Examining individual student success through the lens of new institutional economics in an urban public school district : the great graduation gamble

In a perfect world, neo-classical economics and rational theory make sense. But in this imperfect world this paper has turned to Oliver Williamson and his understanding of New Institutional Economics to help us make sense. NIE helps explain institutions and organizations and their role in creating and shaping contracts that fit a very diverse institutional, organizational and human landscape. NIE provides a new lens to examine institutions as diverse as politics and as rigid as economics. Yet, one critical institution has yet to be examined through that lens. That institution is Public Education. It is that examination which this paper undertakes. By examining public education and seeking to explain it with NIE theory, it is my intent to provide fresh language and perhaps an alternative framework for viewing public education. The current debate in education revolves around schools and their productivity in turning out students who can master state and national exams. Understanding the need to start all discussion and debate with the personal transaction cost of education to students completely reverses that debate. Too little attention is paid to the individual student; where they come from, what they bring to the daily transactions they are faced with in education and how they willnegotiate the implied contract into which they have unknowingly entered. By focusing on students rather than organizations and their component parts, we change the measurement of schools from that of organizational production functions to those that create environments where students' needs and abilities have priority. Examining test data of individual student performance in a large urban school district over a nine year period provides the empirical foundation for this approach. And consistent withthe NIE bounded rational approach, it will consider that data with the life experiences that students bring to the market place called school.