Vouchers and Charter Schools: The Latest Evidence

Transcript

T. Loveless: Let me welcome you to the Brookings Institution. I am director of the Brown Center on Education Policy here at Brookings. And we're pleased this morning to have a distinguished panel to discuss issues concerning school choice, vouchers and charter schools.

Let me introduce our panel. Actually, before that, let me tell you about two other events that are upcoming at the Brown Center. On March 20, we're going to have a presentation on urban school reform, a panel with David Kearns and Jim Harvey and Paul Hill of the University of Washington, also some fellows here at Brookings. That's on March 20. On April 11, we'll have a panel discussion of the role of teachers' unions in educational reform, and that will be on April 11th here also at Brookings. If you're on our E-mail list, you'll get information that way about these events.

First of all, let me introduce our panel this morning, from the left to the right, or actually, as you're looking at it, from the right to the left. Ted Fiske is formerly the education editor at the New York Times from 1974 to 1991. The book that he co-authored with Helen Ladd is called "When Schools Compete: A Cautionary Tale," and they'll be talking about the findings of that book. Ted also is the author of "Smart Schools, Smart Kids" and the editor of the annual "Fiske Guide to Colleges."

Helen Ladd is a professor of public policy studies and economics at Duke University's Sanford Institute of Public Policy. She also was the editor of Holding Schools Accountable, which is a Brookings Institution Press book. Again, the title of their book is When Schools Compete: A Cautionary Tale.

Bryan Hassel, who is seated just next to Sunny, is the author of The Charter School Challenge. He's the director of Public Impact, which is an education policy consulting firm in Charlotte, North Carolina. And he's the co-editor of Learning from School Choice.

To Bryan's left, Bruno Manno is formerly the Assistant Secretary of Education for Policy and Planning in New York's Department of Education under President Bush. He currently is a senior program associate with the Anne E. Casey Foundation in Baltimore, Maryland; the co-author or author of over 100 articles and co-editor of two books. The title of the book by Chester Finn and Bruno Manno is "Charter Schools in Action: Renewing Public Education."

His co-author, the final person down there on the end, is Chester E. Finn, Jr., known to all of us here in Washington. Chester, known as Checker, is the John M. Olin fellow at the Manhattan Institute. He's also president of the Thomas B. Fordham Foundation and a distinguished visiting fellow at Stanford's Hoover Institution, formerly Assistant Secretary for Research and Improvement, Assistant Secretary in the Department of Education.

So with that we'll start with Ted Fiske.

H. Ladd: We'll keep Ted Fiske.

T. Loveless: We'll start with Helen Ladd. [Laughter]

H. Ladd: I'll be making a presentation. Ted will certainly join in as we get to the question and answer session.

Many proponents of school reform view changes in educational governance as the key to improving troubled urban schools. In particular, advocates of charter schools and vouchers often share a belief that if only urban schools were freed from the bureaucracy or the heavy hand of public school bureaucracy and were forced to compete for students, the quality of education would improve.

Our main message today is that a market-based reform strategy will not solve the problems of the most troubled urban schools. In fact, it will exacerbate them. The only way to improve the schools serving large concentrations of disadvantaged students is to pursue policies that directly address the educational challenges that these schools face.

We base these conclusions not on evidence from the U.S., but rather on evidence from New Zealand. The U.S. evidence is woefully inadequate. Charter schools are too new and experiments with vouchers too small to determine their effects on the traditional public schools. New Zealand, in contrast, provides a laboratory of 10 years of experience with self-governing or autonomous schools operating in a competitive environment.

As we document in our book, "When Schools Compete: A Cautionary Tale," New Zealand's experience provides a variety of lessons for the U.S. and other countries considering such reforms. Today, in the short time available to us, we want to focus on just one lesson — that choice and competition will not solve the problems of troubled schools.

Of course, you might well ask at this point, how relevant is the U.S. experience — or how relevant to the U.S. is the experience of a country like New Zealand, which people think of as so much smaller, so much more rural and so much more homogeneous than the U.S.? Certainly as a country, New Zealand is indeed small, and its residents are outnumbered by sheep by a ratio of 12 to 1. But New Zealand's population of 3.8 million is comparable to that of the median American state, which happens to be South Carolina, and its ministry of education is the functional equivalent of a state education department under our U.S. decentralized system.

Moreover, New Zealand has similar social, cultural and political traditions to that of the U.S. And the number of sheep notwithstanding, most of its residents actually live in the urban parts of the country. Perhaps most important, it has a significant minority population, with Maori accounting for 14 percent of the total, and Pacific Island another 6 percent. Like African-Americans and Hispanics in the United States, these minority groups tend to achieve in school at much lower rates than students from European backgrounds.

So what was the nature of the New Zealand reforms? In 1989, under a Labor government, New Zealand abolished its Department of Education, which had run the country's 2700 schools, and turned operating authority over to school-specific elected boards of trustees dominated by parents. Two years later when a conservative government came to power, New Zealand ratcheted the reform up a notch by giving parents the right to choose which school their children would attend. Funding has remained primarily the responsibility of the government, with money for operations and teacher entitlements allocated to schools essentially on a per-pupil basis, so that schools that lose students lose some funding.

In our book, we describe the resulting system as one of self-governing schools operating in a competitive environment. It has also been described as a quasi-voucher system in that funds follow the students, including those attending religious schools, which are part of the public school system in New Zealand.

In certain ways, New Zealand can also be viewed as having a whole country of charter schools, albeit charter schools that were all converted from public schools. Our analysis, which is based on information gathered primarily during our five months in New Zealand in 1998, shows that self-governance, choice and competition did have a number of positive effects. For example, schools generally like their new operational freedom, and most, but not all of them, have been able to manage that freedom and flexibility.

In addition, parental choice has been popular, and parents have taken extensive advantage of the right to choose their child's school, with large resulting impacts on enrollment patterns. Moreover, anecdotal evidence suggests that having to compete for students has had an energizing effect on many schools, at least the middle-class areas, where schools competed against each other on a more or less even or level playing field.

The problem is that not all schools competed on such a level field. Our close examination of changes in enrollment patterns shows that parents in New Zealand tend to judge schools by the mix of students who attend those schools. Schools with high proportions of European or white and privileged students are considered good. Those with high proportions of minorities or disadvantaged students are considered less desirable. As a result, schools that started out in the early 1990s with high proportions of disadvantaged and minority students were at a significant disadvantage competitively relative to other schools.

Our data show that over the course of the decade such schools lost large numbers of students to those schools having what was perceived to be a more desirable mix of students. This means that they also significant amounts of funding, and, of course, teachers, all of which made it even more difficult to compete effectively for students.

One effect of the movement among schools has been that minority students have become increasingly concentrated in the schools at the bottom of the distribution. More generally, the reforms have led to greater concentrations than otherwise would have been the case of difficult-to-teach students in such schools.

Under New Zealand's rules of engagement, popular schools were more or less free to select the students they would accept, so that they tended to be attractive to easy-to-teach students. Less popular schools had to accept anyone who came along, and some were pretty desperate for students, and they ended up with a relatively high proportion of students with learning or behavioral difficulties, those with limited English, those from dysfunctional families, or those suspended by other schools. In other words, the reforms seriously complicated the challenges faced by some schools.

For several years, the Ministry of Education tried to ignore the problems of these troubled schools, many of which were located in the low-income and largely immigrant area of South Auckland. One reason was that the theoretical justification for parental choice and competition provided no rationale for government intervention. If schools were failing, they presumably would go out of business to be replaced by more effective schools. Moreover, any interventions would weaken the very competitive forces that policymakers hoped would improve the schools.

The theory, however, did not work. It turned out to be politically difficult in most cases to shut down the failing schools, in part because entrepreneurs were not waiting in the wings to take over these troubled schools. Only after several years, and with great reluctance, did the ministry of education begin to intervene, and only then in response to strong political pressure from the media and from the education review office, which is the accountability arm of the government. When it did so, it tried to define the problems of struggling schools as essentially managerial problems, and thus only provided managerial assistance. But such intervention proved to be inadequate.

The theory underlying the New Zealand reform and market-based reforms in the United States holds that schools will become better if they are given operational flexibility and are prodded by the need to compete for students. The troubled urban schools we observed in New Zealand had operational flexibility. They certainly had incentives to offer programs that were attractive to parents and students. And in some cases they were well-managed. Yet still they were unable to compete successfully in the new educational market.

Our conclusion, based on our analysis of the New Zealand experience, is not that various forms of choice, vouchers and charter schools are inherently undesirable. To the contrary, we found that such governance reforms had positive effects for large numbers of students. What New Zealand does show, however, is that autonomy and competition cannot and will not, in and of themselves, solve the problems of troubled urban schools. Instead, the reforms exacerbated such problems.

What this means is that if the United States continues to take steps down the path of more choice and competition, policymakers should not naively expect them to solve the problems of the schools at the bottom. The evidence from New Zealand indicates that significant safeguards will be needed to protect the students in such schools and that such safeguards should be built in from the outset.

Thank you.

B. Hassel: Good morning, everybody. I have a three-year-old daughter whose name is Margaret, and I'm sure those of you who are parents in the audience have the same experience of trying to teach your children all kinds of things. And the thing is, they tend to learn lots of things that you don't want them to learn. And one thing my daughter has recently learned is the word "disgusting." [Laughter] I don't know how she managed to get this word. She probably learned it from me.

