Education services are fundamental for economic and social well-being. They not only directly boost public sector productivity, but also the productivity of workers across the economy by improving their skills, increasing their capacity to add value, and giving them the ability to adapt to new ways of working. Furthermore, giving low-income citizens the ability to choose can reduce inequalities in access to high-quality services. Many governments have adopted market mechanisms, such as student choice, payments that follow student choices (or vouchers), and greater autonomy for providers, in order to achieve better quality outcomes.
However, competition agencies face serious challenges when advocating (and enforcing) in education markets, as there are numerous features of these markets that can prevent, restrict or distort competition. For example, competitive incentives can be smothered by capacity constraints, uninformed passive consumers, and a lack of exit risk, or distorted by competitive neutrality issues. Furthermore, there are other policy goals that are important to governments such as providing equal opportunity for all, skills required to fulfil an industrial strategy, or prioritising the needs of the highest or lowest achievers. Competition must therefore be carefully designed in order to complement and not contradict those goals.
In June 2019, the OECD held a roundtable discussion to share experiences on what worked well, and what worked poorly, and hence to understand how competition can best be used to help policymakers achieve their goals.
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