J
jarhead
To privatize or not to privatize is the question facing the US prison system.
Introduction
More than 30 states have experimented with private prisons, with mixed
results. The viability of establishing private prisons has been debated in
many state legislatures. While private prisons hold promise, many questions
remain. In the short time I have, I will try begin with a brief look at the
trends in privatizing prisons across the country, address the question of
whether or not prison privatization saves money, analyzes politics and
ideology as potential determinants of decisions to privatize prisons, and
concludes with a brief summary in light of the evidence.
Trends in Prison Privatization
Shortly after the U.S. Congress enacted the Percy Amendment in 1979 that
legalized prison privatization, Texas, in 1983, became the first state to
privatize prison facilities. By 1985, Florida and Tennessee had joined Texas
in prison privatization, and today, 158 private correctional facilities are
operating in 30 states, Puerto Rico, and the District of Columbia (Bureau of
Justice Assistance, 2001). Prison privatization has grown considerably during
the past decade; the capacity of privatized prisons grew from just more than
20,000 to almost 143,000 in the past 10 years (see, e.g., Chi, 1998; Thomas,
2001). It should further be noted that most private correctional facilities
tend to be concentrated in the southern and western United States. Texas has
the most facilities (42) followed by California (22) and Florida, Oklahoma,
and New Mexico (each with 8; see Bureau of Justice Assistance, 2001; Thomas,
2001).
Although steeped in “public choice†rationalizations to save costs through
competitive bidding, privatization may be rooted more in the sociopolitical
atmosphere that emerged from the antigovernment populism of the Reagan
presidency. The privatization of prisons has not only led to significant
changes in policy making and the management of prisons, but it has also
generated widespread concerns that incarceration has become a profit-making
industry, which in turn strengthens calls for policies on mandatory minimum
sentencing that keep the prison industry growing.
The majority of research on privatization has tended to focus on questions
of efficiency; in other words, is the private sector able to provide public
services at a cost savings to taxpayers? Even though some of this research
shows that private firms do not always save costs, governments continue to
justify decisions to privatize on the basis of cost efficiency.
Economics as a determinant of decision to privatize state prisons
Proponents of prison privatization
The emergence of prison privatization began by advocacy coalition supporters
with a common set of core beliefs regarding the primacy of a free market
economy, the importance of limited government, and the ability of the private
sector to be more innovative and efficient than the public sector. As Moe
(1987) observed early on, among proponents of privatization, there is
a shared belief that the public sector is too large and that many functions
presently performed by government might be better assigned to private sector
units, directly or indirectly, or left to the play of the market place. The
private sector, it is argued, will perform these functions more efficiently
and economically than they can be performed by the public sector. (p. 453)
• Some studies show that the privatization of correctional facilities leads
to significant cost savings (Calabrese, 1993; Gorham, 1983; Hanke, 1987;
Morris, 1999; Segal&Moore, 2002). Studies show that not only can private
firms build prisons more cheaply (Chaiken & Mennemyer, 1987), but they can
also operate prisons more efficiently because they are not hamstrung by labor
unions or the strict purchasing guidelines that are imposed on state agencies
(Montague, 2001). These studies in essence show that through competition,
private companies can run prisons more efficiently and effectively in terms
of costs.
• As noted, the primary motivation offered by state governments for
privatizing prisons is that by relying on more economically efficient private
vendors, costs will be reduced. It is further argued that contracting out
also allows public agencies to take advantage of the efficiency and
specialized skills believed to be offered by the private sector that may be
unavailable within government (Morris, 1999; Shenk, 1995). Essentially, the
presumptions here are that privatization promotes efficiency and competition
to ultimately save costs in prison management and operations (Calabrese,
1993; DiIulio, 1987; Moore, 1998).
• Similarly, Moore (1998) states that governments make the argument that the
private sector is more efficient because private firms are driven by the
profit motive or maximizing shareholders’ wealth. Therefore, private firms
have a powerful incentive to seek innovative approaches to reducing costs.
Opponents of prison privatization
The research on prison privatization shows mixed results as to whether
privatization genuinely saves costs.
• Many studies show that the private sector cannot run prisons more
effectively and efficiently. For example, the U.S. General Accountability
Office (1996) conducted a study involving such states as California,
Tennessee, and Washington that found that private prison facilities can
sometimes be more costly than public facilities. Similarly, the Urban
Institute’s (1989) study comparing prisons in Kentucky and Massachusetts
found that the public facilities operated just as efficiently as the private
prisons.
