The central argument of the article is that charter schools operate as a mechanism to circumvent the institutional constraints imposed on the public manager and thus restore the 'market' equilibrium in which all students have the same purchasing power. This changes the mechanisms of hiring and allocating teachers, making the system more equitable and, under certain conditions, improving students' performance. The 'market' mechanism works to equalize the performance of different types of schools and, therefore, the difference in test scores between charters and traditional public schools may not be a good criterion for evaluating the impact of the charter schools.