1. Market Mechanisms in Education
Henno Theisens
CERI/ OECD

2. Markets in education
Since the early eighties many OECD countries rely increasingly on market mechanisms to govern their education systems
Market mechanisms are the dynamic processes that operate in markets:
competition,
consumer choice and
organisational strategy

3. Market mechanisms School strategising Competition between schools
Increasing school autonomy
Competition between schools
Introducing formula funding based on student numbers or outputs
Increasing private contributions
Freedom of choice for parents
Reduce restrictions on choice
Allow charter schools, introduce vouchers
Provide information on school quality and profiles

4. Two decades of policy debates
An intense and ideological discussion on the consequences
Does it lead to: quality, efficiency and innovation
Or to inequality, segregation and failing schools

5. Two decades of empirical research
Why are the effects of market mechanisms on educational outcomes so small?
Why are the effects so inconsistent across different areas, types of students, types of schools?

6. Parental choice
Parents made choices before the introduction of market mechanisms
While parents attach most weight to quality their choices are best predicted by school composition
Reputation seems at least as important as performance indicators
Parents whose child’s school is underperforming leave that school only in small numbers

7. School competition
Effects of competition only when minimum threshold is reached
Schools often respond to market incentives by co-operation
Competition often leads to investment in marketing rather than quality
Ranking and indicators can lead to strategic responses

8. Conclusion There are no general conclusions
The devil is in the details and in the context
We need more studies that take these into account along with the causal steps that link incentives to outcomes
We need more policy makers to talk about market mechanisms nuanced and evidence based