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Pros and Cons of Privatization of Prison Systems in the United States


This paper explores whether it is better to move the Federal prison system into the private sector or to retain it as a federal government. These schemes have advantages and disadvantages, but the most striking problem is whether private-sector companies that run prisons can either remain in business or disappear overnight due to insolvency or by another larger company buying out. There is actually an oligarchy of four or five companies that run prison systems across the country. This does not leave much room for a smaller actor to get into the business, particularly as expenditures are usually the same for both public and private sector facilities, as based on federal standards in service provisions. Ultimately, it will depend on what is the overriding issue that is most important and must be met.


In the American society, where an ever-burgeoning group of people are being detained behind bars for a variety of criminal issues, the result has been a larger strain on prison systems. While Federal systems have certainly felt the strain through annual budget reduction, private sector prisons are finding even more problems in ways to fund their own systems, according to the Federal standards required for maintaining these facilities (Allen & Sawhney 2009). At the heart of the problem is the fact that the inmate ratio exceeds the corrections officer ratio at a rather large pace. Some efforts are now being made at the Federal level to move some criminal actions to a monitoring status rather than an incarceration status so as to alleviate the overcrowding seen at most facilities (Miller 2010). This also leads to the question of whether there should be more private sector prisons rather than Federal systems, as has been the general trend up until now.

Pros and Cons of Privatization of Prison Systems in the United States

  1. As a public administrator, when reviewing the arguments for and against keeping the jails in public hands, two arguments stand for keeping the jails under public administration. The first argument is the higher quality of those employed to manage the facility, as well as those corrections officers who oversee the prisoners (Peak 2012). These employees tend to be more career-orientated and not so likely to create large staff turnovers, thus causing added expenditures in training new personnel to take the empty positions. Working through the state system provides correction workers with better benefits and there is less turnover of the staff.
    • A) Correctional officers undergo a fairly rigorous training process on how to do their duties while interacting with the prison population (Dempsey & Forst 2013). More focus is now put on retaining staff and promoting open communication lines, mentoring with senior partners, encouraging professional pride and growth, as well as efficient wage and benefit payment (Peak 2012).

            In alignment with the state employees, who observe the state guidelines in handling inmates through their daily processes, rehabilitative services, which are provided to inmates as part of their incarceration, also have state guidelines to be observed (Culp 2012). The government-run facility will therefore work based on the state guidelines for the treatment of inmates and will also ensure that the public is also covered when participating in rehabilitation services (Allen & Sawhney 2009; Peak 2012). Therefore, state requirements must be met, especially with regard to the prisoner’s well-being,

    • B) The second argument for keeping the program of corrections under public administration is the financial aspect of the construction and operation of correction facilities. Research (Culp 2010) has shown that while private-sector facilities, run by companies who allude to the money-saving benefits of using private-sector facilities, often tend to cost more as the years go by and eventually cost as much as state-run facilities, but with less reliable results in services and workers. (Culp 2010; Cordner & Scarborough 2010). Indeed, prisoner care is no better in private institutions than in state-run facilities. There is also a much higher turnover in staff in the private institutions because of less development of the talent pool and also the lower benefits provided as compensation (Peak 2012).

            Rehabilitation services, even those used by state institutions, do not operate or provide high outputs in satisfactory outcomes. The problem seen here is that contracts may be written differently than those conducted with state facilities, thus creating a lower level of service (Peak 2012). The incarceration process is, in fact, operated by the government because it is the only entity which governs, by law, how prisoners will be held and what rights they have, along with the services which must be provided (Culp 2010). While private sector companies may state that they can provide such services at lower fees, in truth, these will all cost the same because of government mandates in operations. In truth, there cannot be any real competition as regards the provision of prison system infrastructures because it is one of the few areas that does not do well under free market criteria. Certain government standards must be met in the services provided for the prison system and these are relatively set in stone, thus it is an artificial market (Culp 2010). This, in turn, has led to an obviously limited market for those providers as only the government can purchase these services as the government is the only authority to detain people. Over the years, since the first private company came into service in providing facilities, this has led finally to only four or five companies controlling the private sector in providing these facilities, creating an ‘oligopsony’ (Culp 2010; Peak 2012).

  1. From the viewpoint of a private sector correctional facility manager, the opposite is true as to how efficiently these services can be provided.
    • A) Particularly in a recessive era, where jobs are concerned, there is a larger pool of employees to choose from, with more people being out of work. This means that private sector employees will cost less because they do not receive the same long-term government benefits as those in public sector positions. For example, pension plans can be reduced or eliminated and corners cut in education costs for new employees coming in, even though there are still government regulations to be observed as to the level of the education process (Miller 2010).
    • B) Additionally, in the early years of private sector implementation of facilities and provision of services, only states had been contracting with private companies to provide the design and building of facilities and in contracting out with service providers for rehabilitation, food and transportation services. Since the year 2000, the Federal government has taken a more active participation in conducting these arrangements, partially over concerns that required governmental regulations be observed as regards any provisions of facilities and services (Miller 2010).

           Accordingly, the evidence that private sectors provide equal or better services in correctional facilities and services, is presented in the fact of how many privately-run facilities are reaching accreditation standards as opposed to public facilities. For prison facilities, private or public, to become accredited, prisons must first show that they offer quality services in education, food, health and rehabilitative programs (Miller 2010; Cordner & Scarborough 2010). There must also be low percentages of aggressive episodes between the prison personnel and those incarcerated. Safety regulations must be met for both staff and prisoners, and regulations observed in terms of security, and a safe and comfortable living environment provided for all concerned (Miller 2010). Additionally, all private prisons must meet these regulations as opposed to the state prisons and as of 2005, 10% of public prison had reached accreditation while 44% of private prisons had met those same criteria for accreditation (Miller 2010).

