Posted at The Lighthouse - Volume 13, Issue 38

If education is a public good, then it is one that, by its nature, governments tend to provide poorly. So argues Jane S. Shaw, president of the John William Pope Center for Higher Education Policy. In an article published last fall in The Independent Review, Shaw explains that the same reasoning that leads many economists to believe that education would be underfunded if left entirely to the voluntary sector, also helps explain why the quality of government schooling is often deficient.

The issue is one of spillover benefits—“positive externalities,” in economics jargon. The common argument is that education helps people indirectly, such as adults who have no school-age children but who would benefit from having well-educated kids in their community instead of uneducated dropouts who might become delinquents or a net drain on the public purse. But those adults would derive such benefits without having to donate money to help educate other people’s kids. This is the public-goods case for funding the schools coercively, via property taxes.

Shaw takes this argument one step further. Quality assurance in the government provision of education (or any other government-provided service) also creates uncompensated spillover benefits, she notes. Therefore, the quality of public schooling tends to be deficient, since most people have weak incentives to help ensure that government schools provide a high-quality education. In other words, if education is a public good, then it is one that governments tend to provide ineptly. Shaw’s compelling article applies this analysis to K-12 schooling and higher education. Highly recommended!