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Most prisons are operated by government agencies. However, some private corporations have seen the potential for profit in owning and operating private prison facilities under contract to local governments.

In the United States, private prisons are paid a per-prisoner, per-day rate by the contracting government agency.

The privatization movement can be traced to the contracting out the confinement and care of prisoners after the American Revolution. Deprived of the ability to ship criminals and undesirables to the Colonies, Great Britain began placing them on hulks moored in English ports. ^[1]

In the U.S., the first for-profit prison was San Quentin prison in California. Opened in 1852, San Quentin was constructed and initially operated as a private enterprise. According to Schmalleger and Smykla (2007), “…after a number of major scandals surfaced surrounding the mismanagement of the facility… California turned San Quentin prison over to the control of the state government” (p. 552).^[2]

The transfer of San Quentin prison administration from private to public did not mark the end of privatization. The next phase began with the Reconstruction Period (1865-1876) in the south, after the end of the Civil War. Farmers and businessmen needed to find replacements for the labor force once their slaves had been freed. Beginning in 1868, convict leases were issued to private parties to supplement their workforce.^[3][4] This system remained in place until the early 20th century.

Today, non-governmental enterprises, in the form of publicly traded companies, operate 264 correctional facilities housing almost 99,000 adult offenders.^[5] Companies operating such facilities include the Corrections Corporation of America, the GEO Group, Inc, and Cornell Companies.

The Corrections Corporation of America (CCA) website lists a capacity of approximately 72,500 beds in 65 correctional facilities.^[6] The GEO Group operates 61 facilities with a capacity of 49,000 offender beds,^[7] while Cornell Companies has 79 facilities to service 19,226 adult and juvenile offenders in secure containment and community-based corrections.^[8]

Most privately run facilities are located in the southern and western portions of the United States and include both state and federal offenders.^[9]

This section is written like a personal reflection or essay and may require cleanup. Please help improve it by rewriting it in an encyclopedic style.(December 2007)

When extending the debate to private versus public prisons, cost-effectiveness should be taken into account. An evaluation of 24 different studies on cost-effectiveness revealed that, at best, results of the question are inconclusive and, at worst, there is no difference in cost-effectiveness.^[10] Unfortunately, there are few studies on the subject^[11] and this aspect of the debate apparently demands further study.

Finally, critics question the motivation behind privately run prisons. When a publicly-traded company, accountable to its stockholders and driven by profits, earns profits through the housing of prisoners, what motivation exists for rehabilitation and the possibility of early release as a reward for good behavior? This concern is somewhat addressed by the wording of contracts to allow for incentives for those facilities providing services such as drug treatment.^[12]

What does the future hold for prison privatization? Clearly, there are many questions that need to be answered, including the effect of management on the rate of recidivism and cost-effectiveness of private versus public prison construction and administration. Even the economy and politics will play a role, as state and federally run prisons are built and run with government revenues funded by the tax base.

Many organizations have called for a moratorium on construction of private prisons, or for their outright abolition.^[13] Several religious denominations have also joined the call, including Catholic, Episcopal, Methodist, United Church of Christ and Presbyterian.^{[citation needed] [14]}

• The all-volunteer Private Corrections Institute, a comprehensive source of information on the industry
• Corrections Corporation of America web site
• Steel-Town Lockdown, Mother Jones