Nevada’s legislature just passed legislation to launch the nation’s most expansive Education Savings Account program.

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Pascal-Emmanuel Gobry recently wrote an article in the National Review entitled: “The Way Forward for School Choice — It’s Not Vouchers.”

What is the way forward according to Gobry? Education Savings Accounts.

He writes:

But the bottom line is that true school choice involves not just your choice of school, but your choice of schooling. Vouchers would change what a school would look like. K–12 spending accounts would change what schooling would look like.

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We don’t know if Education Savings Accounts will work. They might or they might not. But I’d like to find out.

So my advice to leaders in Nevada is simple: beware of fuck-ups that will derail the program.

Perhaps the greatest threats to deregulation are high-profile mishaps that turn public opinion against the effort.

While there’s much I like about Education Savings Accounts, it’s not difficult for me to come up with a story where Education Savings Accounts are a total disaster.

Leaders in Nevada need to understand this. They need to sweat implementation. They need to protect against worst case scenarios.

Even the most ardent libertarians should understand that policies are not judged by their potential or actual utility; they are judged by the theater of public opinion.

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Here’s some details of the funding of Nevada’s Education Savings Account program:

• For children with disabilities or students from families with incomes less than 185 percent of the federal poverty level ($44,863 for a family of four), students will receive 100 percent of the statewide per-pupil, or around $5,700.
• For families with incomes exceeding 185 percent of the federal poverty level, the funding amount is 90 percent of the statewide average basic support per pupil, or around $5,100.

The funding can be used for just about anything education related, including:

• Tuition and fees at an approved private school;
• Tutoring or other services provided by a tutor or tutoring facility that is a participating entity;
• Tuition and fees for a distance learning program;
• Fees for any special instruction or special services if the child is a pupil with a disability;
• Fees and tuition for a college or university in Nevada if that student utilizes those expenses for dual credit.

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Another way to think about the roll-out of an Education Savings Account program is that is a race between educators and charlatans.

Charlatans can move quickly. They can create tutoring programs with fancy websites, a great sales team, and a terrible product.

Educators, especially in an immature market without provider capacity, will move slower. It will take time for educators to become entrepreneurs, to take risks, to iterate their way into creating education products that can work under the new policy regime.

My strong prediction is that over the long-term educators will create incredibly innovative methods of schooling that can harness the flexibility of Education Savings Accounts.

But if they lose the race to charlatans, they might never have the chance to create these products: public backlash could kill the program; consumer stickiness could make it very difficult to recapture market share; weak information could make it difficult to distinguish between good and mediocre products.

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Another way to think about Education Savings Account is that they pit consumer irrationality versus government inefficiency.

I’ve had many, many conversations with parents about education and they are often very wrong about issues where there is a strong research base that points in one direction.

I’ve also witnessed many, many school districts that make incredibly poor decisions about resources, time, and instruction.

In the short-term, there is no Nirvana here. This is, in part, why I’ve been drawn to charters: they allow for both educational expertise (charter founders) and choice (families selecting schools).

However, charters are still a tightly regulated and narrowly defined educational vehicle, and I understand their limitations.

This is why I’m excited about Education Savings Accounts.

Over time, I’m fairly confident that families will become better consumers faster than government monopolies will become excellent providers of education.

But you’re fooling yourself if you think either side is starting from a great place.

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To summarize the above: regulate your deregulation.

Nevada has a chance to be a part moving our nation forward by creating the educational sector of the future.

But they need to get the early years right.