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Private Prisons Can’t Lock In Savings

A report from The Sentencing Project argues that a primary driver for privatizing corrections isn’t really paying off.
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Back in 1999, private prisons housed 3,828 federal prisoners in America. Now that number is more than 33,000, a more than 800 percent gain. In the state of Arizona, the comparable figure went up 285 percent in a decade, in Idaho — 459 percent.

States, and even the federal government, increasingly have looked to private companies to house and manage America’s expanding prison population. Three decades ago private lockups were nearly nonexistent in the U.S. Over this period, while the number of prisoners in the U.S. grew by 17 percent, the population inside the walls of fully privatized prisons soared by 80 percent.

Governments have turned to the idea in the face of prison overcrowding, particularly as tougher sentences and the war on drugs creates the need for more beds and cells for people who would not have gone to prison (or stayed so long) several decades ago. The idea also taps into the broader political popularity of privatizing government services, from garbage collection to toll booth operation to fighting wars.

The main argument, though, for privatization — that governments can save money by turning over prisons to the more efficient private sector — has mixed evidence to support it. A new report from the advocacy group The Sentencing Project corrals many of these cost studies into one dubious-looking heap. And, its author suggests, there are some fundamental questions to ask about whether prisons can, and should, be privatized using the same logic that governments do in handing over other services.

“The main difference when you look at it is the commodity it’s dealing with,” said Cody Mason, a program associate with The Sentencing Project and author of the new report, “Too good to be true: private prisons in America.” “If you’re dealing with toll booths, it’s for fares to get on the highway. If you’re dealing with private prisons, you’re dealing with human beings. The entire incentive for these companies is to lobby states and federal governments to put more people in prison. If you privatize garbage, no one is going to be lobbying specifically to get more garbage on the streets.”

Many states have turned to private prisons precisely because they’re trying to cut down on prison populations and the hefty costs associated with them. (States may not be scaling back their prison ambitions for precisely the reasons The Sentencing Project would like them to, but bad economic times have made strange bedfellows of sentencing reformers and budget hawks). On the whole, though, there is meager evidence that privatizing prisons makes them cheaper or more efficient.

THE IDEA LOBBYMiller-McCune's Washington correspondent Emily Badger follows the ideas informing, explaining and influencing government, from the local think tank circuit to academic research that shapes D.C. policy from afar.

Miller-McCune's Washington correspondent Emily Badger follows the ideas informing, explaining and influencing government, from the local think tank circuit to academic research that shapes D.C. policy from afar.

“There’s a huge amount of mixed research either way,” Mason said. “If you really break into it, at least what we viewed as the most comprehensive studies largely show that, at best, private prisons can save a little bit of money, and that’s not guaranteed at all.”

The U.S. General Accounting Office in 1996 looked at several state-funded studies and another that was commissioned by the federal government, all of which reached different conclusions. The GAO, which also criticized the methodology of some of the research, put it this way: “We could not conclude from these studies that privatization of correctional facilities will not save money. However, these studies do not offer substantial evidence that savings have occurred.”

Research from 2007 led by Vanderbilt’s James Blumfield (and sponsored in part by the Corrections Corporation of America and the Association of Private Correctional and Treatment Organizations) suggested that the competition provided by private prisons reduced costs at both public and private facilities. A 2009 analysis from University of Utah researchers looked at 12 different studies and concluded that privately run prisons “provide no clear benefit or detriment,” but only minimal savings at best. Ohio officials, meanwhile, have looked at their data and found cost savings, while the Arizona Department of Corrections has had less success.

Part of the issue may be that prisons just don’t have a lot of fat to cut. Private firms may save money on nonunionized workers, lower salaries and less training, and by bypassing some of the red tape of new facility construction. But at some point, Mason fears, that trimming may cut into the quality of services.

“You create this whole industry by privatizing something that government wasn’t really having a problem with before,” he said. “One problem you could point to is overcrowding. But you create this whole industry, and now it fights to live and expand, which at least in this circumstance goes against a lot of what would be best for these states and the country as whole.”

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