Association for Public Policy Analysis & Management

Studies of school choice (Fryer 2014, Dobbie and Fryer 2011) have linked achievement gains to innovative managerial strategies from “high quality” charter schools. This suggests that granting public schools the autonomy to implement charter-like reforms could improve organizational performance. In the public management literature, performance management theory suggests that provision of managerial autonomy will drive performance improvements in accountability-heavy environments (Moynihan 2006). However, the relationship between autonomy and school performance is understudied, and accountability systems are often criticized for failing to empower schools. If autonomy improves performance, autonomy-based interventions could help address performance deficits in struggling urban schools.

This study evaluates an educational intervention to test the relationship between managerial autonomy and organizational performance. After struggling with chronic low performance, Denver Public School District expanded accountability and school choice, spurring significant reform in traditional public schools. As schools attempted to innovate, they confronted barriers resulting from restrictive district policies. Some schools requested waivers from certain policies, attracting attention from policy-makers who created a formal waiver process through the 2008 Innovation Schools Act. Through this process, schools were granted autonomy to implement a number of innovative policies, such as in-house teacher evaluation, longer school days and years, private fundraising and consulting, and curricular reforms. Since Innovation Schools were differentiated through the provision of managerial autonomy, this reform presents an opportunity to test the understudied relationship between managerial autonomy and organizational performance in public schools.

This study employs school-level data from the Colorado Department of Education to evaluate the effect of the Innovation Schools reform on school performance using a two-way fixed effects difference-in-differences design. The dependent variable is school-level mean score on year-end examinations and the treatment leverages within school variation from 13 public schools that transitioned to Innovation status. Robustness checks include estimation with propensity score matched comparison groups to address non-random selection into treatment, Wild Bootstrap hypothesis testing to address the small number of treated clusters, graphical examination and placebo testing to assess parallel trends assumptions, estimation with school-specific linear time trends, and analysis of heterogenous effects.

District-wide, 50-60 percent of students fail to achieve proficiency on year-end examinations, and proficiency rates are significantly lower in Innovation Schools. I find that transition to Innovation status produced significant positive effects of between .1 and .3 standard deviations on math, reading and writing test scores. Findings are robust across different model specifications. Heterogeneity analysis suggests that innovation is a high-risk high-reward venture; the positive treatment effects mask 2 groups of treated schools experiencing either positive or negative effects.

The results suggest that delivering managerial autonomy to struggling urban public schools might drive significant performance improvements. This paper contributes to the school choice literature, demonstrating the efficacy of charter-like reforms in traditional public schools and to the public management literature by demonstrating a positive relationship between managerial autonomy and organizational performance.