Clear and convincing evidence from the United States and elsewhere shows that privatizing criminal correctional facilities results in better public service at a lower cost than government operation. When the modern correctional privatization movement started, it was widely believed that any private role would be limited to small facilities housing low-security prisoners. Today, however, it is common to see contract awards for facilities with rated capacities of between 1,000 and 2,000 prisoners and for prisoners requiring medium or high security.
A growing body of research finds that contracting out corrections reduces costs, improves service quality and yields other benefits as well. Critics who initially argued that contracting with private companies could not save money have been proved wrong.
First, the fact that contracts exist implies that the contracting agencies are confident that cost savings are being realized. Many statutes even require tangible evidence of savings before contracts can be awarded.
Second, private sector fringe benefits, especially retirement contributions, are less generous for private employees than for government employees. Third, the private sector does not have the costly bureaucratic requirements that government imposes on itself in employee hiring, firing, promotion and procurement of goods and services. Fourth, private prisons are designed to operate efficiently with fewer personnel in a way public prisons are not.
Faced with evidence of cost savings, critics then argued that "you get what you pay for," alleging that services were substandard. Wrong again. Government agencies overwhelmingly renew contracts with the private operators. Since the mid-1980s, only one facility - in Zavala County, Texas - has been closed for inadequate performance. The best data fail to reveal a single contract awarded to any firm currently in the industry that has been terminated or not renewed for inadequate contract performance.
Also, not a single private facility is operating under...