But she usually says it in reference to food. She usually sees something on her plate which, of course, she has not yet put in her mouth, and says, "This is disgusting. I'm not going to eat this." And, of course, being a good parent, wanting her to eat her vegetables and get her vitamins, I always say, "Well, why don't you try it? You might like it. You might not. But why don't you try it? Don't say it's disgusting before you even put it in your mouth." And, of course, this doesn't work.

But the reason I tell this story is that I was speaking with a friend yesterday about this event, and the friend said, "Well, what does your book say? Are charter schools a good idea? Should we be doing this everywhere across the country or not?" And I had to tell him, "Well, that's not what my book is about. That's not what 'The Charter School Challenge' is about. It's not a book that concludes that charter schools work or that they don't work."

"Charter School Challenge" is a book about giving this reform a try. It's a book about trying a reform that's been proposed, that's been debated, that's been talked about in largely theoretical terms, but it's something that needs to be tried in order to determine whether or not it's going to work. Certainly we have some evidence about charter schools. It's highlighted in the book we're going to hear about next, "Charter Schools in Action." Certainly we can learn from other experiences in other countries, such as New Zealand.

But charter schools as a total package of reform that includes giving autonomy to schools, holding them accountable for results, giving parents choice about where they attend schools, having funding follow the child to the school is a package of reforms that we need to try fully in the United States in a variety of contexts and see if it works before we can draw any strong conclusions about it.

And the book, "The Charter School Challenge," is about giving this reform a try. In particular, it's about what's happened in many state legislatures around the country when charter schools have been proposed. And what's happened in many states is that in the process of having charter school legislation, compromises have been struck in order to get the laws enacted, compromises in many cases that are so severe that the resulting laws don't look very much like the total package of charter school reform that many of us think about in theoretical terms.

And in those states, you might think about half of the states in the Union that have charter schools, were not really trying the charter school reform in its full sense. For example, in almost half of the states that passed charter school legislation in the first seven or eight years of charter schools, local school districts were given a veto over whether a charter school opened in their school district. That's one of the issues documented in "The Charter School Challenge."

And there're arguments to be made for that kind of approach. But if that approach is enacted in the state, it's not really a full try of the charter school idea, which is to give people a route outside of the local school district to open a charter school. And there are other examples of that sort of compromise. And the book traces the effects of these compromises within several states that had early charter school laws and looked at the ways in which they affected the ability of the program to be given a full test and finds that in many cases we aren't learning anything about charter schools in the states where the laws are so compromised if they aren't full charter school experiments.

So when I think about the charter school challenge, what I think about is the challenge of giving this reform the best chance it has to work and in seeing what happens. And I want to talk this morning about the challenges that this reform poses to four groups. The four groups I want to talk about are charter school authorizers, the organizations that oversee charter schools and are responsible for holding them accountable for results; secondly, charter school operators themselves; third, districts, the school districts that compete with charter schools; and then, finally, policymakers, the legislators that ultimately are going to decide the fate of charter school programs around the country.

Let me start by talking about the charter school authorizers, the organizations that oversee charter schools. In the book, I propose a pair of challenges for this set of organizations. The first challenge is the challenge of creating meaningful systems of results-based accountability. We all have the rhetoric. We're going to hold charter schools accountable for results. But these are the agencies that are charged with putting that idea into action, and it's proven very challenging.

Sunny talked about the difficulties in New Zealand of responding to schools that are performing at low levels, what can be done about that, and the difficulties of crafting a workable policy in that regard? There's a similar challenge faced by charter authorizers here in the United States, and the challenge is many-fold. It involves setting appropriate expectations for school performance, measuring school performance in a way that makes sense in the context of what the school is trying to accomplish. It means acting on the result of information that comes in from those assessments. And it means making decisions about whether to continue a school's charter or not.

But it's more than just an issue of closing schools that aren't working. The challenge is for authorizers to establish a system of accountability that encourages schools to improve, that gives them a framework within which to think about what they're trying to accomplish, how they will know whether they are accomplishing that, and then improving over time, based on the information that they receive. That, much more important than simply closing down schools that don't work, is the real promise of an accountability-based system.

There's a second side of the challenge, though, to charter school authorizers. Charter school authorizers in this country are supposed to give charter schools a great deal of freedom, but they still have certain responsibilities to ensure that charter schools are complying with many of the laws that apply to charter schools still. There are many that still apply. Federal laws all apply to charter schools. Many residual state laws apply. Charter schools have to submit certain kinds of reports and fulfill other regulations, because they're still public schools.

And the challenge to authorizers in this department is to ensure that as they implement these policies of ensuring that charter schools comply with the many regulations that still apply to them, they don't rebuild the entire system of compliance-based oversight that affects regular public schools. In fact, one of the primary ideas behind charter schools is to take schools outside of that system. And so authorizers have the challenge of figuring out how to make sure the charter schools are fulfilling their public obligations, for example, with regard to spending funds in a responsible manner without recreating the entire apparatus of compliance-based accountability that we see under regular systems.

So authorizers have some of the most substantial challenges in this field. But I need to move on to a second group, and that's charter school operators themselves. I'm not going to say much about them. If you want to read about the challenges charter school operators face, the "Charter Schools in Action" book is certainly an excellent source. The recent fourth year report of the U.S. Department of Education study of charter schools contains a lot of information.

I want to talk about one challenge in particular, and that is the challenge of infrastructure. Charter schools in some ways are the quintessential anti-infrastructure reform. We're taking schools outside of the school district. We're taking schools outside of the typical state apparatus of regulations and supports for schools. And this is the compelling argument for charter schools in some ways.

But there're many problems that arise when the school is completely autonomous. One is they don't have access to economies of scale that might save them money. Another is they don't have access to a lot of the accumulated wisdom and ideas about how to run schools, maybe not so much on the educational side of things, because that's what they're trying to do differently with them, but on just the basic administrative functions of running a school.

And finally, the tension of charter schools' leaders often is diverted heavily into infrastructural matters. If you talk to charter school principals around the country, you'll hear that they spend an awful lot of their time dealing with facilities, dealing with transportation, dealing with other things that are not directly related to the teaching and learning that's going on in the school. And I think we'd all agree that it's imperative for school leaders to focus as intensively as they can on teaching and learning rather than on these other matters.

And so a challenge for charter school operators is to figure out how to recreate an infrastructure that helps their leaders focus on teaching and learning that again does not recreate the system from which they have escaped. Charter schools need to think of ways to recreate an infrastructure that makes sense for autonomous schools, and I think they're doing so in many places. They've established associations. Resource centers have emerged that provide services to them on a voluntary basis. Private firms are emerging that provide a range of services to them on a voluntary basis. And they engage in some pretty innovative thinking.

Here in Washington, many of the schools have created a collaborative, a cooperative, to provide special education services to its members. It's a membership organization, and so it's not anything that's imposed upon the schools, and yet it provides an infrastructure that can solve some of these problems. Those are some examples, but I think that's an ongoing challenge for charter school operators.

A third group that's challenged by charter schools are school districts. School districts are the enemies with which charter schools are competing. And the idea behind charter schools is these districts will be compelled in some way to respond to the competition and improve their offerings. And this is often conceived in a certain sense. It's conceived in the sense of charter schools trying out innovative practices and then districts adopting those practices within their own schools.

I want to pose the challenge somewhat differently. I think the challenge for districts is to look at charter schools and charter school programs as an example of a new way to relate to the schools under your jurisdiction. School districts need to regard charter school programs as an example of an institutional innovation from which they can learn something about how they deal with the schools that are under their purview.

I think that if many superintendents and school board members watch the charter school experiment carefully, they will find some interesting ideas about how to solicit people from the community to run schools, about how to structure relationships with them that give schools autonomy while creating accountability, and ultimately improve the way districts oversee their own schools. I think that's the challenge that's posed by charter schools to districts.

And then finally, I want to talk a bit about challenges that are posed by charter schools to policymakers. The first challenge is the challenge that I talked about at the outset of this talk, which is the challenge of having the courage to try charter schools. Policymakers — and there're many varieties of them — some of them are opposed to charter schools in any form. Some of them would like to see charter schools almost no matter what kind of evidence is presented about them. But there's a critical group of policymakers in the middle that are interested in charter schools, would like to give the policy a try, but are not true believers, do not have a passionate view that this is something that will solve all of America's educational problems. And I think those are the critical policymakers, because they often decide the debates in state legislatures. And I think these policymakers are often swayed by the notion that since we don't know whether charter schools work, we need to try a kind of half-approach to charter schools. We need to limit their numbers greatly. We need to limit the amount of freedom that they have. We need to limit the degree to which they can go outside of their local school districts for authorization.

But I would caution against this kind of thinking, because I think the result of it is, like my daughter, not trying something and then making a conclusion based on something that you haven't yet tried.

A related challenge for policymakers is to act wisely on the results that we begin to get from charter schools. We're beginning to see test score results. We're beginning to see the results of annual evaluations of charter schools. We're beginning to see the results of academic studies of charter schools. What should policymakers do with this information? How should they decide whether the charter school policy is a success?

And I think caution is called for in this regard. Certainly part of the question is, are individual charter schools succeeding? And that is a complicated question in its own right. But the policymakers also have to ask, what is the effect of this policy on the broader system of education? And that's an even more complicated question to untangle, which should not be lost by looking at the success or the failure of individual charter schools, which is really only part of what the policy is intended to accomplish.