  1. The types of challenges that both private and public sectors may face is whether local services needed for prison facilities, such as food, health and rehabilitation, are adequate enough and meet government standards for the prison. The objective for all concerned is the ability to become accredited as an efficiently-run facility in order to continue in the business. Finances are always a concern, and getting accredited is part of maintaining financial funding (Peak 2012; Miller 2010), whether it be through private or public resources. Smaller companies that maintain facilities tend to be undercapitalized, with less experience in the business, creating a risk for being bought out by a larger corporation or else, going bankrupt. This is always a major concern when contracting with private companies rather than the Federally-funded organizations (Miller 2010).

Another problem has been the ever growing population in the prison system which has led to staffing problems when there are not enough correction officers to handle the population in a facility. Some of this has to do with certain types of mandatory sentencing criteria and also the burden of detaining larger groups of illegal immigrants into the country (Miller 2010). In 1979, the Prison Industry Enhancement Certification program, also known as the PIE Program, was created by Congress to utilize the private prison sector in order to help with maintaining the growing criminal population, thus creating the reemergence of the private prisons. In the early 1880s, the first private institutions were created to house prisoners but were later declared unconstitutional, due to the abusive behaviors against the prison population. With the passing of the Pie Program by Congress, and observance of government regulations, the private prison systems are now considered to be as good as any government-run prison (Miller 2010).

  1. If the whole jail system were to move into the private sector, then the legal issues involved would be, first, attaining accreditation within a set period of time in order to ensure that proper government standards were being met. An annual review would also need to be in place to make sure that these standards were being maintained at a government level or even higher (Peak 2012; Allen & Sawhney 2009).

Additionally, the funding process must be in place that there is always financial resources available and that there is no chance that a private institution might default, thus leaving numerous prisoners having to be moved to another facility. This is very important particularly if a prison is already overcrowded. Overburdening any jail system with large numbers of prisoners over its capacity, presents problems in having enough corrections officers to maintain peace within the population, between prisoners and between prisoners and staff (Miller 2010). While this might lead to hiring more corrections officers, it can also lead to paying higher salaries, particularly in overtime situations. One guard in California made an astounding $187,000 in one year in 2005, just from regular salary with overtime added on. In a larger picture, 2,400 officers in California made more than $100,000 in that same year (Miller 2010; Schmidt 2006).

With larger prison populations, comes the higher fees in providing more food, more rehabilitation services per prisoner, and the need for more supplies overall. Accordingly, smaller companies providing these services cannot match up to the demand and this causes them to go out of business or be bought out by larger conglomerations, leaving some four to five companies as sole providers of private sector facilities and services nationwide (Miller 2010).


When evaluating whether or not prison systems should transition to privatization, the final result is that a secure system needs to be in place, especially when it comes to financial transparency. Government oversight and audits must also be carried out to ensure that the accounting system is also correct and that there are no costs for non-existing products or workers, as has been seen in previous cases (Miller 2010).

Appropriate personnel levels must also be maintained and encouraged to stay in place through appropriate compensation, although paying overtime in many cases, is not always the answer. Job stress is usually a cause for high turnovers and this can be caused by poor management at the upper levels, and also by the conditions presented by overcrowding (Peak 2012; Miller 2010; Culp 2010). Further examination of why so many people are being incarcerated should also take place in order to find ways to curb criminal actions, so that less people end up in prison. When it is considered that nearly 1 out of a 100 people in the United States has spent time in prison (Miller 2010), then there is obviously a larger problem going on. Economic recession and loss of jobs play a large role in this problem and not much has been done to curb the losses. That is reflected in prison population growth, due to those who commit robberies and attack others, hoping for financial returns.

If it is a question of whether more institutions might be built to house the offenders, then going to the private sector may be the best way to go. It is doubtful, however, that the costs to the prison systems will necessarily be reduced significantly, particularly when there are only four or five private firms to achieve these objectives.

Allen, J.M. & Sawhney, R. (2009). Administration and Management in Criminal Justice: A Service Quality Approach.  Thousand Oaks, CA: SAGE Publications, Inc.
Cordner, G.W. & Scarborough, K.E. (2010). Police Administration. (7th ed.). Cincinnati, OH: Anderson Publishing.
Culp, R. (2010). The Failed Promise of Prison Privatization. Prison Legal News Online. Retrieved from <https://www.prisonlegalnews.org/displayArticle.aspx?articleid=23838&AspxAutoDetectCookieSupport=1>
Dempsey, J.S. & Forst, L.S. (2013). An Introduction to Policing (7th ed.). Independence, KY: Cengage Learning.
Miller, D.W. (2010). The Drain of Public Prison Systems and the Role of Privatization: An Analysis of State Correctional Systems. Discovery Guides, ProQuest. Retrieved from <https://www.csa.com/discoveryguides/prisons/review.pdf>
Peak, K. J. (2012). Justice Administration: Police, Courts, and Corrections Management, (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Schmidt, S. (2006). Prison Guards Lock Up Bundle in OT Pay. Union Tribune San Diego Online. February 28 2006. Retrieved from <https://www.utsandiego.com/uniontrib/20060228/news_1n28guards.html>

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