Proposals to privatize various government operations appear to be the hot buzz of the global economic struggle. Governments are encouraging the process of providing goods and services through contracting with various private units. Private enterprises are showing willingness to commit a huge investment in this industry. This paper explains the concept of and different views on privatization as viewed in the current markets, and attempts to define and construct the feasibility of successful prison operations by private contractors based on varied levels of involvement by private contracting agencies.
The pros and cons of privatization, in the context of contracting prison management, are discusses in details to give a clear picture of private prison management to the reader.We establish different parameters for constructing the feasibility of private ownership in various operations of a correctional facility. The system that we propose depends on the level of involvement of private companies in prison management. We argue that contracting basic management services of a prison to private vendors is not feasible for the state government. Contracting for specific services, design and construction, funding a new prison should be encouraged, depending on the infrastructure of the state and private firms willing to offer such services.
Privatization, as defined by Wikipedia Encyclopedia, is “the process of transferring property, from public ownership to private ownership and/or transferring the management of a service or activity from the government to the private sector”. Public ownership is also known as government ownership or state ownership whereas private ownership is the ownership of private property of individuals or private corporations. Privatization has occurred in multiple areas in the past: industrial units like manufacturing companies, service oriented enterprises like power generation and prisons, tangible and intangible assets like land and water, and government services like education and health.Privatization programs have taken place in the past and continue to occur in many parts of the world.
Sales of state enterprises all over the world had reached a total of $185 billion by the end of 1980s and in 1990 alone, sale of government owned units worldwide reached up to $25 billion (Goodman, 1991). Some countries like China and Vietnam privatized many state owned units after 1989 in an effort to implement a system of free market economy.International financial institutions like the World Bank and IMF have aided the privatization process in many developing countries. Argentina sold off its state-owned telephone monopoly, national airline and petrochemical company for $2.
1 billion and Mexico made similar efforts to achieve total privatization revenues of $2.4 billion (Goodman, 1991). Developed countries like the United Kingdom have also implemented successful privatization programs in the past (Wikipedia). Notable examples are the privatization of 12 regional electricity companies in the Great Britain and 7 state owned companies in New Zealand for sale money of $12 billion and $3 billion respectively (Goodman, 1991).The concept of prison management by private contractors is not a new one.
Historically, state prisons were transferred to private management after the Civil War in the United States. However, this process lead to a declining condition of prison management over time and resulted in “...a well documented tale of inmate abuse and political corruption” (DiIulio, 1989). This was mainly because of factors like weak monitoring mechanisms, a requirement from the inmates to pay while in prison to keep the private business running, low productivity levels and high inmate rates.
Moreover, there were only three known sources of prison control namely the sheriff, the magistrate and the grand jury. (Private Prisons, 2002). Hence, prison management was transferred to the state by the late 1800s. Since then, public opinion regarding the correct treatment of lawbreakers has been held consistently and private businesses have recognized a potential opportunity to venture for prison businesses. Governments in developing countries around the world were also trying to cut spending in the face of increasing debt and thus could not afford to appropriate a lot of funds to this particular area or department.
Contracting of basic utilities for prisoners held as low-security juveniles and illegal aliens had emerged out of this entire situation and private stakeholders began to press the state for a private legal status of handling correctional facilities. It was in 1987 that three States in the U.S. authorized the private operation of state owned prisons and to this date, the number of private owned companies in this business has grown to more than 64 (Burright) and over 11 states in the United States are making use of private correction facilities (Goodman, 1991). The same kind of private sector involvement has emerged in countries like Australia, Great Britain, Canada and South Africa.
The move towards private prison management stems from two major arguments. One popular consideration is the conditions of public prisons. Increased overcrowding in existing prison facilities due to high crime rates and other factors have led the government to consider the possibility to either expand the existing prison facilities or look towards the private sector to achieve the same. As an example, seven of the provinces in Canada reported over-capacity populations. These institutions house up to five inmates per cell in extreme circumstances when a typical capacity per cell is of three inmates. Double bunking in some federal prisons is a common procedure (Private Prisons, 2002).
The other factor is a combined concern for increasing crime rates and demand for longer jail sentences (Burright). This concern stems from several other factors as well, including heightened fear of victimization, increased enforcement of drug offences, domestic abuse and sex offences (Private Prisons, 2002). Consequently, sentencing laws have re-shaped over the past to meet these demands. For example, the ‘Three Strikes and You’re Out’ sentence legislation in California, that requires any person convicted of a third serious offence to be sentenced for 25 years to life in prison, has led to the “establishment of one of the largest prison systems in the world with a larger prisoner population than that of France, Great Britain, Germany, Japan, Singapore, and the Netherlands combined” (Prison Privatization, 2001).This opinion for prison expansion has contrasted with the need for ‘reform’ in jails i.e.
providing better treatment to prisoners rather than over-incarceration. Many established practitioners of prison management have held the view that such variations of political and social opinions towards new prison establishments have led to a shortage of jails and prison beds today (Burright).Proponents of private prison markets make strong arguments in favor of private contractors and the state. Logan, a prominent supporter of prison privatization has explained the advantages of private contracting of state prisons to the state in his famous book ‘Private prisons: Cons and pros’: “Imprisonment has all of the characteristics of a monopoly; quality is low, prices are high, and supply has not kept up with demand.
