"The private sector is motivated by profit and efficiency" (Eric Anderson)

    Prior to 1930, much of American corrections was privatized.  States and municipalities would either lease out their convicts to private businesses or put them to work in chain gangs building roads and railroads.  Many of the early prison industries during the Industrial Era were also privatized.  Much of this is an odious history, but it turned a profit for everyone concerned (except the inmates).  The media never covered the fact that nearly 50% of inmates died due to the harsh conditions of chain gangs.  Today, institutional corrections is far less privatized, but few people realize the extent to which the treatment function is almost completely so.  For example, when a probationer gets probation, very often they have to attend some kind of alcohol or drug treatment program which is private.  Large numbers of private sector programs exist under contract with state and local governments.  Many of the so-called "boot camps" which sprung up in popularity during the 1980s were private.  Prior to 1980, there was not a single privatized jail or prison anywhere in America or abroad

    All that changed during 1983 when the private prison movement started in Nashville, Tennessee.  That year, Corrections Corporation of America (CCA) was formed and it rapidly grew to the point that, today, over 60 private prisons exist across 32 states.  States that are big on private prisons include (in rough rank order): Texas, Florida, Oklahoma, California, Colorado, Tennessee, New Mexico, Alaska, Wyoming, Kentucky, Montana, and Georgia.  Overall, private prisons hold 7% of the nation's prisoner population.  Granted, this does not seem like a large number, but the movement is growing.  As of late, the private sector has wisely decided to focus on the low end of the spectrum, such as residential treatment facilities, short-term detention centers, and community corrections facilities.  The main problem that big private prisons have is the excessive cost of liability insurance premiums.  Governments self-insure as a normal part of risk management where catastrophic events are uninsured and low-cost likely events have some money set aside.  Nonetheless, the big private prison industries, like CCA, the GEO Group (formerly Wackenhut), Cornell Companies, and Management and Training Corp., manage to be quite profitable for their shareholders.  Ten other corporations are involved in the private prison industry.  Australia and England make extensive use of private prisons.

    Privatization in corrections is not without controversy.  Skeptics were commonplace about the possibility to run a maximum-security prison privately, but CCA opened up a privately-managed one in 1992.  Private prisons are typically well-staffed and well-equipped, and have an extraordinary safety record. Critics argue that if they were allowed to engage in "cherry-picking" the most well-behaved inmates, they too could have well-run prisons.  The most significant question is whether the state should delegate its powers (like it does with postage stamps and mail service) to private enterprise. Privatization, in the broadest sense, is the transfer of assets or service from the tax-supported and politicized public sector to the entrepreneurial and competitive markets of the private sector. It is assumed (and sometimes proven) that the private sector exacts a toll from the inefficient for poor performance, compels the service provider or asset owner to concern himself with the wishes of customers, and spurs a dynamic, never-ending pursuit of excellence -- all without any of the political baggage that haunts the public sector as elements of its very nature.  Arguments can be made for and against private prisons, as follows:



(1) it costs less than a regular prison
(2) it motivates the employee work force
(3) it creates a safer environment
(4) it enables inmates to make a profit and pay into restitution funds for victims
(5) it raises more taxes for the state
(1) there is no guarantee standards will be upheld
(2) no one will maintain security if employees go on strike
(3) the public will have regular access to the facility
(4) there would be different inmate disciplinary procedures
(5) the company would be able to refuse certain inmates
(6) the company could go bankrupt
(7) the company could increase their fees to the state


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Blakely, C. (2005). America's Prisons: The Movement Toward Profit & Privatization. Boca Raton: Brown Walker.
Durham, A. (1989). "Origins of Interest in the Privatization of Punishment: The 19th and 20th Century American Experience" Criminology 27:107-139.
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Last updated: Aug 28, 2011
O'Connor, T. (2011). "Private Sector Prison Systems" MegaLinks in Criminal Justice. Retrieved from accessed on Aug 28, 2011.