School Choice or Best Systems_ What Improves Education_ - Margaret C. Wang [42]
Caroline Hoxby analyzed data from the National Education Longitudinal Study, which contained a greater number and range of metropolitan and district sizes than those in Kentucky.20 She found large effects of interdistrict competition: with a 1 percent increase in the Herfindahl Index of interdistrict choice, available 8th-grade reading scores, 10th-grade math scores, and 12th-grade reading scores increased between 3 and 6 percentile points.21
In 2005 Jay Greene and Marcus Winters22 conducted a similar state-level analysis. They also found a substantial and significant negative effect of district size on graduation rates and no effect of per student expenditures. They concluded that lack of competition in states with generally large districts—Florida, Hawaii, and Nevada—reduces student attainment.
For more than a half century, policymakers have unfortunately increased the size of school districts, often in a fruitless attempt to achieve “economies of scale.”23 In the 1937-38 school year, the total number of traditional public school districts was about 119,000. The number of districts dwindled to fewer than 15,000 by 2001-02.24 The result, as the research clearly shows, has been less competition between school districts, which is associated with lower levels of student achievement.
Some states still continue to pursue the counterproductive consolidation of small school districts into larger ones. For example, Arkansas recently consolidated its 308 school districts into 254 larger ones. Other states, such as Illinois and Arizona, have recently considered consolidating school districts that they consider particularly small. Several studies indicate, if anything, that breaking up the largest districts such as Los Angeles would be a wiser policy.25
Decentralized Montana exemplifies the positive results achieved with a small state funding ratio and a large number of tiny school districts.26 Montana’s student achievement results have consistently ranked at or near the top of U.S. state achievement rankings, and its school districts have as few as a few hundred students.27 In a state with mostly small school districts, the school board members, administrators, and teachers often personally know students, their siblings, and their parents. The parents and other citizens also tend to know one another and their elected board members, and it is worthwhile for them to talk with each other about school problems. It is rational for them to inform themselves about school issues since their votes count heavily in school board elections. None of this tends to be true of large school districts.
Organization Size and Bureaucracy
As the number of school districts has fallen, the number of students per district has risen by a factor of more than 10, from 214 to 2,683.28 Schools and school systems became larger, and a few gigantic big-city school districts came to enroll several times more students than the number of citizens in some western states. There are good reasons to suppose, and data to confirm, that larger and more bureaucratic school districts are less productive because of inefficiencies and dysfunction that would not exist in a marketplace composed of smaller competing institutions.
The optimal size of an organization depends on the ends to be achieved. Large organizations, particularly manufacturing firms, may become efficient by searching for the single best choice and reducing unit costs by large-scale manufacturing, purchasing, or sale (“economies of scale”). Larger size, however, makes it more likely that organizations will have internal and external communication problems that make it difficult to satisfy customers and to achieve the organization’s nominal mission. Those problems can be solved, but not without cost.
Research by psychologists and sociologists shows that organizations as diverse as business firms and psychiatric units of hospitals face difficult problems in achieving their stated ends when they grow large.29 Consider