Some of the more ideological education reforms have favored charter schools as something of a magical solution. Increase choice and the market will fix all problems. There is solid evidence that a small number of charter schools perform splendidly, however charter schools have proven not to be a panacea. Indeed, it looks like the average charter school has under-performed the average traditional public school.
Baude, Casey, Hanushek, and Rivken put forth the hypothesis that markets take some time to shake out, and that after a shaky start charter schools as a whole are improving. The authors put together value-added measures for a large number of Texas charter schools and compared their performance to Texan traditional public schools, with a focus on how that comparison has evolved over time. Here’s one picture (arrows added).
In 2001, the distribution of charter school math outcomes had a big left shoulder. A lot of programs were under-performing traditional public schools. A decade later, a lot of those under-performers had either gotten their act together or closed. The 2011 distribution of charter school outcomes looks not much different from how traditional schools look.
Don’t misunderstand, charter schools aren’t wildly outperforming traditional schools in Texas. What’s happened is they’ve caught up. This doesn’t prove that “choice” and the market are magic. It does suggest that given time the market often fixes its failures.