These challenges that affect policymakers, district leaders, the people that are overseeing charter schools, the charter schools themselves, are, I think, ultimately healthy, because they have spurred so much creativity across this country, so much innovative thinking about how to run schools, about how to oversee schools, and about how to construct policy for education. It's created a lot of hard work for people, but that work, I think, will ultimately be productive and creative. And I think we need to let the experiment run out so we can see how these challenges are met and what kind of success we can achieve.

B. Manno: Good morning. Let me begin by thanking Tom Loveless and Judy Light here at Brookings for organizing this. I also have to begin with a special plug for my own foundation, the Anne E. Casey Foundation, which is helping to underwrite some of the expenses related to this, including the purchase of the book for all of you. So if you didn't get a book on the way in, make sure you get one on the way out.

I'd like to do — Checker and I would like to do three things in the time that we have: explain what we did; secondly, outline what we found; and thirdly, discuss what's new and different about the book. I'd like to do the first two, and Checker will do the wrap-up, discuss what's new and different about the book. So let me begin and get right to the point.

What did we do? This book, "Charter Schools in Action: Renewing Public Education," really emerges out of nearly four years of immersion in the world of charter schools, those independent public schools of choice freed from rules but accountable for results that now number nearly 1700 schools and enroll upwards of about 300,000 students in 34 states and the District of Columbia.

The book began as a two-year research project called "Charter Schools in Action" where we endeavored to examine the practical and policy issues surrounding the creation of charter schools. During the course of our project, we visited over 100 schools across the country, interviewed hundreds of people who both support and oppose the charter movement, surveyed thousands of parents, students and teachers, and read just about everything we could get our hands on, from newspaper stories to journal articles to state and federal reports on charter schools.

The results of all of that is a book called "Charter Schools in Action: Renewing Public Education." The purpose of the book is to really introduce the reader to what we call the reinvention of public education via charter schools. We believe that it's an option between the presently existing government-run system and the total privatization of education that some seek.

The 12 chapters in the book are organized into two parts. The first part, called "Charter Schools in Action," depicts what we know about charter schools. And the second part, called "Renewing Public Education," steps back to view what is happening beyond the perimeter of individual schools and what the charter movement means for developing what we call a renewed American public education. The book actually concludes with a picture of public education in the year 2010, reinvented along charter precepts.

What did we find? Now, if you go to the handout that you received on the way in that had a back and front to it, it's a little difficult for me to reach the point where I can say that almost everything we learned is not on the back and front of this page, of this paper. But for all practical purposes, I've tried to kind of enumerate quickly 10 statements that summarize what we know in the back page, talking about one of the statements on the front page. Now, I'm not going to really run through these in any detail, but let me quickly give you a kind of cut at it.

Ten things we know, as Bryan has pointed out; I won't say anything other than to make the statement that not all charter laws are created equal, and that has implications for what happens in a state. Secondly, we have an enormous amount of descriptive and statistical data on charter schools, and we present a lot of that in the book. Third, charter schools face numerous obstacles, and we've gotten to the point where we pretty well know what all those obstacles are, and we even know how to begin to overcome many of those obstacles.

Fourth, most of the allegations against charter schools turn out to be false or exaggerated. Now, if you flip on the back part of the page that you just received or which you got a few minutes ago, you'll see 10 allegations against charter schools. And we discuss all of those allegations and show, we think, how many of them, most of them, are either allegations that turn out to be false or are exaggerated.

Point number five; this goes back to a point that has come up in both of the prior conversations, presentations. Charter schools are really seed beds of what we call institutional innovation; that is, an innovation that begins to think about a public school as autonomous and self-governing, as independent, as a school of choice, that's accountable for results. And they do manifest great organizational and educational diversity.

Point six: Charter schools have an eager clientele and provide their families with a variety of different kinds of services. And this eager clientele is both on the supply side and on the demand side. For example, 70 percent of the charter schools that exist have waiting lists, and they're also on the supply side. Many, many different people lined up to open these schools.

Point number seven, related also to point number eight: Charter schools generally satisfy their primary constituents and they're good at leveraging parent involvement in a variety of ways.

Points number nine and 10: These schools are having ripple effects on school districts, on communities and on American education, and they're advancing our knowledge of education accountability. Checker will take up on the last two points to talk a little bit about them.

Let me say that, at day's end, we think that the book defends what we call the principle and the function of public education while arguing for a top-to-bottom makeover of its ground rules and institutional practices. Our purpose in writing the book is not really to advocate charter schools per se, and neither do we try to promote any specific school design, any specific curriculum or any specific pedagogy. Rather, we believe that the charter idea is worthy of being examined and tested and that its central assumptions — namely, schooling based on choice, autonomy and accountability — can undergird a new model of public education. And Checker will pick up and fill out that point a bit.

C. Finn: Thank you very much. That was brisk and efficient, and I appreciate it. I'd also like to thank Brookings for this Princeton booking piggyback on a Brookings event and thank the Anne E. Casey Foundation for underwriting all the giveaway copies in the outer room. And I'd also like to parse, for those of you who've been staring at this cover, wondering what it's about, I tried this out earlier on Sunny and she figured it out after staring closely. This is a moving school bus, and in the background are the faces of moving children. And this is meant by the artist to depict action. And in case you hadn't figured that out for yourself, you now know, and you will no longer be mystified by what the cover artists think they were actually up to.

Bruno has recapitulated the theory of public education that we are about here, the notion that a public school satisfies three criteria: if it's open to anyone that wants to attend it, if it's supported by public dollars and doesn't charge tuition, and if it is accountable to duly constituted public authority for its results and can be shut down and doesn't have its life guaranteed. In other words, a public school does not have to be a government-operated school run by a bureaucracy.

It's that crucial conceptual bridge that you have to get across before I think you begin to understand what charter schools are all about and the sense in which they are public schools and the sense in which we contemplate a new kind of public education organized in this way. It's akin to the system that I think Ted and Sunny found in New Zealand. America being America, it would, of course, be different here, and indeed would be 50 different differences because it would end up being different in each state.

The book, I think, breaks some new ground. There have been a lot of writings and studies about charter schools. I think we break some new ground in three areas. One has to do with accountability, and that's mainly in chapter six. And it's been widely said that the problem with charter schools is they're not accountable. Well, they are, actually. Fifty-nine of them have either closed or been closed after opening during the brief lifetime of charter schools in America; the latest federal numbers. That's about 4 percent of all charter schools that have ever opened their doors in America. And mind you, that's all within the last eight years. About 4 percent of those that have ever opened their doors have subsequently closed or been closed for various reasons, all sorts of reasons.

I invite you to find the traditional public school system where 4 percent of the schools have in eight years closed or been closed, either because people didn't want to attend them or because they weren't doing a good job. Indeed, we suggest that charter schools are highly accountable because they're accountable in two directions, not one. They are accountable to their clients, on the one hand. If nobody wants to attend them and nobody has to attend them, then they will close by starvation if nobody wants to come. And they are accountable, as it were, upward, to their sponsor or authorizer. If they don't deliver on the terms of their charter, they have no right to expect that their charter will be renewed. And if they engage in some kind of gross malfeasance, they have every reason to expect that they will be terminated. And this has, in fact, happened--maybe not as often as it should have happened.

But most people's versions of accountability go along the lines of regulatory compliance. And when most people say charter schools aren't accountable, they mean they're not following all the same rules as a traditional public school. Well, the fact of the matter is, if charter schools followed all the same rules as traditional public schools, there'd be no point in having charter schools because they'd be exactly the same as traditional public schools, subject to all the problems that charters are meant to be an alternative to.

So what we suggest in chapter six is a new way to think about accountability. And we call it accountability via transparency. And in its simplest concept, it is that so much information about charter schools ought to be out in public view for all constituencies — friends, enemies, parents, students, teachers, authorizers, you name it. But the charter schools become accountable through a kind of information marketplace, much like corporations are accountable through the audit information that is out there in public view.

There are generally accepted accounting principles for corporations that allow you to compare them with each other, to understand whether they're making a profit, losing money, things like that. We suggest generally accepted accountability principles for education and how this might work for a concept of accountability via transparency that I think might be a good idea even for regular schools, but certainly would be an alternative for charter schools to regulatory compliance.

The second area in which I hope we've at least suggested some new ground is the interaction of characters and communities. And here we venture into the territory of civil society and suggest that charter schools for the most part aren't just schools; they're also institutions of civil society, Tocquevillian kinds of places that constitute Americans banding together to solve problems by creating new institutions. And incidentally, about 70 percent of all charter schools are new institutions; about 30 percent are conversions of pre-existing public or, in some cases, private schools.

There's a very interesting sub-question here about the effects of charter competition on American private schools. It could turn out to be more interesting than the effects on traditional public schools. Nevertheless, a classic American response to institutional — to either community needs and problems or to institutional failures and shortcomings or obsolescences is the creation of new institutions, new voluntary associations.

And charter schools, created by teachers, by parents, by community organizations, some even by private firms, are a form of civil society aspect of American public education renewing itself, and, if I may say, a kind of reinvention of the one-room schoolhouse, of the village school that a century ago was what we meant by local control in American public education but which has been, to an enormous degree, wiped away by consolidation and metropolitization and bureaucratization and is, in some interesting ways, being recreated, re-established through the charter phenomenon.

