The economic theory of schooling markets: an introduction
In this chapter we introduce the economic analysis relevant to an understanding of schooling markets. Too often in recent debates advocates of particular viewpoints have preferred to present caricatures of economic analysis rather than carefully defining key terms and systematically developing that analysis. As Finkelstein and Grubb (2000) point out, the debate about schooling quasimarkets has settled into a ritual. Supporters of markets cite the advantages of choice and flexibility and the resulting efficiency gains generated, while opponents attack them for the inequalities and narrowing of educational outcomes which result. Terms like ‘efficiency’, ‘accountability’, ‘stakeholders’ and ‘incentives’ have entered into the language of these policy debates without always possessing the clarity and consistency in use necessary for meaningful dialogue. In explaining our terminology and developing the economic analysis systematically, we seek to make that analysis accessible to all those wishing to examine the nature and consequences of recent market-based reforms of state schooling.