State Takeovers Research Articles

How State Takeovers of School Districts Affect Education Finance, 1990 to 2019

Abstract State takeovers of school districts—a form of political centralization that shifts decision-making power from locally elected leaders to the state—have increased over time, often with the purported goal of improving district financial condition. Takeover has affected millions of students since the first takeover in 1988 and has been more common in districts serving marginalized communities. We investigate whether 104 takeovers from 1990 to 2019 affect financial outcomes using event study methods. We find that takeovers increase annual school spending by roughly $2,000 per pupil after five years, leading to improvements in some aspects of financial condition (budgetary and long-run solvency), on average. New funds primarily come from state revenues and mostly cover districts' legacy costs (debt and employee benefits). These effects are larger when takeovers are motivated by academic and/or other, non-fiscal reasons. However, takeovers are experienced unequally, with Black students less likely to experience the takeover-induced increases to expenditures and improvements in fiscal condition. This suggests political centralization can promote fiscal health but with potentially concerning equity implications.

The New Education Politics in the United States

During the COVID-19 pandemic, school district politics rose to prominence on the nation's political agenda, as school boards grappled with controversial decisions about reopening schools and implementing mask mandates. A growing number of political scientists are using newly available data and innovative research strategies to examine policy responsiveness, elections, segregation and inequality, state takeovers, interest groups, democratic deliberation, and public opinion—all while focusing on the unique context of education politics. We illuminate the distinctive institutional and policy context of US education politics and review new research in the field, including growing evidence of partisan polarization and the continuing significance of race for influencing power and decision making about schools in the United States. The field has made great strides in the last decade; we highlight the emerging themes from that already rapidly growing literature, while pointing out areas for future research.

Small government takeover: The politics of public-school board dissolution and the impact on student achievement

ABSTRACT State takeovers of public-school districts are a controversial method to help fix struggling schools across the United States. This article considers the reasons behind takeovers, their effects on schools and communities, and both the positive and negative aspects of state involvement. We examine various state laws and specific examples from 3 Texas public school districts to understand how takeovers influence school performance, community participation, and district operations. Additionally, we consider the role of factors like socioeconomic conditions and political climate in determining the success of state interventions. Our goal is to contribute to the ongoing conversation about whether state takeovers are an effective solution for the complex challenges facing underperforming schools and school districts. To that end, we conclude by offering recommendations for future policy development and implementation.

Ultimate Control Rights, Nationalization and Firm Performance: Evidence from China

ABSTRACT This study extends the empirical literature on nationalization by examining the determinants and consequences of state takeovers among China listed firms in which ultimate control has been transferred from private owners to the government. This study finds that state takeovers are more likely in firms with poor performance and higher leverage. Moreover, privatization of central state-owned enterprises is most likely to be reversed. Contrary to popular belief about government interventions, state takeovers lead to higher profitability and labor productivity. These results suggest that government takeovers could address market failures and enhances firms’ performance in emerging markets.

Decree or democracy? State takeovers and local government financial outcomes

AbstractMany states possess the authority to intervene in local fiscal emergencies, in some cases curtailing decision‐making powers of local officials through the appointment of an emergency financial manager. Previous research has recognized that these managers can push through unpopular reforms that may improve financial health but come at the expense of local control and democratic accountability. We assess the financial outcomes after eight recent state takeovers relative to a matched counterfactual comprised of similarly distressed general purpose local governments. The staggered difference‐in‐differences analysis shows emergency managers improve budgetary solvency and increase fiscal reserves. These enhancements are achieved through significant reduction of general fund expenditures. Several long‐term indicators show deterioration in financial health after state intervention reflecting a significant decline in long‐term assets. Overall, municipalities subjected to a state takeover did not realize significant long‐run improvements in financial health indicators relative to counterfactual governments.

