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The legacy of neoliberal education reforms has shaped policy leaders’ focus on maximizing efficiency and profit at the expense of democratic engagement, in which local elected officials have been blamed for their financial ineptitude while structural inequities remain. These racialized assumptions are most explicit in the “takeover” of U.S. school districts by states and municipalities, where local school boards and central office oversight have been suspended in cities with majority Black leadership like Newark, New Orleans, Detroit, and Oakland (Morel, 2018). However, in recent years, the American political climate of education reform has shifted due to the growing community resistance to school closures, philanthropic experimentation, and governmental neglect (Ewing, 2019). To sustain market-based reforms amid this resistance, policy entrepreneurs seek alternatives to the competitive, high-stakes accountability mechanisms that dominated the past generation (Lipman, 2013). A coordinated network of policymakers and business leaders have pursued a different strategy: “community engagement.” However, the assumption that engaging communities in market-based strategies will produce more equitable educational conditions and learning outcomes warrants critique and reframing. I use a Gramscian analysis of hegemony (1971) to examine this shift from coercive practices of financial audits to building consent through the district’s formal engagement strategies as tools to manage public dissent around divisive decisions. Located in the San Francisco Bay Area, California, the Oakland Unified School District (OUSD) is a prime case that demonstrates how democratic mechanisms serve as the vehicle to manufacture public consent for the redesign of local school districts by way of marketization. OUSD is an ideal site in which to study these dynamics as a mid-sized district characterized by its community activism, neighboring Silicon Valley tech industry, and philanthropic investment in public policies that are central to neoliberal experimentation. Drawing on qualitative data from 1989-2019, I find that a manufactured crisis facilitated the 2003 state takeover of OUSD to further advance austerity measures and audit processes that served as racialized forms of fiscal surveillance. When community resistance to these measures intensified, district actors shifted to tactics of “engaging” with the community through a portfolio strategy to manage school choice options through public-private governance (Bulkley et al., 2010). Furthermore, I explore the role of a critical, but underexamined state-funded audit agency, the Fiscal Crisis and Management Assistance Team (FCMAT), in suspending democratic representation of the Oakland school board in the name of “fiscal vitality” and “accountability.” The new democratic and participatory mechanisms being used by school districts are not a concession to communities, but rather a cooptation strategy to garner consent amid community pushback to reform efforts. This paper contributes new insights into local and global debates on educational privatization by critically examining the role of parastatal audit agencies in shaping community support for public-private education governance along with tracing the shifting tactics of elite policy actors.