In part, efforts to use finance policies to achieve educational adequacy depend centrally on understanding how to translate dollars into student achievement. In fact, however, knowledge about improving productivity in education is weak and contested. The concept itself is elusive and difficult to measure. There is as yet no generally accepted theory to guide finance reforms. Instead multiple theories, each of which is incomplete, compete for attention. Empirical studies seeking to determine the best ways to direct resources to improve school performance have produced inconsistent findings.

Equality of Educational Opportunity, the famous study of the mid-1960s known as the Coleman Report, found that, after family background factors were statistically controlled, school resource variation did not explain differences in student achievement. The Coleman report ushered in decades of productivity research attempting to understand (and perhaps discredit) that counterintuitive result. For many years, the inability of researchers to speak consistently on how to improve schools has frustrated scientists and policy makers alike. While there is still a great deal of uncertainty about how to make schools better or how to deploy resources effectively, the committee's review of the last several decades of research and policy development on educational productivity makes us more optimistic than our predecessors regarding the prospects for making informed school finance choices. Thirty years' worth of insights have generated a host of ideas about how to use school finance to improve school performance, and researchers have learned to ask better questions and to use improved research designs that yield more trustworthy findings. Knowledge is growing and will continue to grow. One major implication of this fact for school finance is that good policy will reflect both the best knowledge available to date and the need to continue experimenting and evolving as new knowledge emerges.

Even while understanding is becoming more sophisticated, knowledge about how to improve educational productivity will always be contingent and tentative, in part because the characteristics and needs of key actors—the students—differ greatly from place to place. Therefore, solutions to the challenge of improving school performance are unlikely ever to apply to all schools and students in all times and places. Policy makers and the public will have to consider evidence and analysis about the strengths and weaknesses of strategies for change as they also weigh differing values about what Americans want their schools to be and to do.


Four generic strategies can be used to make money matter more for U.S. schools and to propel the education system in desirable directions:

  • Reduce funding inequities and inadequacies;

  • Invest more resources (either new or reallocated from other uses) in developing capacity;

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