• Other studies also show that privately run prisons do not result in cost
savings (see, e.g., National Institute of Corrections, 1985; Perrone & Pratt,
2003; Pratt & Maahs, 1999; Sechrest & Shichor, 1996). Also, in a study
conducted by a legislative oversight committee in Tennessee, there was
virtually no difference in the average daily operational costs per inmate
between public and private prisons (Tennessee Legislature Select Oversight
Committee on Corrections, 1995).
• There are also studies that argue that it is impossible to measure prison
costs with any precision, therefore making comparisons between the efficiency
of public and private prisons futile. For example, Useem and colleagues
(1996) argue that the facilities being compared tend to differ physically as
well as in their inmate populations. They also found that it is difficult to
distinguish between site-specific and systemwide costs. They conclude that
“it is impossible to say with any degree of certainty if the privatization of
corrections produces substantial cost savings†(p. 7).
• In addition, many studies found that even if there are monetary savings,
the political and legal costs remain high, thus outweighing any financial
benefit of privatization (see, e.g., Moe, 1987; Morgan & England, 1988;
Sullivan, 1987). Notwithstanding the fact that prison privatization is not
always fiscally or legally prudent, governments continue to argue that
privatizing is the most efficient way to deliver public services.
Although the polemics of prison privatization continue to run high, and
governments consistently maintain it is cost effective, few studies have
empirically examined the actual determinants of contracting out. Although the
motivations to privatize may in fact range from fiscal concerns to politics
and symbolism (see, e.g., Moe, 1987, 1988; Van Slyke, 2003), no studies have
empirically examined why governments decide to contract out their prison
services to private industry (see Cohen, 2001).
Politics and ideology as potential determinants of decisions to privatize
state prisons
Although economics is the stated reason for prison privatization, many have
argued that decisions to privatize relate more to political and ideological
factors. As Henry (1999) has argued, “the decision by policymakers to
contract out the implementation of their policies to private entrepreneurs
is, in short, at least as much a political decision as it is a managerial and
financial one†(p. 44).
Those states that are more heavily lobbied by private prison corporations
are more likely to privatize than those states that are not lobbied as
heavily. Bender (2002) shows that private companies such as Wackenhut
Corrections and Corrections Corporation of America contributed more than $1
million to 830 politicians in the 2000 election cycle. Corporations involved
in corrections for profits form their own political action committees and
organize lobbying efforts not only to encourage prison privatization
(Shichor, 1993) but also to lobby for mandatory sentencing and other
legislation that works to keep people incarcerated and is ultimately
favorable to their bottom line (Stolz, 2001). In short, private prison
corporations can influence state level decision makers to privatize prisons.
It is also expected that states with Republican-controlled legislatures are
more likely to privatize prisons than states with Democrat-controlled
legislatures or split legislatures. A preponderance of the literature
suggests that a conservative ideology among government officials can affect
decisions to privatize correctional facilities. Shichor (1995) points out
that a conservative ideology tends to be promoted more by Republicans, who
advocate reduced government involvement and more private involvement in
government activities. In general, they champion the free market idea and
believe that the market is corrected by competition (Shichor, 1995).
Patterson (1996) goes even further to argue that the policy-making behavior
of state legislators may be affected by a number of factors, especially their
party affiliation. Because privatization tends to follow a conservative
ideology, it follows that if the legislature is conservative, there is a
greater likelihood that legislation will support privatization.
Conclusion
In the end, to privatize or not to privatize is the question facing the
United States prison system. The privatization of prisons continues to be a
major source of controversy in this nation. From concerns that for-profit
prisons skimp on such services as medical care, education, food, and staff
costs to concerns that the privatization of prisons threatens to reinstitute
the link between race and commerce that existed in the 1800s, prison
privatization generates a multitude of questions by public policy analysts
and researchers from all quarters of the country and beyond.
Prison privatization decision is also about public values. Efficiency
aside, prison privatization presents some serious dilemmas regarding public
values such as safety, justice, rehabilitation, and legitimacy.
• Safety: Do private prisons pose a threat to the safety of prisoners,
prison workers, or the general public?
• Justice: Are the mechanisms of private prisons liable to distort
sentencing?
• Rehabilitation: Can the profit motive be reconciled with the need to
prepare inmates for productive lives after prison?
• Legitimacy: Is incarceration an inherently governmental function? Is it
right that profits be reaped from human imprisonment?
