WHEN historians come to appraise this administration, they will remark on a rather novel event. It began eight days into the presidency of Barack Obama, when he gave the green light to a new proposal. The most significant thing about it was not the subject he wished to tackle but the means by which he meant to tackle it. By the time Mr Obama took office, there was a broad political consensus on the kind of reforms needed in K-12 education. But the federal government's power to enact such reforms is quite limited. About 94 cents of each education dollar is spent directly by the states. What was needed was for every state to independently jump up and agree that pursuing broadly similar legislation was high on their agenda. Unthinkable. Laughable even. So a new idea was proposed: what if the states were offered a series of multi-million-dollar prizes for coming up with the best reforms? Not everyone was sold on the plan. According to the book "Class Warfare" by Steven Brill, David Axelrod, the president's senior advisor, thought the teachers unions would "erupt in opposition", endangering the stimulus bill (which would fund the prize money). He also noted the disproportional dispensation of aid that would result from such a plan. But Arne Duncan, the education secretary, and Rahm Emanuel, the then-White House chief of staff, supported the plan and won the argument. The prize programme was announced in 2009. Called "Race to the Top" (RTT), it offered about $4.4 billion to states. States were rewarded for submitting the best and most credible plans for using data and student testing to evaluate teachers; for creating compensation systems based on teacher efficacy; for turning around failing schools; and for encouraging alternatives to traditional public schools. Some states would win a lot of money. Some would get nothing. What happened next surprised everyone: it worked better than anyone had imagined.

Mr Duncan says the programme has transformed K-12 education: "We have seen more change and reform in the last two to three years than in the last decade." Most surprisingly, he says there has been as much, if not more, change in the states that didn't receive prize money. He explains that the programme created space for states to do what they knew was right, but for political reasons had been unable to move on.

Of course prizes are nothing new, not even in government. They have been used throughout history to seek answers to intractable problems, from figuring out a ship’s longitude to transatlantic flight. But interest in prizes, particularly to solve government problems, has picked up. Mr Obama signed legislation in 2010 that would make it easier for agencies to conduct prize competitions, and these days government-backed prizes are cropping up everywhere (see Challenge.gov).

What makes RTT unique and laudable is that it offered an alternative to the stale debate over state versus federal power. Clearly states knew that education reform was needed, and broadly agreed on the kind of reform they wanted, but it wasn’t a priority and inertia ruled the day. It turned out that all that was needed was the right motivating factor, a nudge if you like.

It is a shame that a similar race has not yet happened in higher education. Nevertheless, it seems unlikely that future governments will ignore such a useful lever. Republicans and Democrats alike will surely make use of prize funds in order to spur state-level action. Indeed, decades from now, it isn’t too much of a stretch to think that RTT will be remembered as a real example of innovation in government and the start of a new way of doing things.

Read our briefing on how the presidential candidates will tackle schools

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