Some economic guidelines for design of a charter school district

As the number of charter schools has grown nationally, there is increasing discussion of the consolidation of such schools into charter districts in which all schools would be charter schools from which parents would have the freedom to choose the school that they wished their student to attend. A major question is how such a charter school district would be organized to support its schools and who would perform the different functions required. It is argued that three economic guidelines need to be an important determinant of the solution to this question: the presence of economies of scale; transaction costs; and externalities. The article describes the application of these guidelines to the formation of a charter school district and suggests the different possibilities for addressing a range of important roles by schools, their districts and intermediate organizations and markets.