Thoughts on Gonski and education reform.

With the Gonski reforms expected to be rolled out across Australia in the coming 5 years, it is handy to reflect on what actually are the basic challenges for school reform in Australia. A view of the underlying issues helps one to judge the likely outcomes of the current reforms and others one might think of.

One can see the main learning challenges in Australian schools as related to the quality of what is taught, the quality of who is teaching, and the quality of the school as a whole. Three main issues then come to mind:

  1. The curriculum is often too influenced by political concerns and of low quality.
  2. Teachers are relatively low paid, and have seen their relative wages drop over many decades, leading to the newer cohorts of teachers to be less good as the old ones.
  3. Failing schools are kept going rather than replaced, effectively leading to whole neighbourhoods being bereft of good educational opportunities.

On top of this, the sector has governance issues, like a large education bureaucracy both inside schools and outside of them, but since we are here ultimately interested in the transmission of knowledge, let us focus on the problems at the coal-face and talk about the governance issues when they arise.

Now, on point 1, I am optimistic about the role of the National Curriculum that was recently introduced. It will make it visible what the educational problems are in parts of the country, most likely will lead to a set curriculum and thus a set textbook and teaching aids for all subjects, and should hence significantly raise the bottom of the education distribution (though I don’t think it will matter for the top). Whilst one cannot really see this dynamic yet on the ground, in which schools and states are just getting used to the idea of a national curriculum, one can argue that other countries that have a national curriculum have indeed gone the way of raising the floor (NZ in particular). Given the competitive mindset of the Australians and the fact that you now get frequent international comparisons, I do expect the political pressures to accumulate to use the national curriculum to improve what is taught and how it is taught. In short, I think the signs are good in terms of addressing problem number 1.

Point 2 is a very tricky one because of the fact that we have a large stock of teachers who accept the current wages and hence would not change their behaviour if you increased their wages. This means education authorities, school principals, and ministers have a strong incentive not to raise teacher wages except for the new entrants. However, if you would cheat the stock of existing teachers and only increase wages for the new teachers, you quite understandably run into opposition from the union on equity grounds. Similarly, having schools compete for teachers by letting the good schools offer better teachers higher salaries needs active competition and would probably only happen if the private schools expand and become more academically focused (rather than focused on local networks or particular religions). In short, the pressures from within the sector don’t look like leading to higher teacher pay at all, even though it is well-recognised that better teachers are the main thing that leads to improved education.

Whilst the federal government could explicitly raise teacher wages, the current reforms do exactly the opposite: to partially fund the Gonski reforms, the government is discontinuing the current policies of paying some teachers extra, and the policies under which principals can reward good teachers (and many commentators seem not to realise that the main benefit of paying teachers more is that you attract better people into the profession). In exchange for this effective lowering of teacher pay, it seems likely that it is the already overly large education bureaucracies that will get discretion over how to spend more money, and only non-economists could believe that they are going to spend most of the money on improving education by attracting better teachers into the profession by means of higher wages, rather than to predominantly use the money to hire more and better paid bureaucrats. Indeed, even if the local education bureaucracies were far-sighted and truly interested in teaching outcomes, it makes no sense for them to individually increase teacher pay because aspiring teachers do not know where they will work and hence base their entry decision on the average pay in the whole sector, implying that it needs a central push to increase teacher pay across the board. Given that Gonski seems to imply local authorities get discretion, we are talking about a clear missed opportunity in terms of teacher pay.

The third problem is the trickiest of all and has bedeviled most education reforms and flummoxed many economists too.

The essential problem with failing schools is twofold: their initial failure leads to lock-in effects such that they become hopeless in nearly all dimensions (teaching, parents, pupils), whilst there are enormous political transaction costs in actually closing down a school. Let me expand on both.

Schools can fail for many reasons, just as a marriage can go sour for many reasons. Schools might have a particularly bad principal, have particular drug-prone and aggressive students, might suffer from parents who see the dominant culture as something to be actively resisted, have open warfare between clubs of teachers, etc.