Impacts of Emergency Financial Management as Governance Reform in Michigan Schools

This mixed-methods case study examines the emergency financial management legislation enacted in Michigan from 2009 to 2018 as an education policy for governance reform in three local school districts: Detroit, Highland Park, and Muskegon Heights. From its inception, the emergency financial manager law was an intervention strategy for local municipalities in financial emergencies. Still, in 2009 it was used to enable state takeovers of three local school districts experiencing financial emergencies. This study addresses the gap in the literature regarding the effectiveness of emergency management as an education policy in general and highlights its specific application to the three districts.

State Takeover of School Systems and Within-District Fiscal Equity

State takeovers of school districts typically involve dramatic changes to the workforce in the targeted school system and are often undertaken for the express purpose of improving a school system’s finances. However, little is known about how takeover affects education spending, particularly the distribution of funds across schools within districts. This has important implications for human resources because inequitable spending exacerbates teacher quality shortages for schools that serve marginalized students. We capitalize on a novel source of school-level education spending data for 2018–2019 to examine how takeover influences overall spending, equality of spending across schools within districts, and race-, ethnicity-, and class-based gaps in spending across schools. We do this for a national sample of 24 districts taken over between 2013 and 2019 matched to a set of untreated comparison districts with a high propensity for takeover. We find that state takeover is associated with higher levels of education spending, and that the greater funding promotes racial and ethnic fiscal equity but does not increase income-based school finance equity. Importantly, average increases in school spending are likely too small to substantially affect educational inequality. Therefore, takeover does not seem to be a sufficient mechanism for meaningfully mitigating within-district finance inequity.

HIPERINFLASI VENEZUELA: DAMPAKNYA TERHADAP POSISI STRATEGIS AMERIKA SERIKAT-VENEZUELA

This paper aims to describe the strategic position between the United States and Venezuela in the context of Venezuela's hyperinflation. Since 2016 Venezuela has experienced severe currency volatility and has become a backward country due to mismanagement of its economic policies. The occurrence of this phenomenon is known to have its roots in state takeovers of private companies in leading sectors and massive subsidies without a safety net during the oil price boom under Hugo Chavez's leadership. This instability was then inherited by his successor, Nicolas Maduro, which marked the weakening of the Venezuelan economy. Maduro initiated a policy of massive money printing and redenomination which in fact further increased domestic inflation. This is also directly proportional to the dynamics of the US-Venezuela relationship which started from the capitalist camp with the same pattern of interdependence. Over time, the spirit of Bolivarianism that strengthened in the Chavez and Maduro eras had a major impact on the relations between the two countries in terms of their strategic position. This of course has implications both at the level of ideology and trade between countries. This paper uses a qualitative-descriptive research method with literature study as a data source in describing the research problem. The researcher uses the theory of realism as an analytical lens and the conception of Bolivarianism which explains the behavior of Venezuela as a country overshadowed by a struggle for power.

Evaluating Education Governance: Does State Takeover of School Districts Affect Student Achievement?

AbstractLocal school boards have primary authority for running educational systems in the U.S., but little is known empirically about the merits of this arrangement. State takeovers of struggling districts represent a rare alternative form of educational governance and have become an increasingly common response to low performance. However, limited research explores whether this effectively improves student outcomes. We track all takeovers nationwide from the late 1980s, when the first takeovers occurred, through 2016 and describe takeover districts. While these districts are low performing, we find academic performance plays less of a role in predicting takeover for districts serving larger concentrations of African American students. We then use a new data source allowing for cross‐state comparisons of student outcomes to estimate the effect of takeovers that occurred between 2011 and 2016. On average, we find no evidence that takeover generates academic benefits. Takeover appears to be disruptive in the early years of takeover, particularly to English Language Arts achievement, although the longer‐term effects are less clear. We also observe considerable heterogeneity of effects across districts. Takeovers were least effective in districts with higher baseline achievement and least harmful in majority‐Hispanic communities. Leaders should be cautious about using state takeover without considering local context and a better understanding of why some takeovers are more effective than others.

