How clients' characteristics affect organization performance: Lessons from education

Those who support a greater role for the private sector in the delivery of social services cite evidence indicating that private organizations are more efficient than public agencies. Many of the quality differences between the two types of organizations, however, stem from differences in the composition of the client groups they serve; and these differences in turn stem from regulations that have the effect of sorting the clients of these organizations into groups with distinctly different socioeconomic characteristics. The challenge is to design the public regulations that govern private providers of social services in a way that reduces the tension between clients' demands for access and providers' demands for autonomy. The federal government's experience with education vouchers in the 1970s illustrates the difficulty of meeting this challenge.