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The market for private prisons in United States emerged at a time when ideas were being put forward on downsizing the government in order to improve service delivery and accountability. The new public management (NPM) recommended that the government ought to oversee the provision of services through giving contracts to private institutions rather than deliver the services itself. NPM focused on downsizing the government while imposing a market-style policy on its operations. The government felt that by privatizing service delivery, there would be increased competition which in turn would force prices to go down and also trigger innovation. In addition, this idea drew support from economists who argued that governmentís monopoly was to blame for high costs and low quality service delivery.

†Privatization was seen as the best way forward towards achieving high innovation and quality service delivery. Another factor which facilitated the market of private prisons was what in public domain seemed as inability of the government to oversee that the inmates are corrected rather than punished. There were cases of torture, abuse and hard work in some public prisons. This went against the mandate of prisons which is to correct the offenders so that they can become good citizens.

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Politics play a vital role in the success of private prisons. When the idea of introducing private prisons surfaced in the US, many politicians voted in favor of the system. Some even promised to set up their own private prisons in an effort to make the whole idea become a reality. When the government decides to go private, it considers a number of factors from cost to citizenís ideology and political acceptance. The peopleís ideology on the privatization of prisons was that the industry would seal the gap that existed between the offenders and the people given the responsibility to oversee their correction. Investors on the other hand looked at benefits that realized from the activity. For private prisons to be successful they need the support of the public together with that of the politicians or legislators. Major decisions and policies that touch on the national domain have to get the approval of the legislators. The public confidence on private prisons is of importance in ensuring that the prisons are not limited to customers.

After the emergence of private prisons, expectations were high on how they would have changed the prison system in the USA. But the industry has been a disappointment to many especially the policy makers who believed in it. The dependence of private prison companies on the few and limited government consumers has rendered the market unprofitable and unable to expand. This limitation not only reduces competition but constrains the industry in terms of innovation. Competition goes in hand with innovation and if the industry does not provide competition in service delivery then little innovative changes are observed.

I think the industry should be restructured in order to increase generation of new ideas in service delivery. This will eliminate duplication of policies by the industry. Areas that need restructuring are; management overhaul i.e. avoiding recruitment of public sector management into the industry; reducing cost of operations through cutting the payment rates and outsourcing some services from cheaper suppliers. Policy makers should work on a way that will help incorporate non-profit organizations into the private prison industry. This will ensure that profits realized from the industry are reinvested in service improvement and expansion of the business rather than paid to stockholders. This will facilitate the optimization of private prisons as they will be of essence to the public, government and more so to the criminal justice system.

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