Government by voucher

Boston University Law Review

Volumn 80, Issue 1, 2000, Pages 205-232

  Trebilcock, Michael J ^a   Daniels, Ron ^a   Thorburn, Malcolm ^a  

^a NONE

Author keywords

[No Author keywords available]

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EID: 0034409396     PISSN: 00068047     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (35)

1. See e.g., DAVID OSBORNE & TED GAEBLER, REINVENTING GOVERNMENT: How THE ENTREPRENEURIAL SPIRIT IS TRANSFORMING THE PUBLIC SECTOR 76-107 (1993) (describing how competition can unlock the bureaucratic gridlock that hamstrings many public agencies); VICE PRESIDENT AL GORE, FROM RED TAPE TO RESULTS: CREATING A GOVERNMENT THAT WORKS BETTER AND COSTS LESS 43-64 (1993) (discussing ways to break up government monopolies in favor of competition).
2. See e.g., DAVID OSBORNE & TED GAEBLER, REINVENTING GOVERNMENT: How THE ENTREPRENEURIAL SPIRIT IS TRANSFORMING THE PUBLIC SECTOR 76-107 (1993) (describing how competition can unlock the bureaucratic gridlock that hamstrings many public agencies); VICE PRESIDENT AL GORE, FROM RED TAPE TO RESULTS: CREATING A GOVERNMENT THAT WORKS BETTER AND COSTS LESS 43-64 (1993) (discussing ways to break up government monopolies in favor of competition).
3. See OSBORNE & GAEBLER, supra note 1, at 25-48 (elaborating on the distinction between steering and rowing).
4. See ALBERT HIRSHMAN, EXIT, VOICE AND LOYALTY: RESPONSES TO DECLINE IN FIRMS, ORGANIZATIONS AND STATES 3-4 (1970) (articulating the differences between exit and voice).
5. See ARTHUR OKUN, EQUALITY AND EFFICIENCY: THE BIG TRADE-OFF 1(1975) (discussing how the American economy encourages personal effort but, in doing so, creates inequalities).
6. See DAVID BRADFORD AND DANIEL SHAVIRO, THE ECONOMICS OF VOUCHERS 45-50 (National Bureau of Econ. Research Working Paper No. 7092, 1999) (describing the differences in incentives faced by private and public suppliers).
7. However, while government contracting out permits specialized provision, it does not provide any assurance that the preference satisfaction benefits associated with vouchers will be realized. Here, government decision-makers are making consumption decisions on behalf of the public; in the case of vouchers, citizens make these consumption decisions directly.
8. Experience goods are goods whose full attributes are only revealed by usage. Search goods are goods whose attributes are fully observable on prior inspection. See Phillip Nelson, Advertising and Information, 82 J. POL. ECON. 729, 738 (1974) (distinguishing between search goods and experience goods); Phillip Nelson, Information and Consumer Behavior, 78 J. POL. ECON. 311, 312 (1970) (same). Credence goods are goods whose attributes are never fully observable by the user and entail reliance on the suppliers' claims about them. See Richard A. Posner, An Economic Approach to the Law of Evidence, 51 STAN. L. REV. 1477, 1489 (1999) (defining credence goods).
9. Experience goods are goods whose full attributes are only revealed by usage. Search goods are goods whose attributes are fully observable on prior inspection. See Phillip Nelson, Advertising and Information, 82 J. POL. ECON. 729, 738 (1974) (distinguishing between search goods and experience goods); Phillip Nelson, Information and Consumer Behavior, 78 J. POL. ECON. 311, 312 (1970) (same). Credence goods are goods whose attributes are never fully observable by the user and entail reliance on the suppliers' claims about them. See Richard A. Posner, An Economic Approach to the Law of Evidence, 51 STAN. L. REV. 1477, 1489 (1999) (defining credence goods).
10. Experience goods are goods whose full attributes are only revealed by usage. Search goods are goods whose attributes are fully observable on prior inspection. See Phillip Nelson, Advertising and Information, 82 J. POL. ECON. 729, 738 (1974) (distinguishing between search goods and experience goods); Phillip Nelson, Information and Consumer Behavior, 78 J. POL. ECON. 311, 312 (1970) (same). Credence goods are goods whose attributes are never fully observable by the user and entail reliance on the suppliers' claims about them. See Richard A. Posner, An Economic Approach to the Law of Evidence, 51 STAN. L. REV. 1477, 1489 (1999) (defining credence goods).
11. See BRADFORD AND SHAVIRO, supra note 5, at 31-33 (illustrating the effects of vouchers on consumer choice).
12. However, these problems are not necessarily related to the voucher system per se, as much as they are to provision of public goods and services through private suppliers. That is, these problems would still remain if government contracted out its monopoly responsibilities to private suppliers. However, the monitoring problems for government to control this propensity would be less severe under a sole supply contract.
