The DOJ's Misguided Withdrawal from Private Prisons

by Sasha Volokh August 25, 2016


Why is the federal government so eager to stop housing prisoners privately?

The Department of Justice’s recent decision that the federal Bureau of Prisons should wind down its private-prison contracting was apparently based on private prisons’ bad record of safety and security violations relative to their public counterparts. It turns out, though, that the DOJ’s understanding of private prisons’ record is informed by a serious over-reading of faulty comparative studies, in particular a recent study by the Office of the Inspector General.

As a result of this over-reading, the federal government — and any states that follow the federal government’s lead — may not be able to take advantage of the power of contracting to provide incentives for good behavior.

First, let’s look at how the IG’s report compared public and private prisons. The report took the 14 private federal prisons and matched them with “14 comparable BOP institutions.” What made the public prisons “comparable” was that they housed male inmates with “the same security level (low), similar population sizes, and similar geographical locations.”

Early on in the IG’s report, the IG compares “annual per capita costs” for public and private prisons. Over fiscal years 2011–14, these costs range from $23,780 to $25,251 for public prisons, and from $21,838 to $23,003 for private prisons — an apparent savings of about 3 percent to 12 percent for private prisons. Wisely, though, the IG’s report cautions against drawing any conclusions from these numbers. There are many reasons a direct price comparison is problematic, but the report stresses one important reason in particular:

We were unable to compare the overall costs of incarceration between BOP institutions and contract prisons in part because of the different nature of the inmate populations and programs offered in those facilities.

How different were the inmate populations? Elsewhere, the IG explains:

As of January 2014, inmates incarcerated in private facilities were primarily non-U.S. citizens with 72.1 percent from Mexico, while the selected BOP institutions had an average of 11.8 percent non-U.S. citizens.

Every prison researcher understands that the demographic makeup of a prison is important, especially in a prison environment where gangs based on ethnic or racial affiliation play an important role. This is why the best empirical studies try to compare prisons that are matched in terms of demographic makeup. The IG report didn’t control for demographics, and it recognized that this made cost comparisons inadvisable.

The report goes on to compare how the public sector stacked up against the private sector based on eight measures of “safety and security.” Private prisons did better in two of those measures: urinalysis drug testing and sexual misconduct (both inmate-to-inmate and inmate-to-staff). But in the other six areas — contraband, reports of incidents, lockdowns, inmate discipline, grievances, and telephone monitoring — “the contract prisons had more incidents per capita than the BOP institutions.”

Remember, though, that the report was “unable to evaluate all of the factors that contributed to the underlying data, including the effect of inmate demographics.” So perhaps we should refrain from drawing any conclusions from this simple comparison of raw numbers?

Moreover, some of these measures wouldn’t really tell us much even if they did lend themselves more readily to direct comparison.

Consider, for instance, the contraband measures — cell phones, weapons, tobacco, and drugs confiscated. Private prisons had more contraband confiscations than the public prisons, but that can be interpreted both ways: Are the private prisons worse because more contraband was found? Or are the private prisons better because they try harder to find contraband? The trouble is that we don’t know the true amount of contraband; we just know about contraband confiscation, and that’s something that’s particularly manipulable by prison officials. In fact, I know one great way to keep your contraband numbers down: just stop searching for it.

Same goes for grievances: If private prisons have more grievances filed than public prisons, does it mean there’s more to complain about in private prisons? Or does it mean that private prisons make grievance forms more available or that inmates at private prisons are less concerned about retaliation if they complain? Again, we don’t know the true numbers of things to be aggrieved about; we just know the numbers of grievances filed.

On balance, though, one might think that the IG report is fairly harmless. Yes, it compares prisons that probably aren’t comparable, and some of what it measures has no obvious relationship to actual quality of confinement. No, we shouldn’t take it terribly seriously as a comparative study, since there already are better studies out there. But overall it does an okay job of not overstating its results; its basic recommendation is a call for further study.

Even a harmless study can lead to harmful changes, however. The Justice Department, not sharing the IG report’s caution, went ahead and read too much into its results. Where the IG’s office hedged its conclusions with caveats about comparability and merely called for greater investigation, the DOJ memo made broad claims:

Private prisons . . . compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’s Office of Inspector General, they do not maintain the same level of safety and security.

Based on this slim reed, Deputy AG Sally Yates ordered the BOP to “either decline to renew” contracts as they expired “or substantially reduce [their] scope.” It’s not clear whether the DOJ was relying on studies other than the IG report, but if it was, I’d like to see those studies: All available evidence does little to suggest that private prisons are worse than public prisons overall, or that they cost more.

What will the result of this be? Let’s assume that (probable future) President Clinton maintains the DOJ’s new policy, and that BOP private-prison contracting winds down. This will affect roughly 25,000 inmates — about 15 percent of the total number of federal prisoners — who will have to be moved to BOP facilities. Of course, the DOJ’s policy is limited to the federal system — the states’ privatization policies are unaffected, except to the extent they want to follow the federal example. On average, states keep only 7 percent of their prisoners in private prisons, or 90,000 private state prisoners in all.

Will this be harmless? If private and public prisons don’t differ much on quality, that means the quality of confinement shouldn’t change much. If private prisons save some money, the cost of confinement should go up, though maybe not by much. It’s not clear whether either sector has an edge in reducing recidivism, so who knows what difference this will make on rates of re-offense.

The far greater problem is what might have been. Prisons have begun experimenting with performance measures and performance-based contracting — which, surprisingly, is almost unprecedented. These new metrics could offer substantial possibilities for improvement in prison conditions in the future. Monetary incentives could work in the public sector — think of performance-based bonuses for public-prison wardens — but the private sector is probably best positioned to take advantage of them: If there’s one thing the private sector is good at, it’s trying to make money in any way it can. The DOJ could have directed the BOP to take a “mend it, don’t end it” approach by truly making an effort to encourage higher quality through better contracting. The BOP could have taken the lead in developing state-of-the-art prison-contracting practices and helping to spread good performance measures nationwide. But that’s unlikely to happen now. — Alexander “Sasha” Volokh is an associate professor of law at Emory University. He blogs at the Volokh Conspiracy and is an expert on the law and economics of privatization.

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