How Community Engagement Helped Transform the Union City Public Schools

ABSTRACT Over the past three decades, reformers have championed approaches to improving schools that have included state takeovers, school closures, and firing teachers. Despite the prevalence of these policies, these reform efforts have failed to produce strong systems of public education. This article examines Union City schools in New Jersey (USA), a district that was on the verge of experiencing a state takeover for years of academic underperformance but that is now celebrated as an exemplary public school system that serves a predominantly Latino immigrant population. In this article, I argue that community engagement—particularly, the state engaging the local community—played an important role in the prevention of a takeover and the eventual process of improving the Union City schools. The results of the study show how states can help build strong systems of public education in cities throughout the country by committing to cultivating citizenship and promoting democratic participation.

Review: Takeover: Race, Education, and American Democracy, by Domingo Morel

Review: <i>Takeover: Race, Education, and American Democracy</i>, by Domingo Morel

Preserving Education as a Public Good: Lessons from the Grassroots

The article provides an overview of my book, The Fight for America’s Schools: Grassroots Activism in Education. The book examines how grassroots activists in Pennsylvania and New Jersey challenged various neoliberal reforms in education such as high stakes testing, school closures, state takeovers of local school districts, and charter school expansion. The four case studies focus on who the activists were, how they became involved, the challenges they faced, and the prospects for coalition building across different constituent groups. The comparative analysis reveals the role of political, organizational, demographic, and historical factors in shaping how activism played out in each location and in its effectiveness.

Recovery, Achievement, and Opportunity: A Comparative Analysis of State Takeover Districts in Louisiana, Tennessee, and Georgia

Although state-run turnaround districts have grown in prominence as a school improvement strategy with significant equity implications for urban education, little is known about the similarities and differences across states. This article provides a comparative analysis of state-run takeover districts in Louisiana, Tennessee, and Georgia. Although there are several similarities such as the centrality of test-based accountability and charter schools as an intervention strategy, no two state takeover districts are the same. The effectiveness of state takeovers is mixed and complicated by equity concerns as well as uncertainty about which aspect of state takeovers may be driving school improvement.

A Third Way: The Politics of School District Takeover and Turnaround in Lawrence, Massachusetts

Purpose: School district superintendents say politics is the number one factor limiting their performance, yet research provides limited guidance on navigating the political dynamics of district improvement. State takeovers and district-wide turnaround efforts tend to involve particularly heated and polarized debates. Massachusetts’ 2012 takeover of the Lawrence Public Schools provides a rare case of state takeover and district turnaround that both resulted in substantial early academic improvements and generated limited controversy. Method: To describe the stakeholder response and learn why the reforms were not more contentious, I analyzed press coverage of the Lawrence schools from 2007 to 2015, public documents, and two secondary sources of survey data on parent and educator perceptions of the schools. I also interviewed turnaround and stakeholder group leaders at the state and district level regarding the first 3 years of reform. Findings: I find that the local Lawrence context and broader statewide accountability system help explain the stakeholder response. Furthermore, several features of the turnaround leaders’ approach improved the response and reflected a “third way” orientation to transcending polarizing political disagreement between educational reformers and traditionalists. Examples include leaders’ focus on differentiating district–school relations, diversifying school management, making strategic staffing decisions, boosting both academics and enrichment, and producing early results while minimizing disruption. Implications: The findings provide guidance for state-level leaders on developing accountability systems and selecting contexts that are ripe for reform. The results also provide lessons for district- and school-level leaders seeking to implement politically viable improvement of persistently low-performing educational systems.

Rootless Reforms? State Takeovers and School Governance in Detroit and Memphis

State takeovers were an infrequently applied strategy to address financially and academically troubled schools for many decades. Although 23 states had the right to take over individual schools, on...