The third thing we do here that I don't believe anybody had done before is we actually do try to contemplate what an all-charter school system would look like. Sunny and Ted in their book suggest that that's not a good idea and that charter schools ought to remain sort of marginal institutions off on the side of a regular government system. And a year and a half ago, actually, when we started sketching in chapter 12 — and chapter 12 is a kind of imaginary journey through an all-charter system — when we started sketching how that might work, it seemed fantastical to us. We thought this was fiction we were writing. And in a sense, it still is.

But a couple of interesting things have happened in the last year and a half. First of all, charter enrollments in a few communities have grown to an impressive degree. Here in the District of Columbia it's up to about 10 percent of all kids are in charter schools. I heard the other day that in Kansas City 12 percent of all kids are in charter schools. In little Dayton, Ohio, where my foundation is involved, 11 charter schools are operating right now. Up to six more are going to be open by September. And there have been 40, count them, 40 inquiries from potential charter operators for the schools for 2001. There are various political barriers in Ohio to having that many. But the fact of the matter is you can begin to contemplate a system in which a very large fraction of the kids, and maybe someday all the kids, have this option available to them.

And also in the last few months, some unexpected voices have been raised to suggest that maybe an all-charter system would be an interesting thing to do. The president of the National Urban League, Hugh Price, has written a very interesting piece suggesting that all the schools in an urban community might be chartered. And the educational commission of a state, of all places, that most people would think of as a very mainstream organization, has suggested a couple of alternative futures for the governance of American public education. And one of them, one of their two models for the governance of American public education was essentially an all-charter system.

So take that imaginary tour in chapter 12 if you're so inclined and begin to acquaint yourself with some of how that might work and what that might look like and what it might feel like.

Two last points. First, I want to encourage you and us to avoid double standards when we examine charter schools. And this double standard avoidance goes in two directions. One direction was actually sketched in the New York Times about 10 days ago by Richard Rothstein, who said in effect that charter advocates should not find themselves settling, happily cheering, for lower-level behavior in the charter schools they like than they would settle for in the regular public school system that they're critical of. Fair point.

Reverse point: Critics of charter schools demand a kind of standard of perfection before they even try the idea that they would never apply to the system that we've got, just because we've got it. They expect charters to solve all problems in all schools for all kids before they're even willing to seriously contemplate undertaking it, whereas in regular schools they are often willing to tolerate a kind of high level of malpractice year in and year out just because that's what's there now; another form of a double standard that I think is as troubling as the one that Rothstein raised, called our attention to.

Lastly, this being Washington, it's probably just worth making one political note in an election year. As best I can tell, all four of the seriously alive presidential candidates at this moment are for charter schools; varying degrees of enthusiasm, I think they'll admit. But as far as I can tell, they're all four for them. And what does this say? What does this signal, other than the fact that charters will probably be a non-issue in the presidential election, which is fine.

I think it says that there's a degree of bipartisan convergence on this idea that is a very interesting development in American education if it's true. And I think it's tentatively true. Probably the best ending as I want, and I think I'm done. Thank you. Tom, it's your turn.

T. Loveless: And I, too, want to thank the Anne E. Casey Foundation for co-sponsoring this event. Let's throw it open to questions. You can address your question either to the panel as a whole or to an individual. Yes.

Question: I'm Dwight Holmes from People for the American Way. I noted that no one here other than the reference in point number eight [Inaudible] has discussed EMOs, or education management organizations. And one thing we've been — as a disclaimer. Some of you may be surprised to know People for the American Way is not necessarily [Inaudible]. But we think that the rules matter, as one recent book said. And there's a major contrast between kind of the idealized vision of a mom-and-pop school, the village school or the one-room schoolhouse, and the developing reality that in many states, particularly Michigan and Ohio, the EMOs are taking over the schools. At least 70% of schools in Michigan are now run under contract with EMOs.

And so I would address the question to Bryan, whether, you know, is the movement really about improvement and innovation of education, or is it about privatization? And to checker and Bruno, I would say, yes, if charter schools have different criterion of your definition of public schools, that is, can it be truly accountable to the public if it is, at the same time, bound by allegiance to stockholders?

B. Hassel: Well, let me — I mentioned in my talk the importance of infrastructure for charter schools. And one of the things that's emerged is a host of private companies that are willing to provide a range of services to charter schools, including companies that will basically run the whole operation for a charter school — bring in a curriculum, bring in instructional methods, bring in a management system and put that into place.

And my response to the question that was posed to me directly is the fact that these companies have entered the market is not evidence that charter schools are about privatization, that that's the purpose. It's evidence that there's a range of ways in which groups have come together in the United States to form charter schools, are seeking to run their schools. Some of them are doing it themselves. Some of them are contracting with these private companies. Some of them are contracting with private companies to do a small range of services. Some are contracting with their local school districts.

There's a range of different arrangements out there, just as, within the regular district public system, there are a range of different ways that districts get things done. They contract with private companies to provide all kinds of services for school districts, everything from textbooks to transportation. And so this is evidence primarily of creative effort on the part of charter school operators figuring out how to get the work done of their school.

Now, it certainly does present challenges, but they're not unique to the private operation of charter schools. They really relate to the larger challenge of how are charter schools going to be accountable and the issues that I talked about that face charter school overseers and authorizers.

It doesn't really matter whether a charter school is being operated day to day by a private company, a group of parents, a group of teachers, a group of district administrators, a group of community members. The most important thing is that there's a system in place that needs some kind of principles of accountability, perhaps like the ones that are outlined in "Charter Schools in Action."

If that principle is met, the particular type of organization that's running a charter school should not be of concern to us, in my view. So that's what we need to focus our energy on is getting that accountability system straight. And then let's let a lot of different organizational forms emerge, because I don't think there's any reason to say at this point that there are certain kinds of organizational forms that we don't want. The whole point here at this point is to try a lot of different things and see what kind of things work, and probably ultimately to have a diversity.

C. Finn: In Dayton, Ohio, of the seven charter schools currently operating, one is run by an EMO, which, for those of you who don't know, is an education management organization, a private, for-profit company that operates charter schools. One is run by an EMO. One is a conversion school that was formally a public school within the system. And five are mom-and-pop operations. The point to keep in mind — so it's far from a takeover or a conquest of the charter movement, at least in that community, by EMOs.

Keep in mind, though, what EMOs bring with them that mom-and-pops almost can't do. EMOs bring with them capital, the ability to get hold of a building, the ability to put in furniture and train people to work in it. Mom-and-pop charter schools in almost every state in the country have no access to capital. They have very limited access to startup funds. And people who are founding them are doing it on their personal Visa card.

It's a real challenge to start a mom-and-pop. I'm for mom-and-pop charter schools. I hope they are the majority. But I'm saying that under the rules that charter schools are set up under in most states, it's real hard to start and succeed with a mom-and-pop school.

H. Ladd: Just a point of data. As best as I can tell, if you look in the report that the Center for Education Reform just put out on this issue of charter schools, the point that they make in there is that 10 percent — the best that anyone's been able to estimate this — 10 percent of these schools are actually contracting with an EMO. So it's hardly something which is a major issue at this point, though you're correct in saying in some states more than others.

Question: Yeah, a question actually for Bryan. If, in fact, the EMO provides the capital and then the charter-holder has to then manage the contract, isn't there a conflict of interest where the contractor is coming in and giving the money to the charter-holder to have the school in the first place? Don't they then become the raison d'etre? And then how do you manage that situation?

B. Hassel: That is certainly a challenge. And actually, Margaret Lynn in the audience and I have written a piece about this. The board of the charter school — in most states, the charter school is run by a board of trustees, often a non-profit board of trustees or a public board of trustees — has to think carefully about entering into a relationship like this with a management organization, because if the management organization has brought large amounts of capital to the table, owns the building perhaps, has other kinds of investments, there is a risk that the cart will be put before the horse. There is a risk that the charter school board will not really be able to run the school, because the management company will be in a position to dictate terms, having had such a large investment.

And this piece that Margaret and I wrote is intended as guidance for charter school board to think through constructing a contract that can make sure the charter school governing board is in the driver's seat, that it's the charter school governing board that's hiring the management company and that they can have reasonable control of the situation.

And in the case of, for example, a management company that has brought significant capital to the table, it's important for a charter board to make sure that if they want to terminate the contract with the management company, they can pay off whatever loan they've taken from the management company or take out whatever investment they have with another set of investors, and then be free to move on without the management company. If they don't have that right, you've got the kind of problem that you're talking about.

But that's really something that charter school boards need to work out with management organizations. I don't think that's so much a policy question as it is a governance question for charter school boards.

T. Loveless: Anybody else want to comment on that question?

Could I ask you also to identify yourself, please, when you ask your question? Yeah.

Question: I'm Justine Baker [Inaudible]. I just wanted to ask about that I think it's in the position of authorizers, I think there's also a product to be authorized. We look very carefully at the contract that management companies have. And the boards of those schools are responsible for the authorizing. So anything that they have in that contract has to meet our standards on what the board is expected to bring to us. So I think it's a three-fold thing. The authorizer has to be a central part of that.

Question: I'm David Bolt with the Philadelphia Inquirer, and I was going to ask you about a focus of concern in Philadelphia, where the school board has just delayed the approval of new charter schools because they say they are costing the school district too much money — $38 million, to be precise — because of the fact that during the time the charter schools are starting up, the schools do not achieve any significant savings; that is, they can't close any classrooms. They can't turn out the lights. They can't hire a school nurse. They can't cut down on the number of classes. I was wondering if Bryan or Bruno or Checker, in your book, if you have addressed this problem and suggest what the answer is to it.

