Privatization of prisons has been a growing phenomenon in the U.S. Proportionally (all figures date from 2011) this country has four times as many prisoners as Israel, six times as many as Canada or China, eight times as many as Germany and 13 times as many as Japan. With just a little more than 4 percent of the world’s population, the U.S. accounts for a quarter of the planet’s prisoners and has more inmates than the leading 35 European countries combined. Almost all other nations with high per capita prison rates are in the developing world.
Private investment is naturally attracted to serving a large market which in this case has shown “healthy” growth with the U.S. prison population having doubled over the last 15 years. The public policy justification for the trend to privatization of prisons is that private contractors will be more efficient than the public operation of prisons and will save money for public sector budgets.
The problem with this perspective is that the extensive privatization of prisons creates a constituency that is motivated as every company is and should be by the search for profits and continued growth in their markets, i.e. in this case the number of prisoners. But the goal of public policy should be to reduce the size of the prison population by pursuing initiatives on many fronts (legislation, security, rehabilitation opportunities and programs that help people in need through no fault of their own) that will diminish the number of criminal acts and actors. Successful outcomes of these initiatives should lead to reductions in the numbers of incarceration facilities, thereby running counter to the interests of the private operators of prisons.
So are there ways to pursue the goal of public policy while introducing incentives for efficiency and cost minimization in prison operations that are or should be part of the DNA of private sector companies without the inherent conflict of priorities between this goal and the goals of private operators of prisons? I believe there are. The key lies in introducing incentives for public sector staff that reward them individually and collectively for improvements they succeed in making in the operation of the prisons where they work. This will not be easy and as is often the case the devil lies in the details. But it is a better alternative than an increasing reliance on privatized prisons. Privatization of public sector-owned and run activities is justified in many countries in many sectors of the economy (e.g. telecommunications, steel, mining etc.). But it is not for prisons.

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