Monday, October 12, 2015

Are Private Prisons Really Privatized, and Is Focusing on Them Addressing Mass Incarceration?

While understandable given the high crime rates in the 1970's, it's unfortunate to see in hindsight that the "tough on crime" mentality of law enforcement in the 1980's caused so many unintended consequences. It's even more unfortunate to see that mass incarceration is still ongoing to this day as a result of those policies from more than thirty years ago. There are those on the Left who think that if we eliminated the private prisons in this country, it would solve the problems of mass incarceration because they have the perverse incentive to keep the prisons as full as possible. After being accused of taking political contributions from private prisons, Hillary Clinton went on record this past Friday saying that she would like to eliminate private prisons. Bernie Sanders has also stated that he would like to introduce legislation to eliminate private prisons because they are morally repugnant.

Before jumping into the discussion, there are two facts to help contextualize the discussion that not even the Left-leaning Vox could deny. One is that corporations did not cause mass incarcerations. Private prisons were a government response to dealing with overcrowded prisons. The second fact is that private prisons account for a small portion of the overall American prison system. Between state and federal prisoners, private prisoners hold 137,220 prisoners, which account for 9 percent of the overall prisoner population. While I think that having the highest global prisoner population per capita in the "land of the free" is extremely problematic, it does show that the private prison system has relatively small sway over the overall trend of mass incarceration. Even with those facts in mind, should we still have a privatized prison system?

You might be thinking that my answer is in the affirmative simply because the prisons are referred to as "private prisons." Yes, it is true that I have a preference towards privatizing because when examining between privatization and government ownership of a good or service, the private sector outperforms the public sector the vast majority of times. However, what I would like to touch upon at this moment is whether the prisons in question are truly privatized. Essentially, the private prisons, also known as for-profit prisons, are places where individuals are confined or incarcerated by a third party that is contracted by a government agency. These private prison companies enter into a contractual agreement with the relevant government agency, who in turn pays the company on a per diem or per mensem rate for each prisoner. Even if the private company manages and operates the facilities, the state is still in charge of contracting and funding the private prison companies, as well as selecting the inmates put in prison, selecting the type of facility to be contracted out, and overseeing the contractor's disciplinary practices. While the state is still involved in the private prison system, we cannot consider these prisons to be truly privatized because the government is merely contracting out a service that is already a government monopoly. The more accurate term for such an arrangement is a public-private partnership (PPP). A PPP can be implemented with such goods and services as national parks, fisheries, charter schools, or air traffic control. The success of PPPs are more mixed because it depends on which aspects of the private and public sectors are mixed into a given industry. How does that play out for the "private" prison system?

Trying to conduct a cost comparison between public prisons versus their more privatized counterparts remains an elusive task. The Government Accountability Office has pointed out that even if one is able to find two prisons with comparable demographics, it still remains difficult because of data collection and cost measurement methodology differences. What further differentiates the two is the different accounting procedures render the project more arduous. As such, any attempt to determine which prison system is more cost-effective is tenuous at best. Even so, some have tried. A meta-analysis from the Utah Criminal Justice Center had mixed results. Four of the eight studies found that private prisons found cost savings, while the other four came up with negligible differences (Lundhal et al., 2009). A survey of 30 state correctional agencies shows that private prisons are lower in cost than public ones by 28 percent. The Sentencing Project actually does not find significant cost savings in the "private" prison system (Mason, 2012), while the Reason Foundation has found cost savings (Segal and Moore, 2002). The same ambiguity can be applied for performance metrics between the two prison systems. None of this even gets into how for-profit prisons fare in developing countries (Allen and English, 2013).

Whether it is a private prison or public prison, the perverse incentive system to keep many inmates in prison, especially once it has become acceptable policy, remains a part of both prison systems because both systems experience self-interested, pro-incarceration advocacy. Regardless of whether the prisons are private or public, drafting contracts on a numbers-based policing model only fuels the rent-seeking for mass incarceration. We need to focus more on lowering recidivism rates, which is why it's nice to see that The Council of State Governments produced a great report on targeting recidivism. If we are going to draft up contracts for private prisons, the least one should do is make it based on the rate at which a prison can reduce recidivism rates. We can experiment with performance contracting models, much like in Pennsylvania and the United Kingdom, so that reduced recidivism becomes the incentive for contracted companies instead of being incentivized to bring in more prisoners for the sake of lining one's pocket with money.

If we want to tackle the issue of mass incarceration at its core, we need to go beyond prison contract reform. Much like the Reason Foundation brings up in its 2014 Annual [Prison] Privatization Report, we have to deal with criminal justice reform on a broader scale. Just a few ideas of how to tackle the issue of mass incarceration: modernizing federal drug sentencing policies, make the Fair Sentencing Act of 2010 retroactive, abolish victimless crime laws so that prison is for the violent criminals only, raising the "good time credit" limitvictim-offender mediation, or creating a continuum of care using private prisons. If we implemented some or all of these policies, it would do a lot more help than the facile approach of Sanders or Clinton.

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