B. Manno: In fact, we have. That's the first allegation on the back of the paper that we handed out, and we'll even give you a page number in the book where we talk about it. But the gist of the answer goes something —

[Off-mic, inaudible remark]

B. Manno: The gist of the answer goes something like this. There's, first of all, the question about whose money is this money? Is it the district's money in the sense of the district controls money, or is the money really taxpayers' money that is, in some sense, strapped onto the child, that follows the child wherever that child goes?

There's the sort of related issue here, and Ted Colderie [sp] talks about it this way. You know, part of the charter idea is that districts need to feel the pinch before they really begin to change. And if there aren't consequences built into this thing that we call the charter movement, you can pretty well bet that, districts being districts, will continue to be districts. So if there isn't some pinch — that is to say, they lose students, they lose money, kind of built into the system — the question becomes whether they will ever change what they're doing. So that's at least two levels on which this question can be answered.

Question: In cities around the country, has it worked out? Has it eventually come to the point where the charter school is not adding to the public education expenditures of the jurisdiction?

C. Finn: Well, first off, it's on page 152 if you want to read the two paragraphs on it. No school district likes to have some of its kids go off in charter schools, even though 100 percent of the money never follows the kids. The national average, about 80 percent of the money that would otherwise be spent in the public schools follows the kids to the charter schools.

Typically what happens is state money follows, but some of the local money doesn't and some of the federal money doesn't, which is how you end up with kind of an overall 80 percent average. In fact, the districts end up keeping the 20 percent or so that doesn't go with the kids to the charter school. And in some places, they end up with more money per kid for the remaining kids.

But what you're really describing, David, is the kind of management failure by the public school system. If it loses 500 kids to charter schools, it has lost enough kids that it could shut down one of its schools. But it is unwilling or unable to engage in the redistricting and kind of complexity that would be needed to shut down one of its schools and redistrict the rest. They take for granted that none of their schools can close, none of their teachers can be laid off or even transferred, and therefore they claim to have no savings. But it's because of a management system that doesn't want to achieve those kinds of savings that they end up with no savings. They could, in fact, regroup their system for a smaller enrollment and realize the savings. Then they might even have to lay off an assistant superintendent at some point. And that would, of course, be more painful than anything else.

T. Loveless: Sunny, do you want to — ?

H. Ladd: Yeah. I'd just like to weigh in. This notion that if you take funding away from the schools, that they will improve, seems to be basic to the argument that Checker is making. And we'd just like to add a note of caution to this discussion. In New Zealand, we have the schools operating as individual schools. Some of them lost 30, 40, 50 percent of their students. These are urban schools with large percentages of disadvantaged students. They were unpopular schools. They lost students.

If Checker's theory is right, you'd expect these schools to then become so much better that they would get some of those students back. But it just doesn't work that way. They had the flexibility. They had operational authority. They had strong, strong incentives to try to get those students back. But the playing field was just not level.

[TAPE CHANGE]

E. Fiske: — in terms of their educational offering. If a school is popular and even oversubscribed — has more people wanting to get in than it has places, it's in the position to target its education program in a pretty precise way, and to really work to nurture a particular approach to education. If the school is trying to compete for virtually every student with a 98.6 body temperature who walks by, it has to try to be all things to all people. So what we observed in a number of these schools is that there is a fusion of the education program.

I went to a parents night at one school, one of these struggling schools, and the principal — his pitch to the parents was, whatever your needs, we can offer them. We have the college preparatory program; we have the technical program; we have everything. You talk to the principal afterwards, and he says this is a formula for failure because we're stretched so thin that we can't really offer any depth in anything. So they don't give up and roll over; they simply become, you know, lesser institutions academically.

The other issue which I want to throw into the mix here is what evidence is there that schools actually model or take seriously effective models from other schools? And this is a long-standing issue in American education. But this concept that there are lighthouse schools out there, and they're successful, and other people are going to simply follow their methods. It just doesn't happen. I'm not sure. Historians debate why this doesn't happen. But this idea that the charters are going to be out there discovering, innovating approaches which will then be incorporated by the public system as a whole, I am just not convinced that it happens.

T. Loveless: I would just add, too, there are jurisdictions that have passed hold harmless provisions where the public school district continues to receive the regular amounts of dollars, even though they lost the kids. They receive it for maybe one or two years. Massachusetts did this. And what this does is allow them then to invest that money in trying to improve the school, because obviously they had a problem because they are losing kids.

C. Finn: The state basically paid twice in those cases for those kids.

T. Loveless: Yes. That's right —

C. Finn: Just another anecdote. This isn't charters. But in the famous example in Albany, New York, where Virginia Gilder gave private scholarships that enabled about 20 percent of all the kids in one very bad elementary school to leave it, the system in fact responded. They said let's get new staff; let's get new books; let's get new leadership; let's bring in new teachers; let's change this school. As far as I can tell, they changed the school and they have at least begun to attract some of their students back. It is possible in the presence of imaginative management and leadership for a school to respond to competitive threat, or a school system, by saying what do we have to do differently to get those kids back? We've got a number of anecdotes in our book of that kind of response.

T. Loveless: Question over here.

Question: My name is Arthur Jarman. I'm in charge of membership and communications for all the British [inaudible]. And I am very pleased to be here and very interested in the presentation. I just wondered because what happens over here basically can very soon happen over there. [Laughter] So it seemed to be a good idea to come over here. [Laughter]

C. Finn: We always thought it worked the other direction. [Laughter]

Question: It just occurred to me to wonder what is so bad about the basic American education system — ? [Inaudible]

T. Loveless: Panel? [Laughter]

C. Finn: Well, first of all, I think that American charter schools are emulating the British Grant Maintain [ph] schools in many respects and that the transference of an idea actually flowed West across the Atlantic, and we thank you for it.

The nice thing about this kind of innovation, the charter schools, is they are optional schools, and people who are satisfied with the schools they've got are under no pressure of any kind to attend the charter school instead. So people who don't feel that there's a problem in their child's education don't go to charter schools. People who do go to charter schools are people who for some reason are dissatisfied with the offerings available to their children. And that's not everybody by a long shot. Many people think their kid's school is doing just fine, and they are perfectly content to keep their kid where he is, and from their point of view the system is not broken.

The most of American public school systems are also trying in their various ways to fix themselves from inside at the same time. We've got several different kinds of reforms going on at the same time in this country. And in Philadelphia, for example, just to stick with a recent example, has a crusading superintendent with an extremely ambitious comprehensive and expensive plan for repairing the school system. That is going forward at the same time as this charter activity is going forward in Philadelphia. This is true in city after city. Both things are happening at once.

I mean, it's a typically American response to a problem, which is instead of the kind of tidy, "let's do one thing at a time," we are doing six things at a time. But I think on the whole that's a healthy development.

H. Ladd: I agree with some of what Checker has said. Our own view is that American schools aren't in disastrous shape. There has been a changing philosophy here though. It used to be that one size fits all, and that's appropriate within the education system. And I think there has been an increasing recognition over time that different children learn better in different environments, and sometimes it's hard to provide that variety of environments within the larger public school system. So I think Ted and I would both agree that there is a role for schools like charter schools in this system. For those students who aren't functioning well for whatever reason in the traditional public school system, it makes sense for there to be some sort of safety valve or other alternatives for them.

I think where we would differ is, based on our New Zealand experience, we would argue strongly against moving toward a whole system of charter schools, and we can go into those reasons if you want. They are in the book. So we think charter schools will serve their purpose best if they remain on the fringe of the system where they can be places where schools can do innovative things, and then if those innovative things don't work or don't work with particular students, those students still have the option of going back to the existing traditional public school system run by the government. And, you know, there're whole — there're a number of other issues that lead us toward thinking charter schools make most sense in terms of a lot of the goals that the charter school proponents have put forth if they remain on the fringe.

Let me just mention one of them having to do with the accountability and the role of the authorizing agencies that came up before. If charter schools are going to achieve the goals that a lot of the supporters would like for them, it is important that the authorizing agencies look at them closely and look at these contracts closely. It's going to be very complicated if we have a whole system of charter schools. And I just can't imagine how that part of it would work for a whole system. But as long as we have them on the fringe and we are viewing them as schools trying to offer new ideas, or new ways of doing things, or to meet the needs of certain students whose needs are not currently being met, I think they are probably a good thing.

E. Fiske: Can I just speak briefly to your point about whether American schools are in trouble or not? I mean, as you probably know, there's a huge debate over this in Phi Delta Kappa and in other education journals, and some people are saying that, Jerrold Bracy [sp] and others, that, you know, what's the problem, in effect.

I think where the crunch comes to crunch, most people would agree that maybe the problem is at least urban schools, that our urban schools are really in trouble. In Durham, North Carolina — well, actually throughout the whole state of North Carolina, people were very surprised to discover — and, Checker, you probably know the numbers on this — that over half of the charter schools have come out of African-American communities. And after designing the laws very carefully to avoid the possibility for resegregation, that whites would use the charter schools as a way to recreate, in effect, "Seg" Academy, everybody was startled to discover that support for the charters was much stronger in the black community than it was among the whites. And so that's significant. And I think, as a journalist looking at this, I find it really interesting that this is the strange bedfellows that are pushing this. So you have the left and the right coming after it, and that's one of the things that's important to understand about the movement.

Question: Deanna Duby. [Inaudible] — I guess my question is primarily for Checker and Bruno. After your four years of immersion into the charter school movement, you mentioned that 4 percent of them have failed or closed. How do you evaluate one of the successful programs?

