Looking inside the Black Box

This paper uses concepts from New Institutional Economics and subdisciplines within economics to describe factors related to schools' success. It draws on an exploratory study of a small sample of public and private primary schools in Chile to show that it is possible to apply the concepts proposed in the paper and that there is a positive relationship between institutional climate and school performance. The paper discusses how institutional factors influence the interactions or "transactions" among members of a school community. The institutional climate is strongly influenced by: (1) how clear the school's objectives are and how well they are understood and internalized by all stakeholders; (2) whether there are strong formal rules and effective mechanisms for enforcing these objectives; (3) whether the informal rules in the school's culture are consistent with the formal ones; and (4) the degree of trust and cooperation among members of the community. To understand these factors, five private subsidized schools in Santiago were investigated. The findings indicate that it is possible to define and measure a school's institutional climate and that there appears to be a positive association between having institutions favorable to making and upholding commitments and the quality of academic performance. (Contains 21