A supporter of PCE recently sent me a great paper written by Caroline Hoxby about the economics of school choice programs. It's a great read. Hoxby explains well why some school choice programs around the world work better than others. The paper was written in 2006, but the insights are still very much apropos. You can read the paper here.
The core of her insight is that the best school choice programs give schools the opportunity to manage themselves independently, allow the money to follow the student (although providing more money to meet the greater needs of some students in certain cases), and allow schools who are attracting more students to grow and expand. Choice in itself is good, but it can most effectively be used to drive quality in education only when the right conditions are in place.