The Effects of Centralized Government Authority on Black and Latino Political Empowerment

Studies on centralization and its effect on political empowerment among racial minorities suggest that decentralized arrangements are optimal for increasing empowerment. However, this article argues that the “decentralization-as-optimal” perspective ignores the complicated history that racial minorities have had with government. To assess the effects of centralized government on political empowerment among racial minorities, this article examines how state takeovers of local school districts have affected black and Latino descriptive representation on local school boards. Using an original dataset of state takeovers of local school districts from 1989 to 2013, as well as case study analysis of Newark, New Jersey, this article shows that centralization affects communities differently according to the level of political empowerment they have at the time of centralization.

The state capture of Russian non-bank financial institutions and markets after the 2008 crisis

This article explores the expansion of the Russian state into financial markets after the 2008 global financial crisis. The main argument is that the Russian state has been unable to pursue its own developmental agenda in the sector despite increased regulation and state takeovers. While independent private market participants were pushed aside by state-controlled financial intermediaries, the state failed to follow its own policy strategy towards establishing an international financial centre in Moscow. Instead, the Russian financial market institutions were rendered into a vehicle for inter-bank lending under control of the Central Bank of Russia. Data from Russian stock market and corporate bond market trading highlights the trend. The study discusses the role played by informal power networks in redistribution of state-controlled resources and financial flows, and how this factor influenced the state regulation of financial markets in Russia.

Off the rails: Is state ownership bad for productivity?

The performance of Indian railways in the nineteenth century provides a great context to study the effects of state ownership on productivity and other aspects of firm operations. We rely on a key feature of the institutional background whereby the colonial Government of India purchased a majority ownership stake in private railways at predetermined dates set by contracts negotiated decades before the companies came under state ownership. Controlling for individual railway fixed effects, year fixed effects, and railway-specific time trends, we find no evidence of a decline in TFP following state takeovers of private companies. Instead of reducing productivity, as the recent experiences with privatization would suggest, we find that the Government of India maintained productivity when it became the owner of railways. Government ownership influenced certain areas of operations such as the capital-labor ratio, but not others such as fares. Our results point to the conditions where state ownership is no worse than private ownership in terms of productivity.

Off the Rails: Is State Ownership Bad for Productivity

The performance of Indian railways in the nineteenth century provides a great context to study the effects of state ownership on productivity and other aspects of operations. We rely on a key feature of the institutional background whereby the Government of India purchased a majority ownership stake in private railways at predetermined dates set by contracts negotiated decades before the companies came under state ownership. Controlling for individual railway fixed effects, year fixed effects, and railway-specific time trends, we find no evidence of a decline in TFP following state takeovers of private companies. Instead of reducing productivity, as the recent experiences with privatization would suggest, we find that the Government of India maintained productivity when it became the owner of railways. Government ownership influenced certain areas of operations such as the capital-labor ratio, but not others such as fares. This suggests the state was able to achieve similar productivity without following the blueprint of private companies.

Economic crisis, accountability, and the state’s coercive assault on public education in the USA

This article examines education accountability as a mechanism of coercive neoliberal urban governance in the USA. Drawing on Gramscian theory of the ‘integral state’ as the dialectical synthesis of coercion, consent, and resistance, the author argues that as the crisis gives the state less room to win consent, it intensifies coercion as a strategy of governance. The author discusses three aspects of coercive state responses to the crisis in relation to education: (1) cannibalizing public education as a site of capital accumulation; (2) imposition of state austerity regimes and selective abandonment of education as a mechanism of social reproduction and legitimation in African-American communities that have become zones of disposability; and (3) governance by exclusion of African-American and Latino communities through school closings, state takeovers of elected governance bodies, and disenfranchisement. Systems of accountability are integral to this process as they make schools legible for the market, mark specific schools and school districts as pathological and in need of authoritarian governance, and justify minimalist schools in areas of urban disposability. This paper concludes with the potential of emergent resistance to dominant neoliberal education policy and argues that breaking with the framework of accountability and testing is critical to a counter-hegemonic alternative.