Overcrowding, old facilities, and large budgets were growing to be a major problem in our public correctional facilities in the late eighties. Our government needed to find a better way to build and maintain prisons. The answer came in the idea of privately built and run prisons. Now this hasn't completely solved the overspending on corrections but it has saved the government and taxpayers a lot of money. I am going to show the positives of private prisons that illustrate why I believe they are the best way to maximize efficiency while minimizing costs.
A privately run prison can be thought of as a hotel for prisoners, but the bill gets picked up by the state. A private prison company's main goal is to make money by housing as many criminals as their facility will allow. These companies invest in building a new prison and then the government pays them a per diem per inmate to lock them up. This benefits the government in several ways because they aren't stuck with a huge bill to build the prison and they only pay when they put someone away. The company wants to make money, but they don't have control over how many inmates they receive, and the government doesn't want to pay any more than they have to or need to so the government is in the driver's seat. The prisons are hired by the government through short-term contracts usually around 1-3 years. There are a lot of costs calculated into the contract so I'm going to make it real basic. The contractor estimates the capital and operating costs, adds on a margin for profit and sets the fee accordingly (Ring, pg. 31). What that means is the contractor estimates how many average inmates the prison will house per day and multiplies that by a set price per inmate per day and figures out the total cost of the contract period. This rate can be negotiated throughout the contract period on mutually agreed intervals or based on changes in some determined measure like the Consumer