The Interrelationship Between Public and Private Prisons: Does the Existence of Prisoners Under Private Management Affect the Rate of Growth in Expenditures of Prisoners Under Public Management?*

Published by the Association of Private Correctional and Treatment Organizations (APCTO) http://www.apcto.org

This study investigates the relationship between (i) the fact that a particular state houses some of its prison population in prisons that are privately owned or operated and (ii) the growth in costs per prisoner in publicly operated prisons. The core objective has been to determine whether the existence of prisoners under a states jurisdiction that are held in private facilities can have a beneficial effect on the rate of growth in expenditures on publicly held prisoners.

The hypothesis is that states that allow prisoners under their jurisdiction to be held in private facilities will experience significant cost savings in the per diem cost of public prisons. Anecdotal evidence supports this hypothesis. Recent studies on private prisons have directed their focus away from actual dollar cost differences between the public and private sectors. Instead, researchers have noted that one effect of the introduction of private prisons might be that their existence helps control the cost of public prisons. The insight of these studies has been that privatization can offer increased innovation, access to expertise, improved quality, and enhanced accountability. That is, much of the cost savings from the introduction of private prisons stems from competition, and that competition has beneficial effects on the entire system, as workers and management throughout the system respond to privatization. As one commentator has recently noted, private prisons are a promising avenue for the future development of the prison system.