Contracting does not deny the government’s responsibility to provide prison services. Rather, contracting out prison services simply rejects the government’s monopoly over the provision of those services.” (Logan, 1990)The first real advantage, as seen by the supporters, is that of better performance. It is widely believed now that government has not done a good job of managing federal prison facilities. Operating costs have soared up leading to declining profits, prisoners are held in such languishing conditions which “shock the conscience, if not the stomach” (Burright).
Service contractors will be required to maintain specific performance standards or else face terminations of their contracts which will re-enforce the strengths of private prison management that is greater management flexibility, more rapid speed of response, minor innovations and major program changes, whether through initiation, expansion, contraction, or termination. Since private businesses in general, and big establishments in particular are highly visible, public concern raises increased vigilance of the operations of private prisons leading to better performance over time (Prison Privatization, 2001).Private contractors believe that they can construct and operate the correctional facilities at a much lower cost than done by the state, usually saving 10-25% of the state budget allocated for correction facilities (Burright). The government might take two to five years to build a new prison, but a private contractor can do the same thing in six months or one year. Moreover, when federal prisons are handed over to private parties, the true costs of operating and maintaining such services become highly visible thus allowing for a better budget measure to analyze, minimize and compare such costs (Prison Privatization, 2001).
Private business would be free of bureaucratic intervention or “red tape those inefficient procedures that waste tax dollars on things like open bidding on state contracts and job security for public employees” (Bates,1998). Market competition can lead to better quality of facilities and services through better training, recruiting and supervision, and reduced use of overtime (Burright). Moreover, the government can increase competitive evaluation by issuing private contracts and thus, raise the standards of quality and facilities of such facilities (Prison Privatization, 2001).Better efficiency in terms of competent management is also claimed by the private contractors. The private sector can increase the efficiency of state owned prison and new private facilities by adding the “expertise, skills, and experience of a multinational company’s ‘head office’, which will exceed that of smaller jurisdictions.” (Prison Privatization, 2001) Private owners tend to hire workers who are more experienced in corrections and have already served in the public sector.
Some private contractors also contract in nearby jurisdictions to augment prison facilities or contract out unoccupied space for the advantage of the state and the public, resulting in economies of scale (Burright). Management theory also suggests that freedom of making decisions, away from the shackles of state power, increased efficiency in matters of personnel, purchasing and creating an environment ideal for change according to different situations (Prison Privatization, 2001).Arguments against private prisons structure around the exclusivity of punishment authority of the state. The abandonment of public interest is seen as a concept greatly influenced by a drive for profiteering and economic domination. Harding gave the most appropriate explanation in his book ‘Private Prisons and Public Accountability’: ".
..private operation of prisons and jails can be seen as an extreme test of limits of privatization, because the administration of criminal justice, and especially of punishment, is widely regarded as a core function of government and the exclusive prerogative of the state. The lament of the opponents of prison privatization thus becomes, "If the penal function can be privately performed, what function cannot be?" (Harding, 1997)Cost saving in private facilities is, according to opponents, difficult to prove and can only be done at the cost of sacrificing security measures or preferred inmate treatment which are the methods already employed by the state to reduce budgets. Whether reducing costs might lead to non-compliance of contractual obligations and whether government monitoring is required should be considered in such a situation. Private contracting also creates additional costs of contracting, initiating, negotiating, managing and monitoring contracts, as well as for termination payouts and retraining for displaced government workers (Logan, 1990).
They might also concentrate on serving low-security inmates and not assuming responsibility for the high-security prisoners (Burright). Studies have shown that private prisons have not consistently demonstrated substantial cost savings, and sometimes they have been shown to cost more (Prison Privatization, 2001).Private contractors are usually not regarded for performing beyond the obligations specified in the contract. Therefore the short term drive is towards profit making and not quality. This raises the question of pursuing innovation, flexibility and competent management structure within the firm since such actions will not be appreciated. Furthermore, in a typical contract of 25 years, the inflexibility of the contract can prevent a contractor from either terminating the contract after a few years or pursing development strategies for the longer period when short term incomes are guaranteed (Prison Privatization, 2001).
Even if the private companies hire the most competent personnel, they might prevent the remaining public prisons from operating in an effective way by driving out the competent staff from such facilities since private contractors will be able to offer them a better pay structure and other facilities. With regard to quality, opponents argue that no substantial evidence is present to demonstrate that private prisons can provide a superior experience to the inmate as compared to the public facilities. For example, a study conducted at Okeechobee, a private prison in Florida, showed a low staff moral, a high staff turnover rate and a less orderly and well maintained facility (Prison Privatization, 2001).Perhaps the most important argument is whether it is a morally responsible action to relegate punishment facilities to private institutions or not. Private contractors have only the authority of a private citizen and a little more.
They can arrest, carry firearms and use force in defense. In view of such diffused responsibilities, the use of force to maintain security and control within the facilities is an issue of endless debate between the government and the private contracting agencies. Further more, private contracting also results in decreased monitoring by the government to check for such deviations and ignorance of responsibilities (Prison Privatization, 2001).
