Julie Novak responds to my cost criticisms of her school vouchers paper.
One important point she makes is that voucher systems would (well, should – we have a counter-example in the higher education voucher scheme) clear away costly ad hoc programs for this and that.
Andrew Norton 
Shame we don’t get more debate like this between right wing economic commentators, rather than the (relative) extremes of left and right all the time.
Her case does come across as more compelling than yours. The big issue in politics at the moment seems to be centralisation of both funding and responsibility because splitting the two respectively between federal and state levels leads to buch passing. Vouchers does seem to deal with this, allowing any government to still subsidise public goods like health and education, while those responsible for effective delivery – the actual consumers and providers – will actually hold each other to account a lot more than they do now rather than simply looking to government to fix everything from on high.
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Mitch – My proposals are voucher schemes. My criticisms of Julie’s proposals are two-fold. The first is that in the most recent paper there is too little about how we are to improve the operation of the majority of schools that are currently public (though Julie has written about this issue in the past). The second is that it costs too much. My optimal proposal was to have vouchers based on the SES funding principle, with no distinctions between public and private systems. My second-best proposal was to have parallel voucher schemes, the SES funding principle for private schools (as now), combined with making government schools independent of their central bureaucracies and letting them compete for students who would have full vouchers of the type Julie proposes for all. This is just a political assessment that abolishing free education for the middle class is too hard.
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The problem with vouchers is outlined here:
The problem with the negative income tax is here:
In light of the above criticisms, neither can be considered a “free-market” reform. They would only make the problems worse.
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Andrew – I’m not convinced of the merits of SES funding, but that may be do to misunderstanding. I’ve searched your previous posts but can’t find anything directly adressing it. As for the latter proposal, we’d end up with a dual system of private and effectively private public schools where one gets direct government funding and vouchers and the other only vouchers, would we not? I can’t see that as much of an improvement over the current system. I think the transition would damage the reputation of vouchers. Plus, as Sukrit mentioned, government funding always comes with excessively bureaucratic strings attached.
Sukrit – There’s no such thing as a “free” market, but I do think within the current framework price signals and the profit motive can be better utilised for social benefit. Vouchers do that. Kind of odd though that you’ve spent twice the effort on negative income taxes than the subject of this thread.
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Mitch – SES funding saves billions of dollars, which is a pretty big benefit in my view. And while you are right that government funding comes with strings attached, the SES model at least makes the opportunity cost of opting out of the state system much lower – indeed, I would have zero public funding at the top of the SES scale, partly to politically destroy the the AEU’s dishonest use of a handful of top schools in its case against private schools, partly because I see an independent upper middle class as politically important.
My dual system is a second best option, as I conceded, due to the difficulties in abolishing free education. However Julie’s as stated is very much third best – it costs vastly more and delivers few or no benefits to the majority of students who will, for the medium term at least, be stuck in a public system with only weak school-level capacity and incentive to improve.
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Apologies for going off-topic, I just thought I’d bring up the NIT as well. Like vouchers, it’s often touted as a “free-market” reform when in reality it’d be much worse than the present welfare system. Anyone who wishes to contest this point would do well to read the criticism I have linked to. With regards to education: If the only motive was to help people who can’t afford education, advocates of government involvement would have simply proposed tuition subsidies, rather than the extensive system of government control we have presently.
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