13. See BRADFORD AND SHAVIRO, supra note 5, at 18 ("It is natural to think of vouchers as inherently non-cash-equivalent from the recipient's standpoint, because they can only be used to purchase earmarked commodities. In fact, however, a voucher is equivalent to a cash grant unless the earmarking alters the recipient's overall budget allocation between commodities.").
14. See id.
15. See id.
16. MILTON FRIEDMAN, CAPITALISM AND FREEDOM 85-107 (1962) (outlining the role of the government in education).
17. See MILTON & ROSE FRIEDMAN, FREE TO CHOOSE 157 (1980) (describing how the interests of teachers and administrators are served by consolidating control of the educational system in the hands of the government).
18. See CANADA COMMUNICATION GROUP, EDUCATION AND TRAINING IN CANADA 27 (1992) ("[A]wareness at home of the importance of education is the crucial factor.").
19. See HIRSHMAN, supra note 3, at 15-16 (examining the relationship between markets and politics).
20. In one of the few experiments with school choice - the Juanita Virgil Academy in Milwaukee - this sort of school failure actually took place, causing the students to lose a year's education. See CARNEGIE FOUNDATION FOR THE ADVANCEMENT OF TEACHING, SCHOOL CHOICE 67 (1992).
21. See BRADFORD & SHAVIRO, supra note 5, at 48-50 (articulating the incentive structure of a non profit agency).
22. See J. Douglas Williams & Frank H. Echols, The Scottish Experience of Parental School Choice, in SCHOOL CHOICE: EXAMINING THE EVIDENCE 49 (Edith Rasell & Richard Rothstein, eds. 1993) (finding that parents who exercised choice were "more highly educated and had more prestigious occupations than those who sent their children to the designated school.").
23. See JEROME J. HANUS & PETER W. COOKSON, CHOOSING SCHOOLS - VOUCHERS AND AMERICAN EDUCATION 160 (1996).
24. See Guido Calabresi & Philip Bobbitt, Tragic Choices, in LIBERTY AND JUSTICE: ESSAYS IN POLITICAL THEORY 2 (Brian Barry ed., 1991) (recognizing the argument that human life is priceless and should always be protected).
25. See MYRON LIEBERMAN, PRIVATIZATION AND SCHOOL CHOICE 244 (1989) (noting that extra billing is allowed in Vermont for secondary level education, but only for the wealthy).
26. See Taryn Rounds Parry, Will Pursuit of Higher Quality Sacrifice Equal Opportunity in Education? An Analysis of the Voucher System in Santiago, 77 SOC. SCI. Q. 821, 828 (1996) (noting that in an educational choice experiment administrators tried to "deter the wrong type of students from attending their schools").
27. Since most educational institutions are, in fact, likely to be non-profit institutions, their incentive structure will be more difficult to predict than this model would suggest.
28. See Michael Trebilcock, et. al., Government By Voucher (1999) (unpublished manuscript, on file with the University of Toronto Law School) (applying the voucher concept to education, labor market training, day care, health care, legal aid, long-term care, pensions, food stamps and low income housing).
29. See FRIEDMAN, supra note 13, at 87 (advancing the proposition that educational loan programs should be based on realized income).
30. See e.g., ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, THE OECD JOBS STRATEGY, ENHANCING THE EFFECTIVENESS OF ACTIVE LABOUR MARKET POLICIES 9 (1996) (reporting statistical data of the success of job training programs in OCED countries).
31. See Martha Friendly, What is the Public Interest in Child Care?, 18 POL'Y OPTIONS 3, 6 (1997) (arguing that there is a strong public policy inherent in public-funding child care); Michael Krachinsky & Gordon Cleveland, Rethinking the Rationales for Public Funding of Child Care, 8 POL'Y OPTIONS 16, 16-18 (1997) (identifying reasons for the public funding of child care).
32. For a recent review of various health care models, see CAROLYN HUGHES TUOHY, ACCIDENTAL LOGICS: THE DYNAMICS OF CHANGE IN THE HEALTH CARE ARENA IN THE UNITED STATES, BRITAIN AND CANADA 127-203 (1999).
33. See Report of the Ontario Legal Aid Review: A Blueprint for Publicly Funded Legal Services, ONT. LEGAL AID REV. 137-44 (1997) (setting out "a revised and reinvigorated approach to the delivery of legal aid services" in Ontario).
34. See OKUN, supra note 4, at 48 (identifying the efficiency-equity trade-off and the resulting problems).
35. Mark A. Hall & John D. Colombo, The Charitable Status of Non-Profit Hospitals: Toward a Donative Theory of Tax Exemption, 66 WASH. L. REV. 307, 330 n.76 (1991) (quoting H.L. Mencken).