Friday, January 6, 2012

Education as a principal-agent problem

The Atlantic has an interesting article by Anu Partanen on its website: "What Americans keep ignoring about Finland's schools success." The basic argument is that Finland implemented education reform about a generation ago in order to achieve equity, and that excellence is, in some sense, a fortuitous by-product.

Of course, equity (in this case, equal access to the same quality educational resources for all children, regardless of wealth, ethnicity, location, etc.) is a hard sell in the United States. As a result, Partanen suggests, the dozens of fact-finding missions that come to visit Finland each year almost willfully ignore the key lesson of Finland's model.

Partanen repeatedly cites a top Finnish education official, Pasi Sahlberg, who has written the book Finnish lessons: What can the world learn from educational change in Finland? I have not read the book, so I may be kicking in an open door here, but it appears to me that Partanen's representation of Finland's model risks overlooking its most important attribute.

Consider education as a principal-agent problem. The state would like high educational achievement for all its citizens, and can be seen as the principal. The agents who, in the end, make this goal possible are the teachers. (In between are intermediate principals/agents such as state education boards and the like, but I'm ignoring those for the sake of simplicity.)

Assume that being a good teacher has two components: learnable (a skill set) and exogenous (for example, liking children) and that only a subset of the population of possible teachers has the requisite exogenous characteristics. How do you maximize the chances that your agents are all good teachers?

There are two obvious strategies to adopt: require serious training, and offer a salary (plus non-salary perks such as 'prestige') sufficiently high to attract enough people with the exogenous characteristics needed. This is what Finland appears to have done. It is also what some of the better private schools do in the United States, with pretty good success.

Of course, both training and higher salaries cost money. How might you try to achieve the same goal more cheaply? Well, you could try to specify precisely what students need to learn, and how, and then hire agents to do exactly, and only, that. And make sure they do so by administering ever more frequent standardized tests.

These agents won't need as many skills, and they won't necessarily need the exogenous characteristics, because you have specified exactly what they'll be doing anyway. So you can pay them much less. And you'll get a large number of unmotivated, relatively unskilled teachers. You'll still get a bunch of superb teachers as well, of course, but you risk demotivating them too, since they will not be able to deploy their own capabilities to their fullest extent. This situation would seem to exist in rather too many public school systems in the United States.

However, while Finland's focus on equity may be ignored by American educational reformers, the importance of higher salaries (and prestige) and better training are not. Education reformers have been calling for both for years. In contrast to Partanen, I would bet that you could retain the system of public and private schools the United States has at the moment and still achieve much better results, as long as you were willing to commit to paying for higher teacher salaries and more extensive training.

The problem, of course, is that while the state is the principal in my little model, it is also an agent: it is the agent of the American public. So we would need to convince the American public to spend more (perhaps considerably more) on teachers. And that is perhaps an even harder sell than equity.

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  26. An interesting account of why we don't emulate Finland, but I think you reached the heart of the matter when you said, " equal access to the same quality educational resources for all children, regardless of wealth, ethnicity, location . . . is a hard sell in the United States." In fact, it may be the hardest of sells. I am reminded of what Michael Katz one said, "“I expect . . . that any serious effort to equip poor children as effective competitors for the well-to-do will meet enormous, and probably successful resistance.”

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  27. Also, I am unsure of your application of the principal-agent problem to education -- it is not nearly so unproblematic as you make it seem.

    First of all, I wonder why the principal in this case is the state (or even the parent) and not the child who is being educated.

    I am not dismissing the interests of the state, but as Gutmann argues in her Democratic Education, in the absence of a prescient child who can tell you exactly what s/he needs, there are three sources of authority in education: parents, the state and educators. They are all agents vis-a-vis the child-principals, but have the added task of determining what form their agency will take and to what end. That is, they must determine what will benefit the child.

    In addition, they all have their own agendas. Parents may want to encourage students to follow paths that add to their own prestige, states may want to educate students so as to keep them in power, teachers and other educators may want greater compensation and easier working conditions.

    Thus we have three flawed and failable sources of authority. It is for this reason that Gutmann rejects any single one source of authority -- any single principal. For Gutmann, that means the three sources of authority

    In all three the representation of children's interests is necessarily indirect: the family state is one in which children are educated for the good of the state and the sake of social harmony; the state of familiesis one where parents are entrusted to make choices for and pursue the best interests of their children; and the state of individuals is one in which relies on educational professionals and expert knowledge to create institutions which maximize the future choice of children, “without prejudicing children towards any controversial conception of the good life.” Saying that none of them by itself coheres with a liberal democracy, Gutmann rejects all three models as insufficient in themselves: In the end, she argues, none of the three models work in a liberal democracy precisely because they are based solely on a single source of authority.

    Not that Gutmann is the last word, but I think the simple presentation of the principal-agent problem you give us does not sufficiently problematize the situation as regards education. We are, after all, educating the future sovereign people.

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