NCJ Number
103862
Journal
British Journal of Criminology Volume: 26 Issue: 4 Dated: (October 1986) Pages: 321-334
Date Published
1986
Length
14 pages
Annotation
This paper examines three aspects of prisons for profit, or privatization of prisons, in the United States and Great Britain.
Abstract
These aspects are (1) the financial mechanism used by local authorities to raise capital for construction of private prisons, (2) the corporations involved in prisons-for-profit, and (3) social and judicial issues related to privatization of prisons. The most popular financing mechanisms are bond-like notes and sales-leaseback arrangements (also called lease-purchase agreements) which give the developer or investors all the advantages of a real estate tax shelter without requiring the approval of voters. Corporate investment in prisons-for-profit is illustrated by the involvement of Corrections Corporation of America, the largest such venture in the United States. Proponents of prisons-for-profit argue that the private sector can run prisons and jails more efficiently than government agencies can. However, this argument ignores several important points: (1) the regulation of private prisons may add another layer to government bureaucracy; (2) government loses money surrendered to developers or finance companies in the form of huge interest payments; (3) per diem, rather than per capita cost (used by proponents of private prisons), involved in holding an inmate should be used to compare real costs; and (4) government may end up paying huge legal fees for litigation brought against it if private corporations commit abuses in running prisons. Finally, it is unlikely that private enterprise would work to decrease the business of running prisons by promoting rehabilitation, which is a measure of a good prison. Therefore, taxpayers and the Nation probably would not benefit from the privatization of prisons. 3 tables and 18 references.