The Policy Fight for the Future of American Prisons

Private, public, non-profit, for-profit, and everything in between.

In American public policy, our leaders have struck a strange bargain: on the most difficult and unpopular subjects, things should be left to “experts.” In exchange, the public may suffer, but political leaders have plausible deniability and can comfort us with the knowledge that the people failing at their jobs are highly-credentialed.

Among the many systems where this is the case is the justice system: prisons, probation, and parole. Whether it’s the ~90% public prisons, dominated by unions, or the ~10% corporate-run for-profit private prisons, the cultures and management are, to put it mildly, lacking.

The problem with poor prison management may elude some people — after all, most of the general public will never enter a prison, nor will what happens inside prisons affect them contemporaneously. Prisons are often physically isolated (by design) and can seem a world away from daily life for Americans.

But bad prison cultures produce bad results down the line — including teaching inmates how to be better criminals, and to hate the world that put them there. That effect cascades through society and produces negative externalities on the public. 

I want to posit three truths for how to think about this:

1. Incarceration might never rehabilitate some of the very worst criminals, who must stay there forever to protect the public.

2. Incompetent incarceration can turn rehabilitatable offenders into hardened criminals, so we should try to make prisons better.

3. Like other organizations, prisons can be improved through better management based on mission, metrics, and accountability.

Too much of “criminal justice reform” discourse has focused on trying to dispute #1 and insist that all criminals can be released. We should resist that, but at the same time should hold on to the second truth: that we can make prisons more effective for the vast majority who will eventually return to society. 

The 3rd truth comes from an understanding of what the effective cultures in our society are. What are the organizations that are best at adapting to change and pursuing goals? Harnessing an understanding of effective culture in prison would have dramatic effects — massively improving the economic prospects and safety of many communities. 

So, we can innovate in prisons like we do in other areas — by trying new things, measuring the results, and iterating. Shibboleths can be violated by the results. Old management may have to be replaced. And as you might have suspected, “innovation” here doesn’t mean tons of more money — at least, not without much better incentives. 

California spends over $131,000 per prisoner annually, while Mississippi spends a little over $18,000. Yet both jurisdictions are still locked in interminable cycles of crime. They maintain similar crime rates. In fact, Mississippi’s is slightly lower. 

Imagine if California spent $131,000 with a results framework, instead of using the money as a special interest handout? At any budget, institutions need a proper incentive structure to encourage better outcomes and hold them accountable for failure.

One project that I am optimistic about, and would be enabled by reform, is Social Purpose Corrections (SPC). SPC seeks to operate the country’s first private, not-for-profit, performance-funded prison. At the top of their priority list is the post-release success of inmates, the morale of corrections officers and other employees, and the impact on surrounding communities. They’re backing up this commitment by holding themselves accountable by contract. 

Every year, SPC will send a report to its contract provider (a state government) that contains its detailed data for that year. A comparison of historical results and public alternatives will determine the funding score — i.e. how well is SPC doing compared to the public prison system at rehabilitation? If SPC can demonstrate its methods have measurably improved results, funding will be adjusted proportionately.

Social Purpose Corrections (spcor.org)

SPC can teach the US that a successful, beneficial prison will be one that takes data collection seriously. It will use metrics to continually assess its progress. It will reward the programs with the best results. Visa versa, it will have to terminate the programs or ideas that are failing.

The policy organization I chair, the Cicero Institute, writes model legislation for state lawmakers in this area, among others — to align incentives between the prison system and the community it exists to protect. Specifically, we’re interested in establishing performance-based contracts that reward results. Multiple types of providers can compete for these types of contracts, whether they’re public or private, for-profit or not-for-profit.

In Arizona, a reform inspired by our ideas to pave the way for newer, better prison models died in the state legislature amid lobbying by private prison corporations.

Private prisons get a bad rap in American politics. This reputation is often deserved; many are failed institutions. But it isn't the private structure that is the problem — public prisons have many of the same issues — or even the profit motive; it’s the poor incentive structure, exemplified by states paying per bed and not paying based on results. They are operating on models that were created in the 1980s, with few changes since — unlike other areas with market forces.

From their perspective, opposing reform is obvious: right now, private operators take in revenue with no selection pressure and no real competition. Who wouldn’t like that?

The problem for these companies is that their political capital is running low. The Federal Bureau of Prisons has already ended the last federal private prison contract. They have very little sympathy on the left, and sympathy on the right is waning as many Republicans look to confront cronyism. 

In the short term, their lobbying has been effective at stopping reforms with majority support. But this won’t last. The legislators who ultimately control private prison contracts, both Republicans and Democrats, are learning from our Cicero research about the results that are possible with incentive-based models.

In Arizona, Representatives Tim Dunn, Austin Smith, and David Livingston spearheaded the reform effort amid a lot of pressure from the industry. Others who succumbed to that pressure and balked at reform will have a chance to listen to voters between now and next year. Our recent Cicero Institute poll in Arizona demonstrated that 61% of Republicans and 77% of Democrats support aligning funding with a private prison’s ability to prepare inmates for successful re-entry, not simply paying based on the number of inmates. 

So, the choice for the private operators is as follows: will they get on board with a state-level reform movement that leaves open the possibility of private prisons, but fixes the incentives and payment model to get better results? The alternative is not the status quo — it’s a sunsetting of private prisons altogether, as has already happened at the federal level. 

Believe it or not, not everyone involved in prison policy thinks profit is dishonorable — certainly not myself as a lifelong entrepreneur that has actually built government contractors and defense companies. But lobbying to block a reform aligning profit with good outcomes is dishonorable. If they keep going down this path, the current private prisons will be gone in a generation. 

Our Arizona poll found that while only 38% of Republicans and 16% of Democrats have a favorable view of for-profit prisons, 68% of Republicans and 53% of Democrats would support allowing for-profits to continue operating if they were funded based on how well they rehabilitate prisoners. 

This is their last chance; we invite the private prisons to join the serious reformers in charting a path that emphasizes results and competence. If all prisons were encouraged to innovate and rewarded based on results that all of us — left and right — agreed on, I wouldn’t be surprised if mission-driven for-profit prisons with competent managers were welcomed even into blue states. But the current crony arrangement is coming to an end, with or without their permission.