Recent social policy reforms have sought to overcome the limitations of "First Way" strategies emphasizing the welfare state and "Second Way" approaches advocating markets. Scholars and policymakers instead have begun to explore optimal synthesis of the public and private sector in a new "Third Way" of leadership and change. According to one line…

The article examines changes in British funding policies under the Education Reform Act of 1988 to stress competitive bidding by higher education institutions. The methodology and theory of the new approach are explained, as is the concept of equilibria in decision theory underlying the approach. Noted also are responses of institutions. (DB)

Based on an extensive review of the literature, implications for school leadership are examined in the context of four government approaches to accountability-driven educational policy: market, decentralization, professionalization, and management. The article concludes with a discussion of four suggested areas for future leadership research. (PKP)