C. Finn: That's a very good question —

Question: And why?

C. Finn: I'm sorry?

Question: And why?

C. Finn: I think there're some perfectly appalling charter schools that I wouldn't send any child I cared about to.

Question: What's the page reference there?

[Laughter]

C. Finn: We say that in the book somewhere. [Laughter] Bruno can find that page. [Laughter] And I've been to some perfectly appalling public schools, and I've been to some pretty disreputable private schools. Actually the aegis here is not the guarantee of a fine school or a dreadful school in either direction. And the fact that a school is called a charter school doesn't mean it's a good school. It means it's an independent school that is not run by a system, and it has the opportunity to make its own mistakes and maybe achieve its own successes.

The whole country is waiting for definitive national outcomes results on things like test scores from charter schools. Those data do not exist. You can keep looking for them, but they just don't exist yet. There is a lot of state data on charter school outcomes, state by state, compared to the regular schools of a state, the regular public schools of a state, charter schools of a state. It's mixed in terms of how the kids are doing. It's a mixed review at this point.

I would add that most of these schools are quite new. Many of them are in their first or second or third year of operation. And I think it's premature to expect definitive results in terms of student achievement from many of them as yet.

It's also interesting to note, precisely because instead of creaming off the ablest and most fortunate kids, charter schools are being attended in so many cases by seriously disadvantaged and behind-the-8-ball kids who gravitate to them because of previous failure. The level playing field argument goes in an interesting reverse direction in America. The charter operators say, gosh, we are ready to be compared, but we want a level playing field. Our kids started much farther behind the kids in the regular public schools that we need to be measured by value addeds rather than by some kind of absolute comparative norm.

Finally, charter schools will be judged by three things. They'll be judged by whether anyone wants to attend them. They'll be judged by whether they do an acceptable job of student achievement, like value added, typically on a state test. I mean, frankly, that's going to be the main metric for most of them. And, thirdly, whether they actually deliver what in their own unique charter they said they were going to do. And that varies quite a lot by school. I mean some of them are going to make musicians. Some of them are going to make good citizens. Some of them are going to make concerned city-dwellers. Some of them are going to make law-abiding young people. They have various different missions that they say they're going to do in their charter, and if they don't do it they have no business to claim a right to continue. Some of them have excessively ambitious ambitions, by the way, and promise things that they have no prayer of delivering, at least not in a five-year charter. But they'll have to learn from that experience as well.

T. Loveless: Other comments from the panel on that question?

In the back?

Question: [Inaudible]

[Laughter]

H. Ladd: Whether they should be kept but how —

Question: [Inaudible] — There is more and more opportunity to do so by law. You mess up 10 percent and no more, or are you just saying that you want that to be the path that charters can take rather than jumping to a systemic solution, such as Checker--?

H. Ladd: I don't know what the appropriate number is, you know, whether it's 10 percent, 20 percent, 5 percent, or whatever. There are two pieces of evidence from New Zealand, though, that lead us to this conclusion that they will be most effective if they're kept on the fringe. And if supporters of charter schools read our book, we're hoping then they will turn to legislators and try to keep charters on the fringe. And these two points are as follows.

One of them has to do with innovation. If you really want charter schools to be innovative and to be given the flexibility to be innovative and to do different things, our view is that state legislators will let schools do that, but only to a point. When the state realized that schools are doing — I mean that there are huge numbers of schools all doing their own thing, we think the state is going to be feel threatened by that and the response would be to impose more state controls on these schools. And we have evidence of that from New Zealand. I mean New Zealand started out with this notion that every school would have its own unique charter. In fact, they use the word. All the schools in New Zealand do have their own charters. But the notion initially was each school would develop a charter that was really quite different from the other charters, and this would be the contract with the government, and they would be evaluated or held accountable to that charter.

We, in the fourth chapter of our book, follow through the process that occurred very early on within the New Zealand reforms in which the state, given it was funding education, given that education was a compulsory service, the state stepped back from that and said, hey, wait a sec. There's a reason we're funding schools; there's a reason they're compulsory; there are national goals that we care about here. And so these charters, which initially had been envisioned as having a lot of variation, very soon became quite similar. And the reason they were similar is that the state stepped in and said, look, all of these particular elements related to national goals and guidelines have to be in your charter.

So, you know, given Ted and I are in favor of some innovation and experimentation, we think that that goal is best achieved within the context of a political environment in which education is compulsory, if they remain at the fringe.

Let me just mention one other measure, issue having to do with fairness and access. Most supporters of charter schools, I think, would support the notion that if the charter school is oversubscribed that access to that school should be determined by some sort of random lottery. Bryan has stated that very clearly in some of his work on charters, and to him I think that distinguishes charters from the whole voucher school movement where private schools presumably would be free to choose who they wanted to take.

How does this play out? Well, our view, and we state this quite clearly in the book, is if you have a few charters working on the fringe, and if the school is oversubscribed, it is fine to require that that school select students by some sort of random lottery process, because if a student doesn't get into that school, that student always has the option of going back to the regular public school system.

But imagine what happens when you have charter schools being norm, and you've got lots of schools out there, lots of students trying to get into these schools, lots of those schools being quite popular. How does this whole system of choice by lottery work? We argue that it doesn't work very well at all. I mean, you can play this all out, and we do try to play it out in the book to say what happens. Now, New Zealand didn't play it out. They initially thought they were going to have all selection by lottery. But that only lasted for a year. And then they shifted to a system in which the oversubscribed schools had the authority to basically select the sorts of students that they wanted there. The schools were given the authority to set their own enrollment schemes, and that gave them authority to choose. Now, you may not like that, but it was a practical solution, consistent with some of the views of the charter school mind-set, which is if schools are trying to do something unique, they ought to be able to choose the students that are in that school so that they can pursue those particular goals.

We document in the book how in a very short period of time between '93 and '97 the proportion of schools, and also of students in such schools, that ended up with these enrollment schemes just increased very rapidly, especially in the rapidly growing area of Auckland. So we think this whole question of how students would be selected in schools is just a much more serious problem when you have these schools of choice being the norm rather than when they are on the fringe of the system.

T. Loveless: I think Bruno wanted to respond to that as well.

B. Manno: Well, not so much this lottery issue, but the prior issue. And embedded in it is a question I want to ask directly and maybe give our cut on it, which is how does the system respond to this thing called "charter," because that's really, I think, the sort of fundamental question that several folks are asking.

In a couple of chapters we try to lay this out, and we basically, for sake of simplicity, talk about four responses that the system had to charters. And by "system," you can think about the district or this is also at the state level and at various different levels in between. But there's this sort of first-response, "stop them cold," which is to say, you know, make sure the state doesn't pass a law, or if the district is the only one that can charter, make sure there are no charters that come to life. So that's sort of the first reaction of the system. Or I shouldn't say first, but that is a reaction to the system, and in many places that is the first and only reaction.

But if the law allows, say, two different chartering authorities or several different chartering authorities, the district can say no, but another chartering authority may say yes, in which case the response of the district might be to begin to try to in some manner, shape or form control what's happening, so reregulate the charter in some manner, shape or form. Or that can happen at the state level too, so that you have this sort of immediate reaction, "stop them cold." The second one is keep them few and weak or try to reregulate them.

There's also a third reaction that gets more into this sort of competitive mode, which is fight back. All right, they're here. What are we going to do about it? You have this unfolding here in D.C. now with this charter, District charter school that — District charter that wants to convert to charter status, and you have the superintendent saying, no, you can't do that; we're going to keep the building from you, and we're going to put a math-science school in that building. That's sort of fighting back. Now, there're high cost and low cost ways of doing it. Low cost ways might involve advertising, as a lot of places are doing, letters to parents. High cost ways are start a new program. That's another kind of response. When we think about the sort of market mechanism, we often stop there though at the sort of competitive response.

There's also a fourth response, which gets into a couple of points I think Ted made specifically, the sort of let's begin to think about how we can use the charter strategy to our advantage here in this district. And that actually has two possible responses. There's the sort of R&D model, which I think Ted talked about specifically. All right, the district, as it has done in San Carlos or a number of other places across the country, San Carlos, California. The district actually creates a charter school, because it thinks it can learn something from that, and then tries to transfer what is going on in that school to other schools in the district. Now, there's a long history of that going on in education, and it works sometimes; it doesn't work others. But that's another sort of response.

Finally, there's a sort of response that says, okay, let's actually use the charter mechanism as a way for the district to accomplish something that it can't do under any other circumstance. So in Chicago you have the district having the option to do a dozen or 15 charters, and they've used up all the charters that they can and see that as a kind of district strategy for doing stuff that it can't do under the ordinary mechanisms. In some very small districts, admittedly small, we have a growing number of small districts that are actually becoming charter districts. So you know that was sort of a question embedded in a lot of the conversation. But districts are responding in a variety of ways, depending upon the circumstances that they find themselves in.

T. Loveless: Is Arizona still the most wide open state?

B. Manno: Yes.

T. Loveless: There're over 200, right, 212 or something?

C. Finn: Well, I think 400.

T. Loveless: Another 200 just this last week were set up.

[Laughter]

Question: My name is David Hartnagle, and I'm an undergraduate of Tufts University. I live in Ohio, and I read in The Cleveland Plain Dealer —

T. Loveless: A good state.

Question: What?

T. Loveless: A good state.

Question: Oh, thank you.

