that when parents can “vote with their feet,” they will choose better schools for their children, which in turn puts healthy pressure on schools to attract and retain students. Guided by an “invisible hand,” the individual actions of families and schools will improve the overall quality of education. Opponents, however, argue that competition for students has adverse impacts on already struggling public schools or may encourage schools to focus on superficial aspects, like marketing, rather than improve curriculum and instruction.

These debates, however, tend to downplay how social and political contexts influence how schools respond to competitive pressures. Most research on choice and competition has focused on the individual behaviors of families or schools, who theoretically have more power and autonomy in systems with choice. We lose sight of important differences in local education markets and their different approaches to market design, incentives, and regulation.

Contrary to advocates’ claims, school choice reforms have not limited the involvement of local government but have redefined its role as one that is increasingly regulatory, guiding and supporting markets through oversight and information rather than directly providing services.The “visible” hand of local government, such as school districts and state agencies, still plays a central role, setting the “rules of the game.” Over forty-five districts are now classified as “portfolio districts,” offering a range of school choices, but these systems look different in different cities. Context matters, but how exactly do different regulatory environments influence the ways in which choice reforms play out?

Nowhere has the experiment in market-driven reforms been more extreme than in New Orleans, Louisiana, where ten years ago Hurricane Katrina and the resulting flooding put 80 percent of the city’s schools under water. Policymakers seized this opportunity to completely rebuild the city’s school system—now virtually all charter schools. Comparing the two governing agencies that oversee New Orleans schools—the traditional, elected Orleans Parish School Board (OPSB) and the state-run Recovery School District (RSD)—I explore the ways in which the regulatory environments (i.e., policies, laws, and regulations) in these two governing agencies influence the nature of market actions.

Drawing on over one hundred interviews with school, district, and state leaders, I found that these two governing agencies had different historical trajectories and philosophies about the appropriate role of oversight and privatization, which shaped their policies and regulations. They played a key role in the education marketplace, overseeing the functioning of the choice market, measuring quality and performance, providing information about school options, opening and closing schools, influencing the potential for economies of scale in school operations, and addressing the unintended effects of market-driven reforms. These policies influenced the type and extent of competition between schools and significantly constrained or enabled school leaders’ abilities to respond to market pressures, sometimes mitigating and other times exacerbating inequities in the education marketplace.

In general, the city moved from what local actors called the Wild West—a system of free choice with little restrictions or regulations, yet ripe with inequities—to one that increasingly developed rules and regulations to address market failures or problems.

Across the country, district leaders are seeking ways to mitigate the effects of the instability inherent to markets and competition. Researchers and news media have described how, without adequate safeguards for low-income families, students of color, or students with disabilities, choice can generate inequitable effects. By describing how particular regulations and policies influence competitive behaviors in New Orleans schools, this study can help policymakers understand the importance and implications of their regulatory roles, and identify specific strategies that have been used elsewhere to mitigate the inequitable effects that markets can generate.

Overall, the findings suggest a need to examine the variations in the contexts of education markets, particularly their regulatory environments, and their differential effects on outcomes of school choice policies. School choice does not inherently generate positive outcomes or massive inequities; the design of these policies matter2,  particularly for their impacts on diversity3  or ability to reduce inequality. It also raises further questions: What is the appropriate role for oversight and regulation in districts with expansive choice systems? Which aspects of the system need more direct oversight, and which areas might need less? What are other districts doing to mitigate unequal effects of choice or disparities in access to high-quality schools?

1Bulkley, K. E., & Henig, J. R. (2015). Local politics and portfolio management models: National reform ideas and local control. Peabody Journal of Education, 90(1), 53–83. http://doi.org/10.1080/0161956X.2015.988528
2Levin, H. M. (2012). Some economic guidelines for design of a charter school district. Economics of Education Review, 31(2), 331–343. http://doi.org/10.1016/j.econedurev.2011.08.010
3Scott, J. (Ed.). (2005). School choice and diversity: What the evidence says. New York, NY: Teachers College Press.

About the Author: Huriya Jabbar is an assistant professor of education policy at the University of Texas at Austin. She studies the social and political dimensions of market-based reforms in education, including how students and families make schooling decisions for K–12 and higher education, and how schools respond to competitive pressures resulting from choice. Dr. Jabbar's forthcoming article, "The Visible Hand: Markets, Politics, and Regulation in Post-Katrina New Orleans" will be available in the Spring 2016 issue of the Harvard Educational Review.