would punishing principals for the incompetence of teachers cause a moral hazard where A suffers for the bad performance of B thereby subsidizing that performance?
and is the fact that schools allow students leave to take jobs on the side ameliorative of the effects of child-labor laws?
just curious to see how incentives work on an individual level.
Punishing principals for the incompetence of teachers is probably a good idea, but I think the best system of incentives is impossible for any one person to foresee. That is why, if schools were privatized, different schools would try different incentive structures and the best one would be likely to emerge.
Think about a school as another business. The principals in this case would be analogous to "managers." Managers are in large part rewarded or punished based on the performance of those who work beneath them. In turn, managers do their best to make sure the employees under their supervision are performing up to their full potential and make sure to hire/fire the right people.
Just as there are tons of incentive structures in the "real" business world, if schools were privatized we would see a lot more experimentation as far as how schools are run. The parents of students would give their money to the school(s) that provide the best performance, and the incentive structure is just one of many aspects that makes for a good school.
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