Increased choice and competition in Michigan's public school system is providing many districts with powerful incentives to improve- incentives that decades of increased spending and additional regulations could not provide, according to a report released in August by the Mackinac Center for Public Policy.

"For some districts, making parents happy isn't just good public relations anymore," say report authors Matthew Ladner, Ph.D., president of Capitol Research and Consulting in Texas, and Matthew Brouillette, director of education policy at the Mackinac Center. "It has come to mean survival and prosperity."

The report examines how school districts in Michigan's largest county are responding to competition from charter schools and the public "schools-of-choice" program, which allows students to attend other public schools in their own and neighboring districts. The evidence shows that rather than harming the cause of better education, limited competition among public schools has resulted in a more customer-oriented focus in some districts.

One of the districts highlighted- Dearborn City School District- sprang into action when it faced competition from four charter schools within the district and additional charter schools and public "schools-of-choice" in adjoining districts. "Rather than waiting for students to leave the district for charter schools or neighboring districts," says Dr. Ladner, "Dearborn created a popular 'Theme Schools and Academies Program' which allows schools to develop specialized programs to satisfy the diverse preferences of parents and students." The program's offerings include character education, creative arts, engineering technology, history, and others. The result: Instead of losing enrollment to its competition, Dearborn enrollment has increased from 14,229 in 1994-95 to 16,263 in 1998-99.

"Dearborn has created a mechanism for a degree of parental choice in education within the context of a government school district," Dr. Ladner said. Dr. Jeremy Hughes, superintendent of the Dearborn district, stated "We welcome competition. The reforms we've enacted would not have happened, at least not as fast, without competition."

Dearborn is just one example of the positive impact of competition on Michigan school districts, says the report. Others, such as the Inkster district near Detroit, had been serving its students poorly and losing enrollment for decades. By the end of the 1990s it was surrounded by six charter schools. When its very survival was threatened by a proposed state takeover, district leaders finally sought a contract with Edison Schools, a private company that runs public schools across the nation. Now, there seems to be some promise for Inkster.

"Only time will tell whether or not Edison can rescue the district," says Brouillette. "However, it required a competitive environment to force action to be taken, where before a bad situation was allowed to fester."

According to the report, some districts have met the challenge with improved services, while others have had to absorb the "opportunity cost" of failing to attract additional students. Some districts have made changes to prepare for additional competition in the future, while others are taking a more reactive approach. Nevertheless, although fewer than 5 percent of Michigan public school students are able to take advantage of these school choice options, competition for students among Michigan's K-12 schools has improved educational opportunities for children and encouraged schools to respond to the needs and demands of families.

"As the citizens of Michigan consider giving parents more choices in how and where their children are educated, they must recognize how public schools respond when they must improve or face the possibility of going out of business," says Brouillette. "Competition has been that missing element in most school reform measures. It provides the most powerful incentive for schools to improve while expanding the ability of parents to choose the best and safest school for their children."

Copies of the report, The Impact of Limited School Choice on Public School Districts, are available from the Mackinac Center for Public Policy at (989) 631-0900 or at www.mackinac.org.