Introduction
More than 30 states have experimented with private prisons, with mixed
results. The viability of establishing private prisons has been debated in
many state legislatures. While private prisons hold promise, many questions
remain. In the short time I have, I will try begin with a brief look at the
trends in privatizing prisons across the country, address the question of
whether or not prison privatization saves money, analyzes politics and
ideology as potential determinants of decisions to privatize prisons, and
concludes with a brief summary in light of the evidence.
Trends in Prison Privatization
Shortly after the U.S. Congress enacted the Percy Amendment in 1979 that
legalized prison privatization, Texas, in 1983, became the first state to
privatize prison facilities. By 1985, Florida and Tennessee had joined Texas
in prison privatization, and today, 158 private correctional facilities are
operating in 30 states, Puerto Rico, and the District of Columbia (Bureau of
Justice Assistance, 2001). Prison privatization has grown considerably during
the past decade; the capacity of privatized prisons grew from just more than
20,000 to almost 143,000 in the past 10 years (see, e.g., Chi, 1998; Thomas,
2001). It should further be noted that most private correctional facilities
tend to be concentrated in the southern and western United States. Texas has
the most facilities (42) followed by California (22) and Florida, Oklahoma,
and New Mexico (each with 8; see Bureau of Justice Assistance, 2001; Thomas,
2001).
Although steeped in “public choice†rationalizations to save costs through
competitive bidding, privatization may be rooted more in the sociopolitical
atmosphere that emerged from the antigovernment populism of the Reagan
presidency. The privatization of prisons has not only led to significant
changes in policy making and the management of prisons, but it has also
generated widespread concerns that incarceration has become a profit-making
industry, which in turn strengthens calls for policies on mandatory minimum
sentencing that keep the prison industry growing.
The majority of research on privatization has tended to focus on questions
of efficiency; in other words, is the private sector able to provide public
services at a cost savings to taxpayers? Even though some of this research
shows that private firms do not always save costs, governments continue to
justify decisions to privatize on the basis of cost efficiency.
Economics as a determinant of decision to privatize state prisons
Proponents of prison privatization
The emergence of prison privatization began by advocacy coalition supporters
with a common set of core beliefs regarding the primacy of a free market
economy, the importance of limited government, and the ability of the private
sector to be more innovative and efficient than the public sector. As Moe
(1987) observed early on, among proponents of privatization, there is
a shared belief that the public sector is too large and that many functions
presently performed by government might be better assigned to private sector
units, directly or indirectly, or left to the play of the market place. The
private sector, it is argued, will perform these functions more efficiently
and economically than they can be performed by the public sector. (p. 453)
• Some studies show that the privatization of correctional facilities leads
to significant cost savings (Calabrese, 1993; Gorham, 1983; Hanke, 1987;
Morris, 1999; Segal&Moore, 2002). Studies show that not only can private
firms build prisons more cheaply (Chaiken & Mennemyer, 1987), but they can
also operate prisons more efficiently because they are not hamstrung by labor
unions or the strict purchasing guidelines that are imposed on state agencies
(Montague, 2001). These studies in essence show that through competition,
private companies can run prisons more efficiently and effectively in terms
of costs.
• As noted, the primary motivation offered by state governments for
privatizing prisons is that by relying on more economically efficient private
vendors, costs will be reduced. It is further argued that contracting out
also allows public agencies to take advantage of the efficiency and
specialized skills believed to be offered by the private sector that may be
unavailable within government (Morris, 1999; Shenk, 1995). Essentially, the
presumptions here are that privatization promotes efficiency and competition
to ultimately save costs in prison management and operations (Calabrese,
1993; DiIulio, 1987; Moore, 1998).
• Similarly, Moore (1998) states that governments make the argument that the
private sector is more efficient because private firms are driven by the
profit motive or maximizing shareholders’ wealth. Therefore, private firms
have a powerful incentive to seek innovative approaches to reducing costs.
Opponents of prison privatization
The research on prison privatization shows mixed results as to whether
privatization genuinely saves costs.
• Many studies show that the private sector cannot run prisons more
effectively and efficiently. For example, the U.S. General Accountability
Office (1996) conducted a study involving such states as California,
Tennessee, and Washington that found that private prison facilities can
sometimes be more costly than public facilities. Similarly, the Urban
Institute’s (1989) study comparing prisons in Kentucky and Massachusetts
found that the public facilities operated just as efficiently as the private
prisons.