One of the articles in The Cleveland Plain Dealer discussed the problem of charter schools. I know that you alluded to this earlier, about charter schools reimposing racial segregation, and they looked at a number of charter schools throughout Ohio that were largely African-American, largely Hispanic, and what-not. I was just curious of the overall views of the panel. And also, what measures [Inaudible] —

B. Hassel: I think — let me make one comment here, which is that the use of language, like "impose segregation" — "impose segregation" — I think is very important not to be employed in this setting, because it's very important to remember that charter schools are chosen by the parents who send their kids there. And so there are no cases that I know of where you can say that a charter school's been set up; it's largely African American, where it has been imposed on a community. So I think that's very important.

And the second difference between segregation of the past is that in theory charter schools are going to be held accountable for some kind of result. They're going to be — they're going to have to meet certain targets for performance in order to stay open, whereas segregated schools of the past were the inferior schools in town. They were the ones that got less resources and no attention to improvement.

And so that if you've got choice and you have accountability — and I am not saying you also do have both of those things — it's a very different kind of situation from a segregation era school, say in North Carolina, where parents were required to send their children to inferior all-African-American schools. And I think that's the test we have to continue to apply around the country. If we see schools that are being chosen by large proportions of minority students, we have to ask "Is it a choice situation, and is there accountability for results?" And, if it is, it's hard for me sitting here to say this school should not be allowed to open; it should not be allowed to exist because of those two factors.

C. Finn: It's the oddest use of the word "segregated." I mean, if you go to an African-American church, where everybody in the congregation is black, are you going to a segregated institution? Certainly not in the traditional sense that the state was, compulsorily and against the wishes of people, forcing them to be separated. Are you going to a racially homogeneous institution that got that way through purely voluntarily means because people wanted it to be there? I don't guess I think of that as segregated.

H. Ladd: I should say something in the New Zealand context. You have to be a bit careful here, because, you know, there are some real differences between the charter schools and the newly-formed charter schools in the U.S. But I think we have to be careful about sort of accepting this notion if we have a choice system and we end up as a result of that choice system with schools that are more segregated than they would otherwise have been and thinking that that's fine. New Zealand has a choice system. But choice, in practice, isn't as available to everybody. There are some income issues involved. Most of the money for the schools does come from the government, but the schools are allowed to put on, quote, "voluntary fees" and "activity fees," and whatever, and in some cases those fees are quite large in the schools serving the more advantaged students. Transportation is a cost as choice plays out. And then these enrollment schemes play a role, because if the schools serving the more advantaged students are oversubscribed and popular, they impose enrollment schemes. That means the other students who can't get into those schools are then forced to choose among a smaller group of schools. So, in principle, you have choice, and it's complete. You know, you can go to any school that you want to. But there are all sorts of limited related to that.

And let me just add the final point which I alluded to in my talk. If in addition to that parents do use the mix of students in a school, the socioeconomic mix of students, in part as their measure for school quality, you're going to exacerbate some of these effects. And we some pretty clear evidence of that in New Zealand. You might ask, well, is that rational for parents to use the mix of students in the school as a proxy for school quality? And we argue that while it may not be rational for the system as a whole, it does make sense in many cases for parents to think that way. We have evidence, and we provide evidence of this in the book, that schools serving the more advantaged students get the higher quality teachers. Teachers gravitate to those schools. It's hard for the schools at the bottom to attract the high quality teachers. And there're a number of arguments like that, such as positive peer effects that we don't know a lot about, but that do suggest that it may be rational for parents to try to move their parents up this rank in schools where the ranking is based on ethnic and socioeconomic differences.

So our caution, and, you know, our subtitle of our books is, "A Cautionary Tale" — you've got to be cautious of these sorts of arguments that say choice solves all problems and that the outcomes of the choice system are ones that we can live with from an ethical or other perspective.

E. Fiske: I was visiting one school outside of Wellington one evening, and it happened to be the evening of the day of what's known there as the lead tables were published. The New Zealand type of system where they rank schools by deciles for purposes of distributing additional state aid on a per-pupil basis to the poorer schools. It tends to be a quite good system. But it means schools ranked from the tenths down to the first decile tend to be the wealthiest, which is essentially a socioeconomic status of ranking with ethnic components. And in the lead tables that were published in the newspapers, it also gave results of test scores of various kinds. And it was interesting. Somebody brought out the paper and these parents were talking about how they might make their school more attractive to other students, additional students. And so they were looking at other schools. And it was interesting. They immediately went to the decile ranking. They weren't even looking at test score results or any kind of a value added — much less any kind of a value-added criterion. It simply was what's the socioeconomic status of the students who go there. And that became the surrogate for school quality.

In some of the analysis in the book, Sunny looked at demographic data. And we were lucky because New Zealand has a census every five years. So in 1991, the year that parental choice went in, they had a census, and then five years later they had another one. And so Sunny looked at the enrollment patterns in 1991 and the demographic situation, and then projected what the enrollment patterns ought to look like five years later based simply on demographics, huge population increases in Auckland, for instance, and then looked at the actual enrollment pattern. And what we document is that there was a substantial polarization of enrollment patterns by ethnicity during that five years, which has to be attributed, to a large extent, to the freedom — to the parental choice system.

I might say one comment about Mike's point. The point is not to keep charters on the fringe. I mean, the point is to preserve the values that charters have to offer. And what we observed was over a period of time, and it didn't take very long, the central funding and accountability forces really exercise their concept of what schools ought to be doing on the school. In this case, on the part of a government, of a Conservative national Party government that was very much anti-government, so presumably in favor of this sort of thing. So our point would be to try to preserve the virtues of the charter schools and just warn that if you make this the norm there are going to be huge other pressures which are going to complicate the job.

T. Loveless: Bruno?

I want to add both the — reportedly, the Center for Education Reform and the Federal Report, they're both available on line at their respective websites and have extensive demographic data on charter schools. The charter schools, nationally, the kids who attend them look about like America's kids roughly in terms of FDS and the racial background as well.

B. Manno: Tom, since you — that was a point I was going to make, so I'll just make the point specifically. If you look at the fourth year report, you find out that 70 percent of the charter schools are not at all distinct from their own district. I mean they basically enroll the same kind of kids that the district schools enroll. So this is an issue, but a very, very, very focused one on a few schools, North Carolina and Louisiana being the places where all the controversy is.

T. Loveless: In the back?

Question: I'm Diane Boucher [Inaudible] Civil Rights. I want to follow up on Anne's question much earlier about how you measure success on the part of schools. And Checker, I thought I heard you indicate — I'll read your book. But —

C. Finn: Of course.

Question: [Inaudible]

C. Finn: Well, if you mean testing standards, most states treat their charter schools for testing purposes like they treat their regular public schools. Whatever tests the regular public schools take, the charter schools take under the same rules. So it's whatever grade levels and rules of exclusion of kids, and things like that.

What you got are a number of states now with state level data that is accessible. There's pretty interesting comparative data now from Colorado on charters versus regular schools in Colorado. There's some from Texas; there's some from Arizona. Some of these state tests, of course, as you know, are just kicking in. Massachusetts had baseline data from its new MCAS [ph] for charter schools as well as regular schools. But that was the baseline data without any school facts, because that was just where the kids were when the test was given the first time. And until you get at least one more round of test scores, you don't know whether they're gaining a year's worth in their year in the school.

And charters, to the extent that they serve eccentric populations, are sometimes given the same — are cut the same slack that other alternative schools are cut. In the very first crop of Texas charter schools, for example, a number of them, because they were set up to serve drop-outs or other kids who were, you know, troubled kids, things like that, they opted into Texas's accountability system under the so-called alternative assessment system, or alternative accountability system, which is a different set of measures than the system that was used for the conventional public schools and conventional charter schools of Texas. There're all sorts of wrinkles here.

There's emerging state-specific data. But my main point was there isn't any ability to make a national generalization about charter school student achievement.

T. Loveless: Yes?

Question: Gail Tanic, Christian Science Monitor. I have two issues for the whole panel. One, I wonder if we're defining innovation in the right way. In a lot of these broad studies ...

[Balance of question inaudible]

E. Fiske: Yeah. And we observed on that point in New Zealand — and this has more to do with self-governance, the operational autonomy that the schools got; it's not really a parental choice issue. But the number of hours the teachers and principals work increased, because schools are now doing a lot of things for themselves that previously were done by the central support structure. The theory was that private entrepreneurs, essentially people who had lost their jobs because the old department had been abolished, could form organizations to support the schools. For whatever reason, that didn't happen a lot. There has been some evidence that teachers are leaving the profession more because of burn-out. And so this is definitely an issue in New Zealand.

H. Ladd: Just to follow up on that. We did provide data in the book, too, about teacher morale, and you can imagine teacher morale went down sort of early on as these reforms came in, because there was a lot of turbulence at that time. But we have survey data, at least for elementary schools over time, so from 1989 up to 1997 in the book. And teacher morale ended up — it is still quite low in a lot of these schools, just because of additional work and the things that are forced upon them.

And then one final point. We tell some stories of some incredible principals in New Zealand. And principals are key to all of this self-governing schools, and they're the leaders. And we provide some examples of some very energetic, creative principals. But as you read through these short descriptions of these principals, I think you will be exhausted at the end and you will ask the question: will they be there two years from now? And our guess is no. And that's now becoming a problem in New Zealand, sort of just attracting enough teachers — I'm sorry, principals — to run these schools in the way that self-governing demand.

