This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

Private Prisons - Privatisation

clipped from www.economist.com
Excessively harsh conditions seem to make criminals more likely to re-offend. Are private prisons the answer?
The main reason states contract with private jailers is to cut costs. Tony Grande, a vice-president at CCA, says his firm typically charges 5-15% less per prisoner than a state would spend. The firm has economies of scale—it guards more prisoners than any state bar California, Texas or Florida. It can assemble a jail quickly and cheaply using standardised parts. It lacks a state's cumbersome bureaucracy. It builds smart jails, where fewer staff can watch more prisoners, and it builds where land and labour are cheap.
Private prisons are cheaper and at least as humane as public ones. But one way they curb costs is to take prisoners from any state that has more than it can handle and lock them up wherever they have spare capacity.