Combining Market and bureaucratic Control in Education: an answer to market and bureaucratic failure?

This article focuses on institutional arrangements in education across Western countries. It essentially deals with the recent trend towards extended school choice presuniably aimed at creating a competitive environment for schools and teachers. For many years the functioning of educational systems, in particular the way schools were institutionally co-ordinated, was not perceived as fundamental to economic analysis. But more and more economists now believe that the institutional setting in which schools are embedded their governance structure is decisive regarding both efficiency and equity. In this respect, it is worth noting that most Western countries rely essentially on bureaucratic control to co-ordinate their educational sector. Yet some of them, such as Belgium, The Netherlands, England and Wales, New Zealand and Sweden incorporate market-oriented mechanisms at the heart of their institutional arrangements. The main focus of this article is to analyse the origins, as well as the economic relevance, of this in some cases relatively recent-tendency to mix bureaucratic and market approaches to education.