E. Fiske: I think your point about one reason they're successful is that people want to be there is a really important one. If you are looking to make an analogy between New Zealand and the U.S., New Zealand essentially has a system of conversion charters. Everybody has to be a charter school, whether they want to or not. And you can't build a system around, you know, charismatic principals, because there aren't enough of them to go around in any system.

The issue of forcing everybody into a situation where they have to be innovative is probably pushing your luck. And this is another reason that we argue that if you try to make it the norm, you're going to destroy a lot of the contributions they have to make.

Another side-effect that we also noted, and this does grow out of the competitive situation, was the loss of — a decline in professional collegiality. Quite a few principals said to me that they had simply--they had good ideas; they worked as willing as they were in the past to share them with their colleagues, because they are going to use them to try to attract students to the school. Or they said if we're going to do it, we're going to charge; we'll have a seminar and get paid for it. And to some extent to a lesser extent teachers are the same way. So there was a distinct dampening on professional collegiality as part of the culture of competition.

T. Loveless: Did you look at — did you happen to look at collegiality within buildings? Would the competition increase cohesiveness maybe within buildings?

H. Ladd: We've got little evidence on that from some of these surveys of elementary schools, and it's mixed.

B. Manno: A couple of points to Gail's question. Your second one, about burn-out. Actually, we believe that that issue is one of great issues facing charter schools. In the second to last chapter, we talk about the eight issues facing charter schools, and that's one of the supply-side issues. It's not just a question of schools, but then who's going to staff them at these schools. So it is a major, major issue that needs to be thought through as one thinks through the future of charter schools.

There's some interesting data actually in the NEA survey on that question, the survey that was done by Julia Kopic [ph] and a couple of her colleagues, where they talked to teachers in charter schools and kind of got their reaction to what's going on. So that's at least a source for some concrete information. That's the one issue.

To go to your first issue, which was about innovation, there're a couple of ways to cut that issue. One is to talk about what we mentioned briefly in passing, that is — and I think it's what you were saying — there is a sense in which charter is an institutional innovation. That is to say, you know, these schools are independent; they're autonomous; they're self-governing; they're schools of choice. That's the sort of institutional innovation that they embody. When you get down to sort of the pedagogical level or what happens inside the school building, there are a couple of ways to look at innovation there. There is some truth to the argument that says, well, these schools are doing much of what goes on in most other schools, so they are not being, quote, "most innovative."

But you need to think of this question of innovation in context. For example, just to make up a situation, suppose you're in a district or in a neighborhood or in a part of a district where most of the schools, or all of the schools, are progressive. To have a core knowledge school could, in fact, be a real innovation, though, in fact, what happens in that school might be very traditional. In fact, a study that was done in Massachusetts of innovation in charter schools calls that kind of thing "retrovations."

So this question of innovation has a number of different dimensions to it. Just because something isn't being done differently doesn't mean that there isn't some kind of innovation going on. And in fact, just to sort of end this discussion, Peter Drucker has an interesting definition of what innovation is, and innovation is any new practice that improves results. That's a kind of interesting perspective on innovation that gets to the sort of contextual issue, I think.

T. Loveless: This problem, too, of just burn-out and the enormous amounts of energy it takes to get any educational reform off the ground has always been a problem in education. In all the great educational history that people have written, that is the main story. These things come and go, because they require so much energy and they're very hard to pass down to the next generation of people that come in and institutionalize whatever the reform is.

C. Finn: On the other hand, Secretary Riley proposed the other day that teaching should become a year-round profession. I think in charter schools, for the most part, it already is. They are what I think in modern parlance is called 24-7 institutions. You are never off duty if you're working in a charter school. Some people find that stimulating, exhilarating, and others just plain find it exhausting.

E. Fiske: One other factor we observed in New Zealand is when you have a competitive environment the premium is in building enrollment. There is very little incentive in the New Zealand situation to go for niche markets. Everybody was moving toward the center in order to attract the greatest number of students. Partly it had to do with the rules of engagement, because once you got up to capacity you could then pretty much control who was coming to your school and who didn't. So this force to go for the middle — I mean, there's good economic analyses for this — it was one that we observed very distinctly in New Zealand.

T. Loveless: Bryan?

B. Hassel: And that's a function of the way New Zealand went about this in the sense of converting all the existing schools to charter schools or charter-like schools and saying that each building was a single school, right? Is that the way it always works in New Zealand?

E. Fiske: Yes, yes.

B. Hassel: Whereas in most charter programs in the United States, the school gets to set its enrollment, and you don't in fact see schools trying to — all schools trying to maximize enrollment. Some schools are trying to get big numbers, but other schools are trying to stay small. You see a lot of charter schools that are tiny, and that's because they have the flexibility there. And I think if you went to a system where you converted a lot of regular U.S. public schools to charter-like schools, you wouldn't necessarily want to say each building becomes a school. You might want to allow more flexibility so that a single — a building is just a building, and within it there might be one school or two or three; there might be a half a school because there's another site across the street. I think the building-school connection would need to be stripped in order to avoid this kind of perverse —

E. Fiske: Yeah. Yeah, you're absolutely right, and there are some conditions. I think the lesson that we draw from this is when you go into this sort of a situation you are designing it, you have to think through what are the safeguards you need to build in. One we would argue would be you don't simply let schools be the only determinant of whom they accept if you're operating in a public school system. Another safeguard would be the realization — and Sunny said at the end of her introductory remarks that whatever the benefits of these charters and competition and all this, they're still not, in and of themselves, going to solve the problems of the troubled urban schools, and you have to be aware of that and build some safeguards in when you design the system.

Question: My name is Doug Triant [sp], and I'm a teacher for the Auckland public schools. I'm on vacation leave. [Laughter] I just wanted to follow up on the point that Mrs. Ladd was making about the charter schools losing dynamic leaders and the entrepreneurs [Inaudible] charter school, and that there was, I guess, a lack of people in New Zealand to run charter schools [Inaudible].

I just want to ask, if the country were to increase the number of charter, there would be a great need for a lot of entrepreneurs, a lot of energy, innovative ideas, and, you know, the time to make the idea work. And I just wanted to ask whether you think it would be possible to have some many people who wanted to found charter schools and were capable of doing it, because I think that everyone will want to start up webpage, dot-com companies. [Inaudible] for people to start a charter school. And, you know, how could we know that they are capable educators and they could pull it off?

B. Hassel: Let me answer. One way to say that no matter what we do in this country about education, we need a great supply of energetic principals. It doesn't — I can't think of a single reform idea on the table that doesn't require that. So we need to be — that needs to be on the top of the agenda, whether it's charter schools or any other reform that we propose.

But I think it's interesting to look at charter schools to see how they do attract the kind of leaders that they need. And since they have a lot of flexibility they are experimenting with how to attract people. And one thing of course they do that's different is they open up that position to people who aren't traditionally certified as principals. Another thing that you see that's interesting is dividing the responsibility of leadership between a kind of instructional leader and a business leader. A lot of charter schools have a paired leadership structure so that those functions can be separated, and that's very interesting.

And I think another thing that you see is in many states emerging leadership training programs for people that want to be leaders of charter schools or innovative public schools. And I think a market for that would be created if there are more opportunities for that kind of leadership. So there are interesting things going on, but I think it's one of the number one challenges not just for charter schools but for any kind of reform.

C. Finn: We've got a classic chicken-egg problem here. If the regular system looks for either building managers or bureaucrats to be principals, it's not going to produce a lot of risk-takers and innovators and entrepreneurs and pioneers. The charter opportunity does invite risk-takers and innovators and pioneers and entrepreneurs. There is no doubt about it. I don't think we have any clue yet in this country what the limit on that might be in education. We know it's more than the number of charter schools today because in every state that has a cap on how many charter schools there can be, there are more people wanting to start them than are allowed to start them. So we know that the potential supply exceeds the currently allowable supply. By how much it exceeds it? I don't think there is any way of figuring that out yet.

T. Loveless: Last question. Mike?

Question: Yes, I wanted to get some more information. Checker, as you know [Inaudible] the "Full Monty" scenario, which says that charters are a stalking horse. And in the book, your argument about that basically says, well, no, because all the people like us who write books are on all sides of this issue." And I am wondering, is there any evidence out there, are there any actual instances where the issue has arisen where you could report as to what the actual effect of the charter policy versus [Inaudible] — ?

C. Finn: It is on page 167. The one thing we can report with certainty is that a number of states' charter laws have been alternatives to voucher laws, and that the politics that led to the charter law being passed was a political scenario in which people said, yikes, we don't want vouchers but we have to do something. Maybe we can try charters. And you can go down state after state after state and go through legislative dramas in which something like that played itself out. And had there been no voucher proposal on the table there very likely wouldn't have been a charter law enacted, or at least not one of any significance.

That's what leads some voucher proponents to dislike charters, because just as any revolutionary can't stand a reformer for fear it will fend off the revolution by palliating the masses, a major sort of single-minded voucher person says, geez, the charter is going to sop up all the energy for change, all the appetite, all the discontent, and it will slow down the movement toward vouchers which we would otherwise have provided we keep everyone trapped in those miserable traditional schools with no exit.

No, you can't show that having happened anywhere yet. On the other hand, there are some states that have come close and not enacted voucher laws in the last few years that possibly might if the charter option hadn't been there as a kind of middle ground.

T. Loveless: Well, let me thank you all for coming, and let's thank also our panel for a great discussion. [Applause]

[END OF EVENT]