Privatization: Issues of State and Local Public Infrastructure
Ann Arbor, November 22, 2002
Anne Morrison Piehl, Harvard University and NBER
Private provision of prison services (such as food service, medial care, and treatment programs) is widespread and widely accepted. More controversial is the private administration and/or ownership of facilities providing secure confinement. Arguments in favor of privatization generally start from efficiency: cost savings from private operation or from the competition it provides to public facilities. Arguments against privatization take two forms: the state should not be in the position of contracting out authority to punich individuals who have offended against society or, government oversight does not provide sufficient regulation. By 2001, almost six percent of state inmates were held in private facilities, with nearly all of the growth in private prisons taking place recently. States' use of private facilities varies tremendously. The ways in which states have privatized the custody of their offender populations provides some insight into the (real or perceived) benefits of privatization. In particular, it appears that states often use contracting to accomodate new or fluctuating need for prison space.