While neither the charter schools nor public "schools-of-choice" take fullest possible advantage of the opportunities for improvement offered by incentives-based reforms, they are having a substantial impact on the public school system.  Contrary to the claims of those who oppose competition in education, there is very little evidence to suggest that competition has harmed the cause of better education for our children.

Although the purpose of incentive-based reforms is to improve the overall quality of education by forcing schools to compete for students, a potentially negative effect of competition is that schools and districts may encounter financial problems or even go out of business.  Is this an acceptable outcome of school choice and competition?

To answer this question it is beneficial to observe the private sector of our economy, where choice and competition are the norm rather than the exception.  In this arena, businesses fail every day for a variety of reasons.  Rarely, however, do they go out of business because they attract too many customers.  Most will close because they do not provide a desired product or because other suppliers provide a superior service.  Of course other factors may lead to the closure of a business, but the key is that competition offers consumers choices.  Choices force a business to please customers or risk losing them to someone who will.  As a result, it is ultimately the consumer who benefits from competition among multiple suppliers of a service or product.

In a competitive education marketplace, behavior of consumers and suppliers will be the same as in other markets, with standards perhaps being even higher due to the singular importance most people place on education.  Schools that provide high-quality education for children will attract and retain students, while schools that do not will likely lose students.  In such an environment, it is reasonable to expect that schools that fail to provide an education (service) that students and parents (consumers) want or value will go out of business.  Other schools may close because their service is inferior to that which is provided by other suppliers of education.

In the assignment system, the supplier is sovereign.  With school choice, the consumer is sovereign. Allowing parents to choose how and where their children are educated, while not a panacea, nevertheless will force schools to treat families like customers to be served rather than as a captive audience.  No longer will children be trapped in underperforming schools.  Instead, they will have increased opportunities to find a better or safer school that meets their individual needs.

The evidence is clear:  School choice and competition put pressure on poorly performing districts to improve their academic performance.  Students in failing districts already have been largely "left behind" by people who can afford to choose between better government schools and private schools.  Choice programs are providing alternative school options to parents who otherwise could not afford them, while forcing districts to respond to student needs and parental desires.

Traditional government schools not only can survive competition; they also can thrive in it.  Government schools have considerable advantages, including higher levels of taxpayer support, taxpayer-provided facilities, and funding for transportation and other services.  In a more competitive environment, schools of all types will have strong incentives to provide parents and students with what they want and need.  No longer will schools be able to provide substandard service to children who cannot escape.  Increased competition will force all schools to improve for all children.