The Organizational Economics of School Chains

Lorenzo Neri (Queen Mary University of London)
Elisabetta Pasini (Queen Mary University of London)
Olmo Silva (London School of Economics)

Abstract: Academics and policy makers are increasingly advocating school autonomy as a way to improve student achievement. At the same time, however, many countries are experiencing a counterbalancing trend: the emergence of ‘chains’ that bind schools together into institutionalized structures with varying degrees of centralization. Despite their prominence, no evidence exists on the determinants and effects of differences in the organizational set-up of school chains. Our work aims to fill this gap. We use the insights of the incomplete contracts literature to study the internal organization of school chains seen as firms. We match detailed survey information on decentralization decisions of procurement activities regarding 410 chains and 2,000 schools in England to student, school and market-level administrative records. We find that chains with a larger share of schools whose leadership background is aligned with the chain board’s expertise, younger chains, and chains that are closer to the market value-added (‘productivity’) frontier decentralize more. We find instead no association between the value-added heterogeneity of the markets in which the chains operate and their decision to delegate. Future work will investigate the link between the structure of school chains and their students’ performance.

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