History

The use of private companies within the U.S. prison system dates back to the reconstruction period following the Civil War. Prisoners in state-operated prisons of the period were released into the care of companies, such as mining and logging companies with profits from the businesses paid to the state government. In 1981, Florida became the first U.S. state to place its entire state prison system in the hands of a privately owned company.

Types

The privatization of prisons can take two forms. The first form is the contracting out of services, such as medical, food and maintenance in government-controlled prisons. Secondly, government agencies contract private companies to oversee the design, construction and operation of a prison.

Cost

An increase in the prison population during the latter half of the 20th and beginning of the 21st century led to a number of problems including prison overcrowding and taxpayer resistance to the construction of new prisons. The privatization of prisons helps reduce the costs paid by government agencies and taxpayers.