Purpose: The paper seeks to apply the theory of the democratic deficit to school-based management with an emphasis on Australia. This theory was developed to examine managerial restructuring of the Australian Public Service in the 1990s. Given similarities between the use of managerial practices in the public service and government schools, the authors draw on recent literature about school-based management in Australia and apply the democratic deficit theory to it. Design/methodology/approach: This paper is conceptual in focus. The authors analyse literature in terms of the three components of the democratic deficit--i.e. the weakening of accountability, the denial of the roles and values of public employees, and the emergence of a "hollow state"--and in relation to the application of this theory to the Australian Public Service. Findings: A trend towards the three components of the democratic deficit is evident in Australia although, to date, its emergence has not been as extensive as in the UK. The authors argue that the democratic principles on which public schooling in Australia was founded are being eroded by managerial and market practices. Practical implications: These findings provide policy makers and practitioners with another way of examining managerial and market understandings of school-based management and its impact on teachers and on students. It offers suggestions to reorient practices away from those that are exclusively managerial-based towards those that are public-sector based. Originality/value: The value of this paper is that it applies the theory of the democratic deficit to current understandings of school-based management. (Contains 5 notes.)