Published: Sunday, March 7, 2010
Funding can drive change in education
Many people think our financial system is complicated and difficult to understand. Others find that our health care system is very complicated, too. These people are absolutely right — in both cases.
But there are levels of complicated. There’s ordinary complicated and then there’s “so complicated that it makes your head hurt.” Finance and health care are complicated, without doubt, and their problems can be difficult to solve. But people who look closely at our education system almost always come away with a headache and the same observation — “Now that’s complicated.” And its problems don’t seem just difficult to solve, but impossible.
President Barack Obama’s administration is beginning to realize just how complicated our education system is. On Feb. 22, he announced a big change in how the federal funding system would work. In his address to the National Governors Association, the president said, “First, as a condition of receiving access to Title I funds, we will ask all states to put in place a plan to adopt and certify standards that are college and career-ready in reading and math.”
The announcement should have gone over well — just this side of a summer camp announcement that there would be ice cream for dessert. Unexpectedly, though, the proposal for federal funding to standards has drawn fire from every quarter.
The resistance was surprising because the National Governors Association has been working on those very same standards and almost every state has signed on to them. Also, adopting higher standards so that kids were ready to meet the challenges of college and careers was based on one of the president’s popular campaign promises. In our education system, though, yesterday’s cheering of an idea can quickly turn to today’s opposition when the idea is transformed to reality.
Title I of the Elementary and Secondary Education Act — Title I, for short — is the name given to the main source of federal money for public schools. Most education insiders still use this name, despite the fact that the law was amended and known as “No Child Left Behind” during the George W. Bush administration.
That law is set to expire soon, and Congress is considering substantial revisions that include performance standards for students and schools, resource allocation and such things as charter schools. And it is a big budget number, well more than $30 billion, so there are funding issues, too. See, it’s already getting complicated.
From an economic theory standpoint, complicated brings with it certain economic structure issues. Complicated markets, for example, almost always imply what economists call “asymmetrical information.”
Asymmetrical information means that there is more, or better, information on one side of the market than the other. As a practical matter, it usually means the more complicated the product is, the more likely it is that the seller knows more than the buyer, a situation which, unless competitive forces are very strong, discourages change.
The impact of asymmetrical information in our education system is most deeply felt when anyone tries to introduce a change. All things, both human and inanimate, have a built-in level of resistance to change.
With our education system, we know that there will be resistance to change, but we never know for sure where it will come from. If you take care of the teachers union, maybe the parents push back. If you take care of the parents, maybe the school board or the state legislature doesn’t like it.
Underneath it all, though, is economics — like gravity in Newton’s physics, unseen but powerful. The reason behind the president’s move is that America’s schools and students are falling behind those of the rest of the world. This will make us less competitive in global markets and eventually lower our incomes and our ability to sustain either our personal lifestyles or our social goods such as medical care and transportation infrastructure.
There are enough wormholes in the president’s proposed Title I funding requirements to allow states to snake their organizational spaceships through into another reality without actually implementing standards. Certainly our state’s experience with the WASL exam provides a road map for delay and inaction to those wishing to take a similar route.
But economics is on the side of change. And for that reason, tying funding to performance standards will eventually work — even though we are still left with a system with so many constituencies, interest groups and affected parties that “normal” change seems nearly impossible.
The next big step will come when local funding processes such as real estate tax levies follow the federal model and begin to tie financing to performance and results. Now that’s the kind of change that our education system would believe in.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for the Snohomish County Business Journal.
But there are levels of complicated. There’s ordinary complicated and then there’s “so complicated that it makes your head hurt.” Finance and health care are complicated, without doubt, and their problems can be difficult to solve. But people who look closely at our education system almost always come away with a headache and the same observation — “Now that’s complicated.” And its problems don’t seem just difficult to solve, but impossible.
President Barack Obama’s administration is beginning to realize just how complicated our education system is. On Feb. 22, he announced a big change in how the federal funding system would work. In his address to the National Governors Association, the president said, “First, as a condition of receiving access to Title I funds, we will ask all states to put in place a plan to adopt and certify standards that are college and career-ready in reading and math.”
The announcement should have gone over well — just this side of a summer camp announcement that there would be ice cream for dessert. Unexpectedly, though, the proposal for federal funding to standards has drawn fire from every quarter.
The resistance was surprising because the National Governors Association has been working on those very same standards and almost every state has signed on to them. Also, adopting higher standards so that kids were ready to meet the challenges of college and careers was based on one of the president’s popular campaign promises. In our education system, though, yesterday’s cheering of an idea can quickly turn to today’s opposition when the idea is transformed to reality.
Title I of the Elementary and Secondary Education Act — Title I, for short — is the name given to the main source of federal money for public schools. Most education insiders still use this name, despite the fact that the law was amended and known as “No Child Left Behind” during the George W. Bush administration.
That law is set to expire soon, and Congress is considering substantial revisions that include performance standards for students and schools, resource allocation and such things as charter schools. And it is a big budget number, well more than $30 billion, so there are funding issues, too. See, it’s already getting complicated.
From an economic theory standpoint, complicated brings with it certain economic structure issues. Complicated markets, for example, almost always imply what economists call “asymmetrical information.”
Asymmetrical information means that there is more, or better, information on one side of the market than the other. As a practical matter, it usually means the more complicated the product is, the more likely it is that the seller knows more than the buyer, a situation which, unless competitive forces are very strong, discourages change.
The impact of asymmetrical information in our education system is most deeply felt when anyone tries to introduce a change. All things, both human and inanimate, have a built-in level of resistance to change.
With our education system, we know that there will be resistance to change, but we never know for sure where it will come from. If you take care of the teachers union, maybe the parents push back. If you take care of the parents, maybe the school board or the state legislature doesn’t like it.
Underneath it all, though, is economics — like gravity in Newton’s physics, unseen but powerful. The reason behind the president’s move is that America’s schools and students are falling behind those of the rest of the world. This will make us less competitive in global markets and eventually lower our incomes and our ability to sustain either our personal lifestyles or our social goods such as medical care and transportation infrastructure.
There are enough wormholes in the president’s proposed Title I funding requirements to allow states to snake their organizational spaceships through into another reality without actually implementing standards. Certainly our state’s experience with the WASL exam provides a road map for delay and inaction to those wishing to take a similar route.
But economics is on the side of change. And for that reason, tying funding to performance standards will eventually work — even though we are still left with a system with so many constituencies, interest groups and affected parties that “normal” change seems nearly impossible.
The next big step will come when local funding processes such as real estate tax levies follow the federal model and begin to tie financing to performance and results. Now that’s the kind of change that our education system would believe in.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for the Snohomish County Business Journal.
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