One promising-if problematic-option for dealing with rising prison costs is privatization. In a range of activities from street sweeping to airport construction, the private sector has shown that savings of 20-50 percent can be realized through competitive contracting. Yet the management of prisons raises ethical issues that street sweeping does not. Can the private sector play a role in corrections without jeopardizing the rights of inmates and the public? In some areas, such as prison construction or food provision, the answer must be a certain "Yes." In more sensitive areas, such as actual prison management, the answer would seem to be a more cautious "Yes:"

Increasingly, the issue is not one of merely academic interest. In the United States, over 77,000 inmates are housed in facilities operated by private corporations. That number has grown by 30 percent in the past year, and continues to rise. "The War on Drugs" has helped make corrections a growth industry. In 1977, there were 300,000 inmates in state and federal correctional facilities. By 1990, that number was 756,000. This dramatic increase has resulted in widespread overcrowding. By the end of 1989 state and federal facilities taken together were operating at an average 18-29 percent over capacity. In nine states, the entire prison system is under court order to reduce overcrowding. All but five states have at least one prison operating under court order or consent degree. The Federal Bureau of Prisons expects the number of federal inmates to double between 1990 and 1995.

Building prisons is not cheap. Construction costs range between $60,000 and $80,000 per inmate bed for high-security facilities. In addition, annual operation and maintenance costs are straining already overburdened budgets.

\Faced with these daunting numbers, public officials have increasingly turned to the private sector to assist in corrections. In 1991, the Massachusetts Department of Corrections awarded a contract to provide food services at several state facilities to a private firm, at a cost savings estimated at $600,000 annually. Other functions often contracted out include health services, inmate academic education, vocational training, and counseling.

Prison construction is another area in which the private sector can play a role. There are now more than a dozen private firms offering to finance prison construction projects, usually under a lease-purchase agreement. Under a lease-purchase agreement, a private firm will build a prison at its own expense, provided the state agrees to lease the facility for a specified period of time. Such arrangements are financially attractive for both the state and the firm. Free of bureaucratic regulations, private prison construction is faster and less expensive than public construction.

For most people, there is nothing objectionable about a private, profit making corporation providing such services. But, privatization advocates maintain that the responsibility of government is to provide all needed services in the most cost-effective manner possible; the public or private identity of the service provider is irrelevant. Taxpayers deserve to have the government procure the highest possible quality of service at the lowest possible cost.

What then about the actual management of a prison? One essential role of government is to punish crime, a role which is and ought to remain unique to the state. While the state clearly must maintain responsibility for corrections, is there any reason that state employees, as opposed to private firms, should do the work?

The argument has been made that the profit motive of a private corrections firm would jeopardize the rights of inmates. Once a management contract had been awarded, this argument contends, the private firm would attempt to cut costs at the expense of the living conditions of inmates. The firm's objectives would take precedence over the public interest in fair inmate treatment, due process, education, vocational training, and rehabilitation. This argument cannot be dismissed lightly. The state has a compelling interest in assuring that its corrections objectives are met.

Through intelligent oversight, however, all these objectives can be achieved within the framework of a private facility. To be an acceptable option, private prison operation must be overseen by government employees charged with verifying that such facilities are managed in accordance with statute, regulation, and contract. Just as government agencies contracting for street sweeping verify the quality of the service provided, so too should public authorities contracting for prison management. Since privately operated facilities would continue to operate under the scrutiny of the judiciary, turning over the operation of a correctional facility is not tantamount to relinquishing oversight authority.

Some view the private-public debate as a choice between private management, with its undeniable potential for fraud and abuse, and the "perfect" alternative of public operation. That is a mistake. Public operators can lack incentives to provide humane and high-quality inmate services. Many inmates now suffer under overcrowded conditions in public institutions. At least private operators have a profit guided interest coincident with the public interest-private operators are motivated to provide high-quality inmate services in order to secure additional contracts.

Where comparisons can be made, there is evidence that conditions in private facilities are superior: A higher proportion of private than public prisons have achieved American Correctional Association accreditation. In terms of seeking legal redress for ill-treatment, Professor Charles Thomas of the University of Florida points out that "the legal remedies of state inmates housed in private correctional facilities are more complete and expansive than those of state inmates housed in state facilities:" Issues concerning the use of prison labor are equally problematic for private and public operators.

The chief reason in favor of using the private sector-whether for prison support services or for management-is saving money. As in most areas, the innovation engendered in a competitive market results in significant savings over public monopolies. Because the true cost of public prison operation is often difficult to identify, few studies have been done to quantify the extent of savings. But Charles Logan of the National Institute of justice has estimated that the largest private prison operator saves the state 4-15 percent.

Savings are not, as a rule, achieved at the expense of prisoner well-being. Corrections is a highly labor-intensive operation. Private operators enjoy a cost of labor advantage because they pay the market rate, while public operators typically use unionized public employees whose wage and benefits are above the market rate. Private operators also use creative purchasing strategies to lower costs.

Given the limited resources available to government, using the private sector to stretch corrections expenditures has important ancillary public policy implications. Because of overcrowded prisons and a lack of funding, many criminals that justice and public safety indicate should be incarcerated are allowed to go free. Private prison operation can, by making more efficient use of scarce public resources, remove the availability of space from the list of considerations deciding whether to incarcerate a convicted criminal.

The successful use of private management in public corrections hinges on a contract that provides for an active government role in overseeing operations. Even in a privately managed prison, government retains the ultimate responsibility for the prisoner. Mechanisms exist to assure that private operators serve the interest of inmates and public. Evidence has shown that private service provision is more cost-effective than public. Through legislative, judicial, regulatory, and contractual means, stringent public oversight of private prison operators can and should be exercised.

Privately operated prisons can be an important component of the effort to provide humane, cost-effective corrections.