This study examines whether new private schools are innovative, drawing on theories of markets and institutions. Choice advocates claim that markets spark innovation, while institutional theory suggests that isomorphic forces will limit novel school forms. Using qualitative data form third sector private schools in Toronto, three hypotheses about the impact of markets on educational organization are examined: (a) they reverse tendencies toward isomorphism as schools develop client niches; (b) they allow schools to weaken their formal structures; and (c) they force schools to more closely monitor their effectiveness. Substantial evidence exists for the first hypothesis, partial evidence for the second hypothesis, but little evidence for the third. Overall, new private schools are characterized by: small classes, unique pedagogical themes, personalized treatment of clients, and some pragmatic responses to limited resources. Their operators sometimes feel restricted by parental demand, but are able to retain a loosely coupled structure by embracing consumerist understanding of accountability. This essay concludes with a discussion if implications for market theory.

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