Joseph T. Mahoney, Jiayue Ao, Eva Herbolzheimer, and Hyeonsuh Lee
“The Comparative Assessment of Governance in the Context of Public and Private Prisons”
Several states as well as the federal government have outsourced correctional services with the goal of reducing cost. However, we know little about the effects that prison privatization has on quality outcomes and costs. Previous literature suggests that when capabilities critical to the public interest are controlled by private individuals, agents, or organizations, the public interest might not be pursued as a consummate goal. Furthermore, when quality is difficult to measure and contracts difficult to enforce – such as in our prison context – agents with high-powered incentives are likely to engage in quality shading, which increases probity hazards. The goal of this research study is to compare two different forms of organizing prisons (public and private) from a quality perspective to unravel contradicting findings concerning the efficacy of private prisons and provide evidence- based policy recommendations. In doing so, this study empirically examines governance modes of prisons in the United States and their effects on recidivism rates. This research study posits that the extant literature on public entrepreneurship and privatization needs to be more sensitive to contexts because there are differential probity hazards. Accountability, transparency, and probity are especially crucial in the prison context for serving the public interest.