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Symposium 2012

Proposal - Replace regulations with incentives in education

The Challenge

Education is a fundamental right for everyone and key to the future of any country. Education has its price everywhere—but the only thing more expensive than investing in education is not investing ...

Education is a fundamental right for everyone and key to the future of any country. Education has its price everywhere—but the only thing more expensive than investing in education is not investing in education. Inadequate education produces high costs for society in terms of public spending, crime, health, and economic growth. No country can afford to leave too many of its children behind and not to help them achieve the competencies needed for a self-fulfilled life in economic independence.

Education policy is plagued by attempts to improve outcomes through regulation, a situation that impedes improvement and frequently puts a ceiling on what outcomes are possible. These attempts invariably require treating all circumstances similarly, thus failing to recognize the importance of local demands and local knowledge and capacity. The alternative is providing incentives for better performance so that the abilities and energies of local people can be energized. Setting proper incentives requires establishing good educational institutions.


Details
The fundamental idea of improved incentives is establishing rewards and sanctions for those who move education toward higher achievement. These rewards would be a substitute for regulations that try to move actions by central command. Instead of telling educators how to do their job, incentives focus on what they should achieve.

  1. Accountability is central to any incentive system. It must be clear what the outcome is before incentives are applied, and this will require clear and transparent measurement of achievement.
  2. Local decision making provides flexibility to educators to find the best way to achieve outcomes – although local decision making without good accountability can produce perverse results.
  3. Parental choice over schools, to the extent feasible, directly involves parents in observing school outcomes and in setting incentives for local schools – since schools that lose students will have an incentive to improve their performance.
  4. Direct rewards for performance of teachers and leaders (properly measured) ensure that educators are working to enhance performance.
  5. Eliminating nonperformers after attempts to improve their performance is an essential element.

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