Does competition improve teaching and learning? Evidence from New Zealand. Educational Evaluation and Policy Analysis

HIGH on the policy agenda of many people in the United States and elsewhere are education reforms that would expand parental choice of schools and force schools to compete for students. Advocates of more competition assert that, by analogy to the private sector, competition will induce schools to provide higher quality education at a lower cost. Although not all arguments for more choice and flexibility for parents and schools rest on its alleged productivity benefits, the belief that competition will increase the productivity of the education system is central to the debate about market based reforms in education. Regardless of what form additional choice takes—whether in the form of vouchers that can be used at private schools, charter schools that receive public fund-ing, or choice within the public school system— most students are likely to remain in the tradi-97 tional public schools. Thus for the provision of more choice and flexibility to improve education for the bulk of the students rather than just those who take advantage of the new options, compe-tition must increase the productivity of the system as a whole. Given the importance of the issue, it is surpris-ing how little is known about how competition affects educational outcomes. As discussed in the next section, the evidence is still limited and piecemeal, with the best evidence to date coming from Chile, which has had more than 20 years experience with vouchers and competition. The availability of comprehensive test score data in that country allows researchers to tease out the effects of competition on student outcomes. In this article, we provide additional evidence on the effects of competition on student learnin