NCJ Number
228029
Date Published
2008
Length
2 pages
Annotation
This paper reports on two cost and performance comparisons funded by the National Institute of Justice (NIJ) that involved four prisons, one privately operated and three publicly operated.
Abstract
The two studies reached different conclusions about the extent of the cost savings of privatization. The lesson learned is that cost comparisons are complex, and great care must be taken when comparing the costs of privately and publicly operated prisons. The two studies, one conducted by Abt and the other by the U.S. Bureau of Prisons (BOP), offer an opportunity for the research and public policy communities to examine the different approaches that were used, why the results differed, and how this could inform the prison privatization debate. There are two primary reasons that the two studies differed in their findings: the way inmate population sizes were handled and the factors included in overhead costs, such as indirect costs of office supervision, computer services, and budget development. Prison administrators and policymakers who are considering taxpayer benefits of prison privatization should consider the specific analytical assumptions that underlie any studies they examine. Even if private and public prisons cost the same, it is important to examine whether the quality of their performance may differ. The Abt and BOP studies reported on objective indicators of performance. Some of these favored the private operations, and others favored the public operations. One of the limitations of this set of studies was the absence of a common audit procedure for comparing the performance of the publicly and privately operated prisons. Such audits could and should be used in comparing privately and publicly operated prisons. 1 table and 5 notes