Private jails, prisons and detention centers have a long history in the U.S., as far back as 1852 when San Quentin was the first for-profit prison in the U.S. (it is currently state-owned). A more recent resurgence in private prisons came in the wake of wide-spread privatization that took place during the 1980s. Prior to the 1980s, some aspects of prison management had been privatized (services), but overall management had still been held by federal and state authorities. Currently there are over 150 private jails, prisons and detention centers in the U.S.
Why Private Jails Became an Attractive Option
In combination with an overall privatization push by President Reagan, prison populations soared during the “war on drugs” and prison overcrowding and rising costs became a contentious political issue. Private business stepped in to offer a solution, and the era of privately run prisons began. Privately run prisons promised increased, business-like efficiency, which would result in cost savings and an overall decrease in the amount that government would have to spend on the prison system while still provided the same service. It was also theorized that privately run prisons would be held more accountable, because they could be fined or fired, unlike traditional prisons (although the counter point is that privately run prisons are not subject to the same constitutional constraints that state-run prisons are).
Major Players in the Private Jail Business
Private prisons are big business, with annual budgets in the billions, and there are several large players in the private prison business such as Corrections Corporation of America, the GEO Group (formerly known as Wackenhut Securities), and Cornell Companies. Corrections Corporation of America alone owns more than 65 correctional facilities in the U.S. and houses over 100,000 inmates.
The Benefits of Private Jails
While the benefit provided by privately run jails may not match the rhetoric that came with them in the 1980s, there have been benefits associated with turning control of prisons over to private companies. In a study conducted by James Blumstein, director of the Health Policy Center at the Vanderbilt Institute for Public Policy Studies, the study found that states that used private prisons could save up to $15 million a year. The U.S. Department of Justice‘s National Institute of Justice found that private prisons had a higher quality of services than traditional prisons.
The Criticisms of Private Jails
One of the most perverse incentives in a privately run prison system is that the more prisoners a company houses, the more it gets paid. This leads to a conflict of interest on the part of privately run prisons where they, in theory, are incentivized to not rehabilitate prisoners. If private prisons worked to reduce the number of repeat offenders, they would be in effect reducing the supply of profit-producing inmates.
While some studies have demonstrated that private prisons may save governments money, other studies have found just the opposite. A study by the U.S. Bureau of Justice Statistics found no such cost-savings when it compared public and private prisons. This is in part because simple numbers don’t tell the whole story. For instance, privately run prisons can refuse to accept certain expensive prisoners, and they regularly do. This has the effect of artificially deflating the costs associated with running a private jail.