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Tuesday, November 11, 2008

Susan Hogarth's Faith in Markets

Susan, the basis of the statement you question includes the 17-item list preceding it, and the grocery store analogy following it.  Who pays the piper indeed calls the tune, and both vouchers and tax credits lets parents decide which piper gets paid.  Right now, parents can direct their funds to another piper only by selling their house and buying one in a different school district. That doesn't give the piper much incentive to play the requested tunes.

Yes, market competition correlates very highly with increased product quality.  It's interesting that you have such faith about what market competition will accomplish in the fantasy -- I mean, counterfactual -- world of zero government, but are skeptical about what market competition is accomplishing here in the real world.  For an empirical study of 13 different voucher and tax credit programs in the real world, see the paper Grading Vouchers by the Milton & Rose D. Friedman Foundation.