Third-party governance and performance measurement: A case study of publicly funded private school vouchers

Abstract

This article considers the introduction of a performance measurement reform for private schools serving students who receive state-provided vouchers in Milwaukee, Wisconsin. Drawing on unique panel data collected both before and after the reform, we show that private sector performance increased significantly when outcomes were publicly reported. We frame these results in the context of third-party provision of public services and argue that our evidence suggests that market-based competition alone may not drive nongovernmental providers to perform at optimal levels. Instead, such vendors may require performancemonitoring schemes similar to those faced by their governmental counterparts.