Market failures in education: Part V
Monopsony market structure in practice
Portfolio Management Models (PMMs) of school districts demonstrate how market-based reforms manifest in the current education policy environment, and provide an excellent example of monopsonies in public education. Bulkley, Henig & Levin (2010) explain in Between Public and Private: Politics, Governance, and the New Portfolio Models for Urban School Reform, “PMM is better understood as a contracting regime” (p. 28). A contracting regime does not attempt to bypass government as some market-based reformers (e.g. Chubb & Moe, 1990) advocate, but rather it “place[s] government into the role of consumer supreme” and incorporates private providers in an “attempt to harness markets to public goals,” (Bulkley et al., p. 28, 2010). Placing the government (i.e. the district) in the role of “consumer supreme” is what makes the PMMs monopsonies. Continue reading