1. development, and “10% to 20% cost savings”

Topic: BusinessComparative Analysis
Sample donated:
Last updated: March 26, 2019

1.    Introduction2.    TheoreticalFramework2.

1  GeneralBackgroundPrison privatization came to life as a solution for theincreasing number of inmates in the 1980’s which was lying heavily on statebudgets. 2.2  DiscussionIt is imperative to assess the truthfulness of the claimsmade by CCA and GEO two of the biggest private prison contractors. Their claimsfeed mass incarceration by making privatization appear to be an attractivealternative to reducing prison populations. But the evidence for such benefitsis mixed at best.

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Not only may privatization fail to save taxpayer money, butprivate prison companies, as for-profit institutions, are strongly incentivizedto cut corners and thereby maximize profits, which may come at the expense ofpublic safety and the well-being of prisoners.Supposed costsavingsPrivate prison companies assert that privatization savesmoney, or is otherwise cost-effective. GEO, for example, claims on its website toprovide “20% to 30% cost savings” in facility development, and “10% to 20% costsavings” in facility management.Research found that at first glance privately managedprisons appeared to be more cost-effective saving on average US$2.45 per prisonereach day.

However, the authors also found that the predictors of cost were: ageof the physical facility, security level and number of inmates served. Takingthis in consideration the authors state that the type of management (private orpublic) didn’t have a significant impact on cost-effectivness. (Pratt &Maahs, 1999).

Even though, privately managed prisons had a cost advantage itwas on average only 2.2% in comparison to their public counterparts. (Lundahl et al, 2007).Scant economicbenefit for local communitiesAside from supposed cost benefits, the leading for-profitprivate prison companies assert that private prisons help local communities.For example the GEO group website states that  “Every one of GEO’s approximately one hundredfacilities has a unique active role in giving back to their community and theiremployees.

“The view that prisons substantially promote economicdevelopment is highly questionable. According to certain studies, new prisonsappear to bring few, if any, economic benefits. A 2010 study by researchers atWashington State University and Ohio State University examined data on “allexisting and new prisons in the United States since 1960,” reporting findingsthat “cast doubt on claims that prison building is worth the investment for strugglingrural communities.” (Gregory Hooks et al, 2010).

Furthermore,private prisons can impose costs on local communities by obtaining subsidies,enjoying property tax exemptions, and receiving municipal services (such aswater and sewer services) that cost taxpayer money. In 2001, a report by oneadvocacy group stated that nearly three quarters of large private prisonsreceived development subsidies from the government.(Price, B. E., &Schwester, 2010)Limitedincentives to curb recidivism and prison violenceLeading private prison companies assert that for-profitfacilities protect the safety of prisoners. CCA states on its website “We have the scale and experience to solve the touchchallenges facing government at all levels, while providing the kind oflife-changing reentry programming that is proven to reduce recidivism andenhance public safety.”As detailed below, for profit prisons may be associatedwith elevated levels violence which may be cause by the perverse incentives tomaximize profits and cut corners even at the expense of safety and adequateconditions for inmates.

Several studies suggest that inmates in private facilitiesmay face greater danger to safety than those in federal prisons. One studyconcluded that “the private sector is a more dangerous place to beincarcerated,” and reported, based upon an analysis of national data, that “theprivate sector experienced more than twice the number of assaults againstinmates than did the public sector.” (Blakely & Bumphus, 2004). The UnitedStates Department of Justice had found similar results in their study andreported that the privately operated facilities have a much higher rate ofassaults between inmates and between inmates and staff than publicly operatedfacilities, when institutions of similar security levels are compared (Austin& Conventry, 2001).Another Department of Justice study compared a privateprison, Taft Correctional Institution (TCI) with certain other prisons operatedby the federal Bureau of Prisons (BOP), reporting lower levels of violentmisconduct among inmates at the private prison, however, the study alsoemphasized that private prisons contribute to a higher probability that inmateswould be involved in overall misconduct than any of the prisons to which it wascompared (Lappin et al., 2005).

The study also stated that TCI consistentlydemonstrated lower levels of performance on measures like inmate misconduct andillegal drug use. This relationship remains true when TCI is compared to thethree BOP comparison prisons as well as when compared to over BOP prisons. TCIexperienced two escapes and a large scale disturbance in which at least 1000inmates refused to return to their cells, these incidents endangered bothpublic and the institution safety.Flawed incentives and privateprison violenceDangersin private prisons may reflect the financial incentives to minimize costs andmaximize profits. According to one scholar private prison companies have a muchhigher incentive to save costs in the detriment to the public but for their ownprofit (Shichor, 1995).

In particular a lower-pay to workers results in ahigher rate of staff turnover. In private prisons workers are paid generallyless, moreover, an interesting fact to note is higher separation rates forcorrectional officers. 179 Similarly, according to another study, privateprisons, as compared to public facilities, pay correctional officers less and facea higher rate of staff turnover.180Thesekind of savings can potentially create grave risks for the security of theinstitution and its staff, as pay and turnover may “contribute to the higherlevels of violence seen in the private sector.” 181 To be more specific,privately operated prisons have systematic problems in maintaining thesecurity.

