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Changing the Guard
Private Prisons and the Control of Crime

Virtually unheard of twenty years ago, private prisons are now a big business not only in the United States but increasingly in Canada, England, Australia, South Africa, and elsewhere. Although private prisons now house approximately 120,000 prisoners in the United States, the private sector is still small relative to the total prison population of some 2,000,000 prisoners.

In the United States, private prisons have grown because of prison overcrowding and the desire of the states and Federal government to cut costs. Numerous studies now exist demonstrating that private prisons have operating costs approximately 15 percent lower than equivalent public prisons. In addition, private prisons can be located and built more quickly than public prisons.

Although there was initially a concern that cost-savings might come at the expense of quality, the data has not borne this out. Whether in terms of physical quality of the prison, legal access, food quality, and other measures, private prisons have been found to be as good as public prisons and sometimes better. Thus after surveying some 333 indicators of quality at two public and one similar private prison, noted prison-privatization expert Charles H. Logan (University of Connecticut) concluded that “the private prison outperformed its governmental counterparts on nearly every dimension.” Surveys of inmates also find a preference for private prisons because they tend to control violence, committed by staff and prisoners, better than at public prisons.

The Economics of Prisons

Private prisons cannot be evaluated without also evaluating prisons and punishment more generally. Economist Kenneth Avio (University of Victoria) opens Changing the Guard with an analysis of the broader questions surrounding the private-prison debate: Does prison pay? What do we know about punishment and recidivism? How large is the crime-deterrence effect? What is an optimal prison sentence? Are too many people in prison or too few? Avio concludes that, on average, the criminal justice system “works,” but the system could be improved dramatically if attention were focused on the small number of criminals who commit the vast majority of crimes. Drug offenders and other non-violent criminals are jailed far too much.

Avio focuses his survey on the economic analysis of crime but concludes that we need a more comprehensive understanding of human nature than that depicted in the economic model. “We know little about how and why a shared moral order is developed and maintained. This change in perspective . . . suggests a return to a relatively neglected part of the research program Adam Smith laid out in 1791. Analysis of the social institutions that inculcate self-command and that otherwise function as civilizing forces in our society, should be part and parcel of the research strategy social scientists adopt to help understand and control crime.”

Correctional Privatization: Past, Present, and Future

Private prison authority James Parkey (Corplan Corrections) provides the empirical context for understanding the debate over private prisons, examining their historical origins, present status and future prospects. Intriguingly, Parkey notes that many aspects of the criminal justice system have long been privatized. Many states, for example, house one-third to two-thirds of their interned juveniles in private facilities. Seen in this light, opposition to private prisons is difficult to understand.

Parkey argues that the full benefits of privatization are threatened by “governmentalization,” i.e., the tendency of contracting agencies to require contractors to run things exactly as a government bureaucracy would, only cheaper. In some cases, private prisons have even been required to have the same menus as their government counterparts! The real benefits of privatization come when private firms are allowed to innovate to find new and better ways of doing things. Flexibility in contract design, however, raises the possibility that private firms will take advantage of the government. Addressing these issues may require careful design of contracts and more attention paid to monitoring outputs rather than inputs. Further diffusion of “best practices,” such as performance incentives and on-site compliance monitors that have developed in twenty years of contracting, can manage these twin difficulties.