This monograph on charter schools and reform contains four chapters. The first chapter ("The Unfinished Goal and the Role of Interest Groups") discusses the history of the charter movement, its role, benefits, shortcomings, and the opposition to the movement from teacher unions. Charter schools have attracted support across the political spectrum in theory; however, this support varies on the operational level. Charter schools cannot offer truly innovative programs because they remain bound to public authorities; they have to be more independent and less regulated than they are in many states. Chapter 2 ("California: The Uphill Battle") discusses California's dismal educational record during the 1990s and the struggle to enact charter legislation in the state. The most serious problem in California's new law was funding. All categorical funding had to be negotiated; however, individual charter schools received no money directly from the state. Instead, they had to rely on districts to distribute state funding. The chapter goes on to discuss state bureaucracy and union intransigence. Chapter 3 ("Arizona: The Free Market Model...With Strings Attached") compares Arizona's and California's education demographics, which are quite similar in many respects. However, there are important differences between the two states, principally surrounding right-to-work issues and the emergence of Arizona's charter-school laws that sought to avoid the difficulties encountered by California. The final chapter ("Charter Schools and the Failure of Real Competition") discusses teacher unions and their fight against deregulation; the chapter also describes the voucher system in several states, the disorganization of the charter movement, and the fact that the movement has yet to trigger significant responses from local school boards and other officials. (Contains 189 references.) (DFR)