Advocates, have argued that private prisons can pay less and stilldeliver a product of the same quality, however the research shows thecontrary.182 The same study also suggested that workers in private prisonscouldn’t maintain an acceptable level of public safety or inmate care.183 Inorder to strenghen the argument data from another meta-analysis are presented.The study argues that “publicly managed prisons tended to perform better withregard to public safety” (Lundahlet al, 2007).Private prisons and rehabilitationRehabilitationis a very important aspect for publicly manage prisons, because it reducesrecidivism thus saving future costs and assures public safety as inmates havean easier time integrating back into society. Recidivism and rehabilitation arevery closely tied together as the sole purpose of rehabilitation programs is tolower the rate of inmate re-incarceration. In this sense one scholar notes thatcompanies operating private prisons may be so concerned with profit making andsatisfying stockholders that some major goals of the correctional institution,one of them being rehabilitation, may be overloocked.

197 Another point worthmentioning is that there is little incentive to spend money on rehabilitationbecause the more individuals are sent in prison and the higher the rate ofrecidivism, would lead to higher profits for private facilities. Moreover,recidivism can be seen as a steady source of clientele which in turn hasnegative consequences for the public. Spivak& Sharp have proposed in their research to measure the effectivness ofprivate prisons in terms of recidivism rates. This parameter assures thatcompanies don’t purposfully halt the rehabilitation processes in order tobenefit from a steady stream of inmates and helps determine the quality ofservices provided.

The study which analysed data from Oklahoma prisonsconcluded that private prison inmates have a greater hazard of recidivism thanpublic prison inmates. 199Last piece of the puzzleInmates are without a doubt captive employees. Firstly, allprisoners work both in private and public managed facilities, they are neverlate or miss a day of work. Secondly, inmates are paid from US$1.09 to US$2.

75per day. Another aspect to consider is forced labour. The definition stated bythe Forced Labour Convention is “all work or service which is exacted from anyperson under the menance of any penalty and for which the said person has notoffered himself voluntarily”. 207 Even though, it seems that this definitionincludes prisoners too, they are excluded from the convention by article2(2)(c). 208.

Therefore, prison labour is not considered forced labour. Prisoners,however, are protected by the requirment that the work is “carried out underthe supervision and control of a public authority and that the prisoner isnot hired to or placed at the disposal of private individuals, companies or associations”.The committee of Experts found that prisoners can be placed to work for privateentities only when the prisoner offers himself voluntarily. The problem whicharises is how to asses the willingness to work. Moreover, there must be nopunishment or negative effects such as forced idleness or being clasified as a “badprisoner” which in turn would limit the opportunities for early release. There is no straightforward answer to what is morallyresponsible behaviour.

Ultimately, it comes down to the culture of a society,its individual beliefs and the standards that they set for themselves (Fischer,1999). This notion is also intertwined with the fact that judicial power shouldbe exerted by the government because they are accountable to their citizens. Inthe case of prison privatisation there is a transfer of the power of detentionof those convicted from the public to a private entity. There are ethicalimplications especially, when we combine a missalignment of incentives with thepower to control people’s basic life conditions in captivity. 2.3  LimitationsBefore stating the Hypothesis, there is a need to adressthe limitations of the analysis. Prison Privatisation has a lot of implicationswhich makes the task of adressing all of them nearly impossible. Firstly, mostof the research analysed had to compare public and private prisons head tohead.

This is a serious limitation due to the difference of prisons based ondifferent indicators like: number, race, gender, age of inmates; the securitylevel of prison, type of offenders, age of the facility and many other. Allthese factors influence the accuracy of inferences made. Secondly, thepsychological aspect of the matter isn’t disscused in this paper due to thelimited amount of research on the topic. The effect of labour in captivity, theeffect of violance, the effect of low pay and the effect of low skilledofficers on the psychology of the inmates and their behaviour would add clarityto the debate. Thirdly, there is little to no research from the inside of aprivate prison. The papers used in this essay are predomently based on the dataoffered by the corporations, however, the stories from inmates that had beenincarcerated in private facilities form a completly different picture, a moreobscure one. However, these statements cannot be considered due to theirsubjective nature and no research has been found which would includeinformation from witnesses of the private prison detention.

2.4  HypothesisThis paper is an attempt to shed light on the topic ofprison privatisation. There are a lot of benefits stated by businessesadministrating prisons, however, when looking at data from research theirclaims don’t seem to hold. Cost savings if existant are minimal, scant economicbenefit for local communities, divergent incentives to curb recidivism andpromote rehabilitation, a lower quality of confinment, increased violance andthreat to public safety. Therefore, if the advantages of prison privatisation are non existant or limited atbest, we can conclude that these businesses are profiting from punishment, whichis commonly seen as unethical and morally iresponsible. When the concept isstripped down of alll the supposed benefits, at its core remains an intricateform of slavery which is covered up from the public.

3.    Conclusion

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