The Synthetic Control Method for Comparative Case Studies: An Application Estimating the Effect of Managerial Discretion Under Performance Management

Abstract

ABSTRACTPublic management researchers are often interested in estimating the effects of aggregate-level management reforms and policy changes, but they frequently rely on observational data that pose a number of threats to internal validity. The synthetic control method for comparative case studies (SCM) has great potential for advancing public management scholarship by addressing some of the methodological challenges associated with observational data and providing intuitive graphical results that help researchers communicate their findings to audiences unfamiliar with quantitative methods. SCM uses a transparent, data-driven algorithm for selecting a weighted combination of control units that act as a plausible counterfactual for estimating causal effects. This article demonstrates SCM by investigating the effect of enhancing managerial discretion under performance accountability systems in the context of public education. The article also provides a number of possible avenues for future public management research using SCM and practical guidance for applying the method.