non-distribution constraint definition
non-distribution constraint means these schools have little to no incentive to cut quality to reduce costs (Hansmann 1980). In contrast, at a for-profit charter school, any cost-savings will increase profits, and this creates an incentive to cut quality in order to cut costs. Due to contract failure and the ability to earn profit, for-profit charter schools may impose greater monitoring costs to consumers and the state than either non-profit charter schools or traditional public schools. The theoretical model makes no other distinctions among the production functions of for-profit charter schools, non-profit charter schools, or traditional public schools.