Thursday, January 10, 2013

Does Prison Privatization Lead To More Lobbying For Harsher Sentences?

This question is probably a long way from being fully understood.  It depresses me to see prison corporations lobbying for things like the war on drugs, but what we often forget is that such lobbying is not necessarily incremental, as it may just be replacing similar lobbying by public actors.  In fact, Sasha Volokh uses some economics frameworks to argue that in certain circumstances privatization may actually reduce such lobbying rather than increase it:
Private prison firms are often accused of lobbying for incarceration because, like a hotel, they have “a strong economic incentive to book every available room and encourage every guest to stay as long as possible” (Schlosser 1998; see also Dolovich 2005; Shichor 1995; Sarabi and Bender 2000). This accusation has little support, either theoretical or empirical. At worst, the political influence argument is backward: privatization will in fact decrease prison providers’ pro-incarceration influence. At best, the argument is dubious: its accuracy depends on facts that proponents of the argument haven’t developed.
First, self-interested pro-incarceration advocacy is already common in the public sector—chiefly from public-sector corrections officers’ unions. The most active corrections officers’ union, the California Correctional Peace Officers Association, has contributed massively in support of “tough on crime” positions on voter initiatives and has given money to crime victims’ groups, and similar unions in other states have endorsed candidates for their tough on crime positions. Private firms would thus enter a heavily populated field and partly displace some of the existing actors.
Second, there’s little reason to believe that increasing privatization would increase the amount of self-interested pro-incarceration advocacy. In fact, it’s even possible that increasing privatization would reduce such advocacy. The intuition for this perhaps surprising result comes from the economic theory of public goods and collective action.
The political benefits that flow from prison providers’ pro-incarceration advocacy are a “public good,” because any prison provider’s advocacy, to the extent that it’s effective, helps every other prison provider. When individual actors capture less of the benefit of their expenditures on a public good, they spend less on that good; and the “smaller” actors, who benefit less from the public good, free ride off the expenditures of the “largest” actor.
Today, the largest actor—the actor that profits the most from the system—tends to be the public-sector union, because the public sector provides the lion’s share of prison services, and public-sector corrections officers benefit from wages significantly higher than those of their private-sector counterparts. The smaller actor is the private prison industry, which not only has a smaller proportion of the industry but also doesn’t make particularly high profits.
By breaking up the government’s monopoly of prison provision and awarding part of the industry to private firms, therefore, privatization can reduce the industry’s advocacy by introducing a collective action problem. The public-sector unions will spend less because under privatization they experience less of the benefit of their advocacy, while the private firms will tend to free ride off the public sector’s advocacy. This collective action problem is fortunate for the critics of pro-incarceration advocacy—a happy, usually unintended side effect of privatization.

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