IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v67y2020ics0927537120301123.html

Do privately-owned prisons increase incarceration rates?

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927537120301123
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.labeco.2020.101908?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Garrick L. Percival, 2010. "Ideology, Diversity, and Imprisonment: Considering the Influence of Local Politics on Racial and Ethnic Minority Incarceration Rates," Social Science Quarterly, Southwestern Social Science Association, vol. 91(4), pages 1063-1082, December.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Richard J. Kish & Amy F. Lipton, 2013. "Do Private Prisons Really offer Savings Compared with their Public Counterparts?," Economic Affairs, Wiley Blackwell, vol. 33(1), pages 93-107, February.
    4. James E. Alt & David Dreyer Lassen, 2014. "Enforcement and Public Corruption: Evidence from the American States," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(2), pages 306-338.
    5. John Komlos, 2018. "The Economic Roots of the Rise of Trumpism," CESifo Working Paper Series 6868, CESifo.
    6. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 319-351.
    7. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
    8. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
    9. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
    10. Lundberg, Alexander, 2016. "Sentencing discretion and burdens of proof," International Review of Law and Economics, Elsevier, vol. 46(C), pages 34-42.
    11. Ehrlich, Isaac, 1982. "The optimum enforcement of laws and the concept of justice: A positive analysis," International Review of Law and Economics, Elsevier, vol. 2(1), pages 3-27, June.
    12. Polinsky, A. Mitchell & Shavell, Steven, 1984. "The optimal use of fines and imprisonment," Journal of Public Economics, Elsevier, vol. 24(1), pages 89-99, June.
    13. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    14. Mitchell Polinsky, A. & Shavell, Steven, 1982. "Pigouvian taxation with administrative costs," Journal of Public Economics, Elsevier, vol. 19(3), pages 385-394, December.
    15. Jesse M. Shapiro, 2007. "Do Harsher Prison Conditions Reduce Recidivism? A Discontinuity-based Approach," American Law and Economics Review, American Law and Economics Association, vol. 9(1), pages 1-29.
    16. Magnus Lofstrom & Steven Raphael, 2016. "Crime, the Criminal Justice System, and Socioeconomic Inequality," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 103-126, Spring.
    17. D’Amico, Daniel J. & Williamson, Claudia, 2015. "Do legal origins affect cross-country incarceration rates?," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 595-612.
    18. Andrew F. Daughety & Jennifer F. Reinganum, 2000. "Appealing Judgments," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 502-526, Autumn.
    19. Stéphane Mechoulan, 2011. "The External Effects of Black Male Incarceration onBlack Females," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 1-35, January.
    20. James Andreoni, 1991. "Reasonable Doubt and the Optimal Magnitude of Fines: Should the Penalty Fit the Crime?," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 385-395, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Per G. Fredriksson & Stephan Gohmann & Khawaja Mamun, 2009. "Taxing Under the Influence?," Public Finance Review, , vol. 37(3), pages 339-365, May.
    2. Bedard, Kelly & Helland, Eric, 2004. "The location of women's prisons and the deterrence effect of "harder" time," International Review of Law and Economics, Elsevier, vol. 24(2), pages 147-167, June.
    3. Roee Sarel, 2022. "Crime and punishment in times of pandemics," European Journal of Law and Economics, Springer, vol. 54(2), pages 155-186, October.
    4. O’Flaherty, Brendan & Sethi, Rajiv, 2015. "Urban Crime," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1519-1621, Elsevier.
    5. Levitt, Steven D, 1998. "Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 353-372, July.
    6. Pallab K. Ghosh & Gary A. Hoover & Zexuan Liu, 2020. "Do State Minimum Wages Affect the Incarceration Rate?," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 845-872, January.
    7. Jonathan Klick & Alexander Tabarrok, 2010. "Police, Prisons, and Punishment: The Empirical Evidence on Crime Deterrence," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 6, Edward Elgar Publishing.
    8. Kenneth Avio, 1998. "The Economics of Prisons," European Journal of Law and Economics, Springer, vol. 6(2), pages 143-175, September.
    9. Cheng, Chu-Chuan & Lai, Yu-Bong, 2012. "Does a stricter enforcement policy protect the environment? A political economy perspective," Resource and Energy Economics, Elsevier, vol. 34(4), pages 431-441.
    10. Nicolas Marceau & Steeve Mongrain, 1999. "Dissuader le crime : un survol," L'Actualité Economique, Société Canadienne de Science Economique, vol. 75(1), pages 123-147.
    11. Kessler, Daniel P & Levitt, Steven D, 1999. "Using Sentence Enhancements to Distinguish between Deterrence and Incapacitation," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 343-363, April.
    12. Matteo Rizzolli & Margherita Saraceno, 2009. "Better that X guilty persons escape than that one innocent suffer," Working Papers 168, University of Milano-Bicocca, Department of Economics, revised Jul 2009.
    13. Levitt, Steven D., 1997. "Incentive compatibility constraints as an explanation for the use of prison sentences instead of fines," International Review of Law and Economics, Elsevier, vol. 17(2), pages 179-192, June.
    14. Rasmusen, Eric, 1995. "How optimal penalties change with the amount of harm," International Review of Law and Economics, Elsevier, vol. 15(1), pages 101-108, January.
    15. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    16. Scott Gehlbach & Konstantin Sonin & Ekaterina Zhuravskaya, 2010. "Businessman Candidates," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 718-736, July.
    17. John Morgan & Felix Várdy, 2011. "On the buyability of voting bodies," Journal of Theoretical Politics, , vol. 23(2), pages 260-287, April.
    18. Randi Hjalmarsson, 2009. "Juvenile Jails: A Path to the Straight and Narrow or to Hardened Criminality?," Journal of Law and Economics, University of Chicago Press, vol. 52(4), pages 779-809, November.
    19. Deniz Igan & Prachi Mishra & Thierry Tressel, 2012. "A Fistful of Dollars: Lobbying and the Financial Crisis," NBER Macroeconomics Annual, University of Chicago Press, vol. 26(1), pages 195-230.
    20. Entorf, H. & Winker, P., 2008. "Investigating the drugs-crime channel in economics of crime models: Empirical evidence from panel data of the German States," International Review of Law and Economics, Elsevier, vol. 28(1), pages 8-22, March.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/labeco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.