Michigan education officials and Gov. Jennifer Granholm were happy to announce improved scores on state assessment tests this year, but there’s another number they should be looking at. In a new ranking developed by the Cato Institute in Washington, D.C., Michigan received a score of only 17 out of 100. Low as it is, the number is above the national average.

The Cato Education Market Index, released last month, rates the states on the ease with which parents can choose between public and private schools, the freedom schools have to set their own policies, and the extent of competition between schools to attract and retain students.

Michigan is hardly a competitive marketplace in education, but one bright spot is that it has a larger than average number of charter schools. Roughly 5 percent of Michigan students are enrolled in charter schools, compared to about 1 percent nationwide. Another plus factor in Michigan’s score is that the state’s public schools offer marginally more parental choice than those of other states. School choice programs allow parents to cross district lines, and enrollment figures from Detroit show that’s just what those parents are doing. Thousands of children assigned to the Detroit Public Schools district now attend nearby charter schools or public schools in other districts.

Michigan’s private education sector adds more weight on the side of educational freedom. Private schools in this state are not required, for example, to hire government-certified teachers – a credential that has been shown to do little or no good in raising student achievement. Unlike their public counterparts, whose teachers must obtain degrees from state-accredited colleges of education, private schools can decide for themselves who is best for the job.

But only 9 percent of Michigan students attend private schools. Most are enrolled in traditional public schools, where there is little incentive for innovation or improvement.

Here’s where Michigan loses points: The state has limited the number of charter schools that can be authorized by universities to 150, curtailing future growth, even though many existing schools have waiting lists. And, decisively, the state allocates approximately $7,000 per pupil a year for children’s education but insists that this only be used in government-run schools, ensuring that independent schooling is beyond the financial reach of many low- and middle-income families.

As many parents are finding out, Michigan simply doesn’t have a competitive, parent-driven marketplace in education.

If parental choice had no bearing on student achievement, this wouldn’t be a problem. But it does. The reason we developed the Cato Education Market Index is that competition and choice are associated with a range of important educational and social outcomes. International research shows that private schools forced to compete for students are more academically effective and less costly to operate than state-run schools. Our own research shows that higher ratings on our Cato Education Market Index are associated with higher academic achievement and higher graduation rates – even after controlling for differences in student and family characteristics between the states.

In school systems that have a monopoly on education, there is little incentive for teachers or administrators to innovate or to develop and disseminate best practices. In contrast, school managers in a competitive market have a powerful economic incentive to identify and nurture brilliant teachers.

Perhaps most importantly, free education markets in Michigan would not pit parent against parent in conflicts over school issues. Whether the school should have a Christmas tree, whether students should say the pledge of allegiance — all these decisions are much less controversial when parents freely choose the school they find most appropriate for their children. A recent Cato Institute study documents nearly 150 values conflicts caused by public schools in the 2005-06 school year alone.

Michigan could bring educational freedom to all of its families by implementing a system of universal education tax credits like the one advocated by the Mackinac Center for Public Policy. That would do a lot more for citizens than simply raising its score on our Education Market Index.

Andrew J. Coulson is director of education policy for the Cato Institute, and author of "The Cato Education Market Index." He blogs at
www.Cato-at-Liberty.org.