these needs to be changed, but change also implies different roles for the participants in the system. The roles of principals and teachers and others are considered in Making Schools Work and receive special emphasis by the Committee for Economic Development (1994).

In many ways, teachers are the most important ingredient of our schooling system, and they must play an active part in the development of improved schools. The teachers who will be best able to work in a new system with enhanced decisionmaking autonomy are probably quite different from many current teachers in terms of experience, training, and aspirations, among other characteristics. Current teachers cannot, however, be ignored in the process. Even though there will be a significant turnover of teachers in the next decade, the current stock of teachers will remain a substantial portion of the total teaching force for many years to come. Implementation of new systems that involve very different responsibilities and rewards must consider transition policies, such as the use of two-tiered employment contracts. New teachers under a two-tiered contract would receive very different contracts from today's standard contract. They would involve altered tenure guarantees, more risks, and greater flexibility and rewards. Existing teachers, on the other hand, would continue under existing employment rules for tenure, pay, and work conditions unless they individually opt for the new teacher contract. Such a structure is one example of an approach designed to recognize the legitimate contractual arrangements with current teachers while establishing radically different structures for the future.

State governments also need to make substantial changes in the role they play in education. The new role of states is to promote and encourage experimentation and implementation of new incentive systems. The long-run future of school reform depends on developing new information, and the states have an essential position in this. They must first work to remove unproductive "input" regulations and certification standards, which unfortunately form the core of most current state education programs. To replace these, states need to work on establishing performance standards and explicit student outcome goals. An important part of this is encouraging experimentation with alternative incentive structures and technologies and providing direct support for the evaluation and dissemination of program information. Clearly, however, local districts do not currently have sufficient capacity to develop, implement, and evaluate their own systems. Moreover, rightly or wrongly, states often mistrust individual districts and undoubtedly will resist permitting complete flexibility within local districts. To deal with local malfeasance, when local systems fail to perform at acceptable levels, states should be prepared to intervene. The form of intervention is important, however. Perhaps the best response involves the assurance to individual students and parents that alternatives will be provided for nonperforming local districts, say through providing extensive choice or voucher opportunities. The opposite approach, pursued now, is either to develop extensive input and process regulations to reduce the range of potentially unacceptable actions by local dis-

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