Like a failing marriage, once a school starts to fail, the problems tend to get worse and worse. Good teachers will leave a failing school and try their luck elsewhere. Good pupils will leave to go to other schools. Active parents will similarly take their children elsewhere. So over time, a failing school gets stuck with the most demoralised and least skilled teachers, the most disruptive and dumb pupils, the least interested and least active parents, and a run-down building to boot.

Now, economists know exactly what should happen in such a case: you basically want the whole school to be disbanded. You don’t merely want new management, because new management would still inherit the disruptive culture amongst students and parents. Similarly, a small influx of better pupils or parents wouldnt help much either. No, what you want is for all the teachers, parents and pupils to have to find a better school elsewhere, cap in hand. That’s what happens in a market: what is efficient and productive survives, what is not disbands such that the individual elements can become part of successful entities elsewhere.

Why do you want to destroy the old school rather than reform it? Basically because you want to force the disruptive parents and the dispirited teachers to enter a different culture in which they are the small minority: you want the disruptive kid to go to a school where the disruptive behaviour is not merely frowned upon by teachers, but actively discouraged by the peers in the class. You want the dispirited teacher to go to a school where the other teachers are optimistic and things are run well, so that that teacher rediscovers the good parts about teaching. Etc. Effectively, you want teachers, parents, and pupils to get away from cultural lock-in effects (called peer spill-overs in the jargon of this literature).

Now, here is the rub: destroying an existing school comes with huge initial transaction costs. You force individuals to go to schools further away (a big no-no in policy land, particularly when pertaining to Aboriginal kids); you are stuck with a large expensive property unsuited for anything else; and you would have to pay out redundancy packages for the teachers and actively find places for the pupils.

It should be clear that this disruption is politically very unappealing and a nightmare administratively. So the local politicians and education bureaucrats would usually prefer to have the next generation of local children get no decent education than go through the pain of this disruption. This selfishness on the part of politicians and bureaucrats, by the way, is normal since it is the usual tradeoff between visible short-run pain versus uncertain long-term benefit. It is exactly the same when it comes to bankruptcy of large corporations: politicians don’t want to be seen to be responsible for those forms of short-run pain either.

Now, it is in this realm that the Gonski reforms will succeed or fail. The headline promise is that funding will follow students (a voucher system), which in principle means that good schools can outbid bad schools, that new schools can come in, and that bad schools can thus go bankrupt, to be replaced (potentially in the same location some time later) by good schools.

Will this really happen though, and in particular, will local education authorities allow bad schools to disappear and be displaced by (Christian) private schools or more successful public schools, as many commentators seem to hope? I have my doubts: I find it hard to imagine that local politicians and bureaucrats will not actively sabotage or try to undo any existential threat to bad schools. They simply have too much to lose politically not to engage in ‘emergency loans’, ‘visitation committees’, ‘additional resources’, etc.

I find the following quote by the teacher union ominous as to what will really happen with the Gonski reforms: ‘‘What Gonski proposed to do is not pay teachers but instead direct resources into schools to allow students who are disadvantaged, by a whole range of circumstances, to get better outcomes for education’’. My my, that sounds pretty bad, doesn’t it? The unions clearly don’t think the additional resources will go either to improve teacher pay nor to the disbanding of failing schools. They seem to hope it goes into the bottomless sink of administrators ‘helping’ failing schools.

In this respect, the post-Gonski environment will probably offer a lot of scope for fudge and for rewarding failing schools rather than killing them off. For instance, local education authorities can then easily discover a whole set of mental learning difficulties amongst the pupils of a failing school, thus allowing them to send in an army of monitors who will set ‘performance criteria’. Similarly, they can engage in the ‘let us try new management’ trick, thus ensuring not much changes in the medium run. In short, I fear that the potentially positive aspects of the Gonski reforms are easily sabotaged and that we will end up with more education administrators.

