From Private prisons have public benefits by Alexander Tabarrok:
Texas houses about the same number of prisoners as does California, but the California taxpayer pays almost twice as much per inmate: around $30,000 per year, more than the cost of a decent college education.If California prisons were unusually effective, the high cost might be acceptable. But with 300,000 prisoners packed into a system designed for only 170,000, it’s a challenge simply to warehouse the prisoners, let alone provide effective programs for rehabilitation.
It’s no surprise that private prisons cost less than public prisons. Private prisons also drive public prisons to keep their costs down:
Cost savings of 15 to 25 percent on construction and 10 to 15 percent on management are common. These are modest but significant cost savings in a $5.7 billion state system that continues to grow more expensive every year. [...] Perhaps moretellingly, from 1999 through 2001, states without any private prisons saw per-prisoner costs increase by 18.9 percent, but in states where the public prisons competed with private prisons, cost increases were much lower, only 8.1 percent.
Tabarrok makes the point that while, “The bad rap on private prisons has always been that cost-savings would come at the expense of quality,” that’s not the case:
Careful studies by the U.S. Department of Justice’s National Institute of Justice and others indicate that if anything, private prisons are of higher quality than public prisons.In fact, although prison privatization in the United States has been driven by cost savings, in Britain the driving motivation was higher quality, more humane prisons.
After studying the issue, the director general of Her Majesty’s Prison Services concluded that the private prisons “are the most progressive in the country at controlling bullying, health care, and suicide prevention.’