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The Decision to Privatize
Richard F. Culp
Assistant Professor for the Department of Public Management,
John Jay College of Criminal Justice

The decision to privatize correctional services is fundamentally in the hands of elected officials and the staff of governmental agencies. Thus, one of the richest areas to find specific information on "how to" privatize is the network of world wide web sites maintained by the professional associations of governmental officials.

The Council of State Governments maintains a "meta-page" of sorts, providing publications, directories, links, and other resources of interest to state government officials and for persons seeking information about virtually any aspect of state government. Among the publications available (through purchase) from the CSG is Privatization in State Government: Options for the Future (1993) which presents state trends and forecasts in privatization and presents several policy and management options for privatization decision making in state government. Among the many services of the CSG is a program that recognizes and publicizes innovative ideas and new programs in the various states, many of which deal with techniques to reduce prison overcrowding and cut correctional costs in other ways. For example, they offer a publication describing Connecticut's Alternative Incarceration Program which has saved money and reduced prison bed space demand in the state.

A common function of most professional associations is the organization of conferences dealing with emerging issues and in providing training and resources for members to better position themselves for new program opportunities and funding opportunities. For example, the Local Government Council devotes a web page to their upcoming conferences where issues such as privatization of public programs, downsizing government, and creative solutions to local criminal justice problems are typically discussed.

Another "meta-page" to consult for help on the privatization decision is maintained by the National Council of State Legislatures. Like the COG site, NCSL provides a broad range of resources, directories and publications as well as updated legislative and judicial information relevant to state government. Among the publications available through NCSL is a newsletter entitled LegisBriefs which featured a January, 1996 edition on the topic of "Privatization of State Corrections Management." The NCSL also provides a link to the State and Local Insider, a news service with up-to-date governmental information on privatization.

In addition to the professional associations of governmental officials, a number of private public policy institutes have been collecting and disseminating information about correctional privatization.

The Los Angeles-based Reason Foundation, a national research and educational organization, operates the Reason Public Policy Institute (RPPI) which provides "hands-on advice for policy makers," and conducts peer-reviewed research on a number of issues, including privatization. In 1992, the organization created the RPPI Privatization Center in order to "provide practical research and analysis, how-to guides, case studies, and reports designed to inform elected officials on how to streamline government." Information available through the Center includes publications dealing with specific issues such as: designing a comprehensive state-level privatization program, designing bidding and monitoring systems to minimize problems in competitive contracting, guidelines for comparing costs between in-house and contracted services, and how to treat public employees fairly when programs are privatized. The Center also publishes a monthly newsletter entitled Privatization Watch which digests news on current privatization efforts, including corrections. Available through subscription, a sample copy of the February, 1997 issue is available on their web page. Among other news, the edition summarizes active corrections privatization efforts going on in Arkansas, Minnesota, Ohio, Tennessee, Wisconsin, and Washington, D.C. The RPPI also publishes an annual report which details world wide privatization projects during the past year. Available through purchase, the Center provides a free executive summary of their most recent issue at: Privatization 1996.

National Center for Policy Analysis (NCPA), a Republican-oriented think tank, provides a considerable amount of information on the privatization of all aspects of the criminal justice system. The NCPA has been at the center of the political issues involving a flat tax and a national sales tax. Former Delaware Governor Pete du Pont serves as the NCPA's policy chairman and the institute's Special Tax Reform Task Force is currently chaired by Jack Kemp. In the area of criminal justice, the NCPA is advocating a host of strategies involving greater use of private police, the privatization of probation and parole, private prisons, and the privatization of criminal court prosecution. The NCPA provides an overview of correctional privatization research and cites a number of pro-privatization findings, including:

• contracts with private prison firms currently cover less than 5 percent of the inmate population - but that is increasing.
• the private prison industry does $600 million in annual sales now and is growing at an annual rate of 30 percent.
• private prisons are cheaper to build and run. Savings are found to be 20 percent for private prison construction and 5 to 15 percent for private operation.
• 35 states now allow privatized prisons but only 15 have awarded such contracts.
• at the current 8% growth rate in inmate population in the U.S., two new 1,000 bed facilities must be built each week just to keep up with the demand.