• Other studies also show that privately run prisons do not result in cost
savings (see, e.g., National Institute of Corrections, 1985; Perrone & Pratt,
2003; Pratt & Maahs, 1999; Sechrest & Shichor, 1996). Also, in a study
conducted by a legislative oversight committee in Tennessee, there was
virtually no difference in the average daily operational costs per inmate
between public and private prisons (Tennessee Legislature Select Oversight
Committee on Corrections, 1995).
• There are also studies that argue that it is impossible to measure prison
costs with any precision, therefore making comparisons between the efficiency
of public and private prisons futile. For example, Useem and colleagues
(1996) argue that the facilities being compared tend to differ physically as
well as in their inmate populations. They also found that it is difficult to
distinguish between site-specific and systemwide costs. They conclude that
“it is impossible to say with any degree of certainty if the privatization of
corrections produces substantial cost savings†(p. 7).
• In addition, many studies found that even if there are monetary savings,
the political and legal costs remain high, thus outweighing any financial
benefit of privatization (see, e.g., Moe, 1987; Morgan & England, 1988;
Sullivan, 1987). Notwithstanding the fact that prison privatization is not
always fiscally or legally prudent, governments continue to argue that
privatizing is the most efficient way to deliver public services.
Although the polemics of prison privatization continue to run high, and
governments consistently maintain it is cost effective, few studies have
empirically examined the actual determinants of contracting out. Although the
motivations to privatize may in fact range from fiscal concerns to politics
and symbolism (see, e.g., Moe, 1987, 1988; Van Slyke, 2003), no studies have
empirically examined why governments decide to contract out their prison
services to private industry (see Cohen, 2001).
Politics and ideology as potential determinants of decisions to privatize
state prisons
Although economics is the stated reason for prison privatization, many have
argued that decisions to privatize relate more to political and ideological
factors. As Henry (1999) has argued, “the decision by policymakers to
contract out the implementation of their policies to private entrepreneurs
is, in short, at least as much a political decision as it is a managerial and
financial one†(p. 44).
Those states that are more heavily lobbied by private prison corporations
are more likely to privatize than those states that are not lobbied as
heavily. Bender (2002) shows that private companies such as Wackenhut
Corrections and Corrections Corporation of America contributed more than $1
million to 830 politicians in the 2000 election cycle. Corporations involved
in corrections for profits form their own political action committees and
organize lobbying efforts not only to encourage prison privatization
(Shichor, 1993) but also to lobby for mandatory sentencing and other
legislation that works to keep people incarcerated and is ultimately
favorable to their bottom line (Stolz, 2001). In short, private prison
corporations can influence state level decision makers to privatize prisons.
It is also expected that states with Republican-controlled legislatures are
more likely to privatize prisons than states with Democrat-controlled
legislatures or split legislatures. A preponderance of the literature
suggests that a conservative ideology among government officials can affect
decisions to privatize correctional facilities. Shichor (1995) points out
that a conservative ideology tends to be promoted more by Republicans, who
advocate reduced government involvement and more private involvement in
government activities. In general, they champion the free market idea and
believe that the market is corrected by competition (Shichor, 1995).
Patterson (1996) goes even further to argue that the policy-making behavior
of state legislators may be affected by a number of factors, especially their
party affiliation. Because privatization tends to follow a conservative
ideology, it follows that if the legislature is conservative, there is a
greater likelihood that legislation will support privatization.
Conclusion
In the end, to privatize or not to privatize is the question facing the
United States prison system. The privatization of prisons continues to be a
major source of controversy in this nation. From concerns that for-profit
prisons skimp on such services as medical care, education, food, and staff
costs to concerns that the privatization of prisons threatens to reinstitute
the link between race and commerce that existed in the 1800s, prison
privatization generates a multitude of questions by public policy analysts
and researchers from all quarters of the country and beyond.
Prison privatization decision is also about public values. Efficiency
aside, prison privatization presents some serious dilemmas regarding public
values such as safety, justice, rehabilitation, and legitimacy.
• Safety: Do private prisons pose a threat to the safety of prisoners,
prison workers, or the general public?
• Justice: Are the mechanisms of private prisons liable to distort
sentencing?
• Rehabilitation: Can the profit motive be reconciled with the need to
prepare inmates for productive lives after prison?
• Legitimacy: Is incarceration an inherently governmental function? Is it
right that profits be reaped from human imprisonment?