My hope is that the National Curriculum will break the political dead-lock over failing schools: that open league tables will start to make it so clear which schools are really bad, that education authorities will bite the bullet and truly let some schools go under, replaced by better ones. But I am not holding my breath on this.

In the short run however, the resources for Gonski seem partially to come from reducing teacher pay (via the axing of bonuses), which is a clear turn for the worse in terms of attracting good new teachers. Australian education just got a little dumber again.

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

7 thoughts on “Thoughts on Gonski and education reform.”

  1. Interesting essay Paul. But it has convinced me that whilst economists have an important role in developing funding models, they should never be invoved in developing educational policy.

    My major problem is with your arguments regarding “failing schools”. I am not entirely sure how one would determine this on a case by case basis, but I think your approach is overly simplistic. I have been involved in managing sub-units of a company that were verging on failure. We did not abandon them – we moved in and fixed them. Failure was never an option.

    Personally I think an entirely different paradigm is required for managing educational systems – and schools are systems. The tools for measuring performance now exist – they need to be utilised correctly. As I see it you see these tools as a means to identify schools that are failing. That is essentially what the MySchools website does. As a manager of systems I see the tools as a means of measuring whether or not the local managers are succeeding in improving educational outcomes.

    Anyone who has been involved in improving quality outcomes understands that using tools to rank subsystems against each other, while ignoring the environment within which they operate is fraught with danger. Total Quality Management was a buzz phrase in the late eighties and early nineties and it seems to have faded since then. But that does not diminish the efficacy of the philosophy. Edwards Deming has still much to teach us.

    You have argued economics is a social science. My personal view is that your essay simply demonstrates how unscientific the discipline really is.

    Of course these are merely my opinions.


    1. And do you expect that company you worked in, and all other companies in that industry, to survive for another 50 years, propped up by the community? Do you think that ‘no bankrupcy’ is the way to manage any industry or even the economic system? Your ideas belong to the USSR, Peter, another system run by naive engineers who thought they could fix everything.
      Mull it over again, Peter. Putting in cheap shots and a straw-man of my arguments won’t help anyone’s educational outcomes.


  2. A tetchy response Paul. I thought you were inviting comment in the interests of debate. If the straw man is my shots at the “science” of economics then I plead guilty.

    I used the company analogy because in essence that is the core of your argument. But perhaps I was too subtle.

    Let me paint a hypothetical. Robinvale is a small town on the Murray in Victoria. It is a town dependent on irrigation, established as a soldier settlement area after WWII. The demographic was predominantly anglo-saxon but with a significant Italian immigrant population, which moved into the area in the 1950’s. There is also a sizeable Aboriginal community located outside the town in a publicly funded settlement adjacent to the local sawmill.

    The town has three schools – a state funded primary and high school, and a Catholic school that only provides education to year ten. The educational outcomes of these schools are satisfactory.

    Time passes. The ten acre soldier settlement blocks are no longer viable, so they are progressively taken over by the local Italian entrepreneurs and amalgamated into larger holdings. Meanwhile on the other side of the river a state government allows an expansion of irrigation to establish market gardens.

    A new workforce is required to provide labour for this new activity. This is provided by migrants from the pacific islands. In the meantime the aboriginal settlement on the outskirts of the town is closed down and the community is moved into the town proper, into government purchased housing.

    In your essay you did not define any criteria for the failure of the schools in this town. But let us assume that the significant demographic changes have led to failure, by whatever criteria you may apply.

    So we allow these schools to fail. What happens next? The nearest centres are Mildura and Swan Hill. What options does the community have for the education of its children?

    Of course yours was an essay about the so-called Gonski reforms. In my mind this is a classical example of mis-application of a very immature field. Attempting to apply increased funding on a needs based model that has no real foundation to achieve outcomes that have yet to be validated is a disastrous mix. But somewhere in the midst of this there are economists who believe their discipline is a science.


