Odd Man Out: How Government Supports Private Sector Innovation, Except in Education

For too long, the federal government has babied education,
shielding it from the wholesome effects of private-sector competition. In fact,
John Bailey explains in this AEI brief, if American education is going to
improve, a sizeable portion of the funds showered on public and nonprofit education
providers should be rerouted to
for-profit businesses. American education should be an “ecosystem of various
providers and consumers” and should be supported by private-sector-friendly
policies like regulation waivers and results-based incentives. To articulate
this point, Bailey draws on examples from the energy, space, and healthcare
sectors: From turning over the design and construction of space shuttles to
paying healthcare providers for switching to electronic records, Bailey
showcases smooth-operating public-private partnerships—and casts education as far
behind the curve. But his analogies aren’t perfect. Most concerning is the
specter of Solyndra and similar examples of waste that lurk in various
pages of the paper, surfacing periodically as uncomfortable reminders that the
government often struggles to regulate and incentivize without skewing or
perverting markets. So while Bailey’s argument is strong and his examples
interesting, the devil will be in the details: Check back with AEI in upcoming
months as it adds further installments in the Private Enterprise in American Education report series.

John Bailey, “Odd
Man Out: How Government Supports Private Sector Innovation, Except in Education
(Washington, D.C.: American Enterprise Institute, October 2011).