One thing that is little confusing right now in education is sorting out discussions of public policy and philanthropic policy. I don't think that, for example, there is a serious public policy discussion about paying students for achievement on test scores. That is, local governments aren't going to cut other programs or raise taxes to start giving cash to poor kids for doing what they should ostensibly be doing anyhow. On the other hand, it is a lively topic in philanthropic policy. Philanthropy doesn't have to worry about whether or not it is politically possible to fund a measure. They only need it to be permitted.
For business-minded philanthropy, direct payments to kids for higher test scores makes a lot of sense. It is consistent with their general view of human nature and the philosophies of schools they like, such as KIPP. It recognizes the extent to which education can simply be a bottomless pit for their money. How many tens of million dollar projects literally have added up to nothing? Right now in Providence we've got Broad Foundation trained administrators busily undoing early 21st century work funded by the Gates Foundation. How many millions were spent training teachers who left their jobs to use curricula which were dropped (or never even adopted) in small schools that are being re-aggregated? If they can prove that paying kids X dollars raises scores Y points, and Y is greater than 0, that might be the least painful option for philanthropic spending they've come up with yet.
My point here is not that this is a good idea (although surely we've been saddled with worse), but just to highlight how confused the whole discourse is at this point. So much of the conversation is driven by the needs and interests of philanthropy that we're losing track of where private and public interests and obligations begin and end. The most dramatic example of this is in DC, where, without much apparent controversy or discussion, contract negotiations are taking place based not on money in the city coffers, not on democratically determined long-term priorities, but based on philanthropic initiatives. This is a very weird way to run a government.