Research Symposium

BIO

David Margaryan is a Pre-Law student at Florida State University pursuing a Bachelor of Science in Political Science, with a Double Major in History. He is originally from Boca Raton, Florida. Off-campus he has interned for Personal Injury Lawyer Chris Marzwanian.

Educational Privatization and School Choice: The Case of Innovative Financing Mechanisms

Abstract

Innovative financing mechanisms have emerged as a key feature of New Public Management since the 1990s, emphasizing performance-based funding to address social sector inefficiencies. This study examines how these mechanisms operate within education, evaluating their effectiveness in aligning incentives between funders and agencies through principal–agent theory (Saltman, 2017; Heinrich & Kabourek, 2019). Utilizing systematic keyword searches via the Florida State University Library and Google Scholar, peer-reviewed articles were synthesized across regions including the United States, Turkey, Brazil, and Sub-Saharan Africa. Findings indicate that innovative financing can enhance accountability and attract private capital when supported by strong institutional capacity and clear performance metrics (Temple & Reynolds, 2015; Saltman, 2017). However, evidence also reveals mixed results, including challenges in capturing long-term impact and regional variability driven by local political structures (Esper & Acosta, 2023; Güngör Göksu & Altundemir, 2019). These results suggest that while such tools address financing gaps, they are not universal solutions and may reinforce structural disparities if capital funding is inequitable. The study highlights the necessity of contextual adaptation, rigorous evaluation, and equity considerations. Future research should prioritize longitudinal and comparative analyses to better assess long-term outcomes and inform the design of hybrid financing models.

Keywords: Education, Policy, Privatization, Social Impact Bond, Pay for Success, Innovative financing