In a paper entitled "Bringing Down Costs Through Privatization", the NCPA argues that "economic theory implies that if there were a formal market to buy, sell and rent prison cells, the problems of funding and efficiently allocating prison space would decrease" (NCPA, 1995). They observe that private prison industry profits have been elusive, citing the case of Pricor, Inc., an early entry into the private prison business that quit the business after sustaining a series of losses. For those government officials skittish about full privatization of their prisons, the NCPA advises that "government-operated correctional facilities could be corporatized (sic) and operated like private businesses" (NCPA, 1995).

The Mackinac Center for Public Policy, a private research institute which focuses on policy issues in the state of Michigan, publishes a quarterly Michigan Privatization Report which examines privatization experiences in various sectors of governmental services. In the Winter, 1997 edition, the Center suggests that:

Michigan might benefit from the experiences of the states which privatized first. Not only do those experiences tell us how to save money, they also suggest ways to tighten up the language of contracts so that certain problems that have arisen can be avoided (MPR, Winter, 1997).

Among the publications available for purchase through the Center is a 1989 study by Charles D. Van Eaton on "Jail Overcrowding in Michigan: A Public Problem with a Private Solution." In the study, the author cites substantial cost-savings in a dozen states where jail operation and management has been privatized and argues for the state government to give statutory authority to counties in order to permit privatization of their jails.

Since 1989, Temple University has maintained a Privatization Research Center which has completed extensive work on the issue of correctional privatization. They publish (through Praeger Publishers) a series of scholarly volumes on privatizing different sectors of governmental services including Privatizing the United States Justice System (1992) and Privatizing Correctional Institutions (1994). The latter volume includes extensive discussion of legal and ethical issues in prison privatization. While the general cost, program quality, and protection of prisoners rights issues have generally been resolved positively through empirical research, lingering "symbolic" questions remain and touch upon some of the issues raised by critics of the "prison industrial complex" (see Assessment). In quoting from Ira Robbins, an ardent critic of privatization, Michael Janus (1994) gets at the heart of public ambivalence toward private prisons:

Does it weaken that [symbolic] authority, however -- as well as the integrity of a system of justice - when an inmate looks at his keeper's uniform, and, instead of encountering an emblem that reads "Federal Bureau of Prisons" or "State Department of Corrections," he faces one that says "Acme Corrections Company"? (Robbins, 1986).

The Temple University Privatization Center is involved in on-going privatization research and provides consulting services to state and local governments considering the "go private" option. They recently completed research on privatizing Pennsylvania's liquor stores, privatizing police in the State of Kansas, and contracting out public housing operations. The Privatization Research Center (at Temple) is working on a joint proposal with the Reason Public Policy Institute Privatization Center in order to create a national database on privatization information. A copy of the proposal can be reviewed on-line at: (click here).

Another organization, the Heartland Institute, is self-described as a "nonprofit public policy research organization serving the nation's eight thousand federal and state elected officials, journalists, Heartland Members, and other opinion leaders." This pro-privatization research institute provides a large database of model legislation on a wide variety of topics including private prisons. They have created a clever on-line service entitled PolicyFax, where interested parties can order a publication to be received on their facsimile machine. One such piece of model legislation, the "Cost-Effective Management of the Criminal Justice System Private Correctional Facilities Act," can be ordered through their PolicyFax service. The bill would permit "any unit of government to contract with the private sector to perform services currently performed by a corrections agency."

Finally, another source of public policy information including prison privatization issues, which is maintained by an individual, can be found at the Public Policy Connection . In addition to a rather comprehensive assortment of links to public policy institutions, the site provides the text of several articles on prison privatization including a summary of private prisons and other issues by Peter Carlson, Assistant Director of the Federal Bureau of Prisons: Corrections Trends for the 21st Century.

Armed with this information, elected officials are increasingly turning to private entities to help alleviate the problems of prison overcrowding and shrinking government revenue. Let's now turn to examining the private prison industry by moving to the section called "Implementation."

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Richard F. Culp is an Assistant Professor for the Department of Public Management, John Jay College of Criminal Justice, 445 West 59th Street, New York, NY 10019. (212) 237-8929 email: rculp@jjay.cuny.edu