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Do privately-owned prisons increase incarceration rates?

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  • Galinato, Gregmar I.
  • Rohla, Ryne

Abstract

This article measures the effect of establishing private prisons on incarceration-related outcomes in the United States. We develop a model to show that enforcement authorities faced with capacity constraints or who are more susceptible to bribes set non-optimal sanction levels which may increase total number of incarcerated individuals and each individual's sentence length. Using instrumental variables regressions on state and individual data from 1989 to 2008, we find evidence showing a rise in private prison beds per capita increases the number of incarcerated individuals per capita and average sentence lengths. The effect is more likely for crime types with more sentencing leeway such as fraud, regulatory, drug, and weapons crimes. There is evidence showing the effect of private prisons is more pronounced in states where prison capacity constraints are met or exceeded and if the state is more corrupt.

Suggested Citation

  • Galinato, Gregmar I. & Rohla, Ryne, 2020. "Do privately-owned prisons increase incarceration rates?," Labour Economics, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301123
    DOI: 10.1016/j.labeco.2020.101908
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    Cited by:

    1. Christian Dippel & Michael Poyker, 2023. "Do Private Prisons Affect Criminal Sentencing?," Journal of Law and Economics, University of Chicago Press, vol. 66(3), pages 511-534.

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    More about this item

    Keywords

    Private prisons; Sentencing; Lobbying; Incarceration; Capacity constraint; Corruption;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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