Chapter 3 Privatising military prisons: The case of the United States

• Published date: 08 July 2010
• Pages: 31-51
• Date: 08 July 2010
• DOI: https://doi.org/10.1108/S1572-8323(2010)0000014007
• Author: Aditya Agrawal,Keiran Sharpe

CHAPTER 3

PRIVATISING MILITARY

PRISONS: THE CASE OF

THE UNITED STATES

Aditya Agrawal and Keiran Sharpe

ABSTRACT

Purpose – This chapter aims to contribute to the policy debate on private

sector involvement in traditionally core defence activities through rigorous

economic analysis. Punishment and correction in the US military prisons

have traditionally been considered as a core activity that has been

governed, regulated and managed by the military service personnel. It has

been shown however, that military facilitiessuch as stockades and brigs

have often failed to meet their correctionalobjectives – a quality issue.

Methodology – The chapter constructs a case study to illustrate the

method of analysis. Well-trained and motivated military custodial

personnel play an important correctional role but are not available in

suff‌icient numbers in military prisons. It is therefore proposed to source

these services through the private sector. Specif‌ically, the chapter proposes

that private sector providers should provide custodial personnel for

stockades and brigs. Traditionally the private sector has been employed to

reduce costs, rather than improve quality. This chapter adapts and applies

the framework developed by Hart, Shleifer and Vishny (1997) to study the

governance model and incentive regime that could enable the use of the

Economics of War and Peace: Economic, Legal, and Political Perspectives

Contributions to Conf‌lict Management, Peace Economics and Development, Volume 14, 31–51

Copyright r2010 by Emerald Group Publishing Limited

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ISSN: 1572-8323/doi:10.1108/S1572-8323(2010)0000014007

31

private sector, reduce the risk of excessive cost cutting and enable quality

outcomes to be achieved.

Findings – This chapter argues that private sector involvement could

effectively increase the contestability of supply.

Implications – The chapter demonstrates the scope for private sector

involvement to increase quality, rather than just decrease costs. It follows

that the private sector can contribute to core national security outcomes.

However, this implication needs signif‌icantly more exploration for specif‌ic

contexts.

Value – The adopted mode of analysis provides a template for rigorous

analysis of similar proposals in the future.

INTRODUCTION

Contracting out civilian prisons to private service providers was a hot topic

during the privatisation debate inthe 1990s (Hart, Shleifer, & Vishny, 1997).

In the 2000s, the debate has focussed on using private military contractors

(PMCs)

1

in providing military services (Singer, 2008, p. 9, 53). This chapter

considers the scope for private sector providers tof‌ill the shortfall of custodial

personnel in military prisons and improve the quality of detention outcomes.

Specif‌ically, this chapter focuses on the detention of military prisoners (as

opposed to prisoners of war) and considers the detention of military personnel

in the US military correctional facilities: stockadesand brigs. This is because a

considerable amount of non-economic literature discusses various aspects of

military imprisonment by the US military. Furthermore, the US military

detention system has quality issues and the United States has led the way in

contracting out non-core activities to private military companies.

Traditionally, defence procurement has involved the private sector to cut

costs and increase eff‌iciency. Sectoral allocation of defence activities focuses

on cost-quality tradeoffs (Markowski & Wylie, 2009). Hart et al. (1997)

have developed a formal information economic theoretic approach to

studying the incentive structure in sectoral allocation decisions around the

cost-quality focus. This chapter adapts their f‌ixed price-based model to a f‌ixed

quality incentive contract situation and formally investigates the feasibility of

the proposed involvement. To our knowledge, PMC use in the contemporary

security environment has not been subjected to this form of economic incentive

analysis. The analysis concludes that a feasible incentive regime can be

ADITYA AGRAWAL AND KEIRAN SHARPE32