    1. your ‘mea culpa’ is accepted! An essay that starts with ‘thoughts on’ and that continuously talks about ‘I fear’, ‘it seems’, etc. should be read as off-the-hip honest thoughts, not a wrought-out academic piece!

      Ok, lets run with your example of three schools in one community and expand my argument along the way. Let us suppose that we are indeed talking about a community with a viable long-run economic basis (however it came about) and not on oasis of people in a place that is without any long-term hope of sustaining the population.

      Let us then suppose there are two alternative ways of running education in this town: one is to tax the more successful schools by means of pouring more and more subsidies into the less successful ones. Let us call this the ‘no closure policy’. The other is a more brutal survival-of-the-fittest model in which each child comes with a particular pot of money that flows to whichever school the child goes to. This encourages competition between the schools using whatever means available.

      Now, let us then suppose that one school has parents, pupils, teachers, and resources that make it fail, first gradually and then spectacularly such that we are talking about a drugs-ridden, learning-free zone with demoralised teachers and a very unhelpful culture. All the good kids and parents have moved to the other two schools.

      Under the ‘no closure policy’, the education authority and the council pour lots more money into the failing school, basically at the expense of the other two. Of course they also apply for (and get) more funds from the federal government, effectively meaning that money is taken away from successful schools elsewhere (the reality of education is a fixed overall budget for all schools). So the failing school gets sent more teachers, who will be the reluctant ones without a good outside offer because failing schools are not very attractive places to work. The failing school gets more resources for the buildings so they look nice and shiny. It gets a lot of cultural councillors, etc. Moreover, to prevent all the kids leaving, the council and the education authority start to build in restrictions to going to the other schools: capacity constraints, zoning, etc.: whatever it takes to prevent the complete collapse of the failing school in terms of pupil numbers. A dysfunctional culture is allowed to continue in which pupils and parents are effectively subsidised to remain in the dysfunctional school.

      Under the ‘let schools go bankrupt’ policy, some pupils get a higher ‘price tag’: you basically offer more money for the education of the difficult pupils than for the easier pupils. This makes the more difficult pupils worth more to all schools, not just the failing one. The two non-failing schools can then think about setting up bridging programs for difficult pupils into their school, or in other ways compete for the resources going to difficult pupils. Eventually, the failing school then has so few pupils that it closes down with all the pupils transferring to the other two schools. If the local population does not move then a couple of years later, the more successful school sets up a dependance in the same place as the previous failing school. Different teachers, management, culture, etc.

      You tell me which policy is likely to produce better results in the longer run. I advocate the second one, but there is no doubt the reality is the first one.


  3. Thanks Paul for the expansion of your essay.

    The logical flaw in your argument is that it is not based on the realities of a rural environment. It is predicated upon an environment where choices are possible. In the scenario I painted what if all schools fail? Frankly I think you have massively over simplified the choices available. Your model may well work in an urban environment, but in my view it is seriously deficient in a rural environment. Now I accept that the rural population is a tiny fraction of the urban population but their needs must also be considered. Academics residing in ivory towers could benefit by extending their experience beyond the cities in which they reside.


    1. Au contraire!
      Think of what it would take for all the schools in a community to fail. School failure is not something that happens in a year, it takes a long slide down. For all to fail, one is talking about an incredibly dysfunctional community that probably should be disbanded with the members moving to another place.
      As I keep saying, it’s a conclusion politicians don’t want to accept.


      1. I hope you enjoyed your weekend Paul. I certainly did.

        Of course I agree that it is extremely unlikely that 3 schools would fail simultaneously. But that depends upon your definition of failure, which thus far you have failed to provide. I rest my argument.

        Personnaly I think your thesis is an intellectual commentary, totally devoid of reality. But that being said, I don’t think it a waste of time. After all, much of what you have argued bears upon the assumptions implicate in the so-called Gonski Reforms, which if I read you correctly you believe will fail. On this, if I am correct, we will agree.


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