The aim of this paper is to analize an alternative institutional arrangement of the education sector. As we can easily observe, the recently attempts of institutional reform acoording to European standards are not the best way to meet political targets like: better education, opportunities for everyone, boost the capacity for creativity and innovation. The weak capacity of education to stimulate creativity and human capital accumulation is a (natural) consequence of lack of incentives among state-run-schools. Without taking into consideration school choice and a real competition among educational services providers, the Romanian education system will continue to have various functioning difficulties.