New Study Shows Public-Private Partnership in Corrections Lowers Cost

Vanderbilt University professors find that states can save substantially by having a shared system of public and private prisons. Using six years of data, the researchers found that states which house a portion of their inmates in private prisons have lower rates of growth in their public prison operating costs. These savings are in addition to the direct cost savings from the private operators. The research concluded that a state not currently using privatization could save $13 to $15 million annually from their yearly department of corrections budgets by introducing privately managed prisons. The research shows that privatization brings healthy competition and transfer of knowledge, both of which curb costs of the public sector.

Blumstein, James F. and Mark A. Cohen. Written Dec. 2007; Published Dec. 2008. “Do Government Agencies Respond to Market Pressures? Evidence from Private Prisons.” Published in the Virginia Journal of Social Policy and the Law.

Much more information on this study is available on our independent studies page.