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DAVID POZEN

The private, nonprofit prison

AFTER DECADES of inaction, Congress is debating whether to pass America's first comprehensive plan for dealing with recidivism.

Studies have long shown that nearly two-thirds of former prisoners are rearrested for a felony or serious misdemeanor within three years of release. With nearly 650,000 prisoners released to communities each year, the social cost of this repeat offending is staggering. A bipartisan effort, the Second Chance Act contains a wide range of countermeasures, such as the creation of a national taskforce to identify best practices in reentry programs, repeal of the federal law denying college loans to applicants with drug convictions, and provisions for post-release mentoring, treatment, and housing grants to state and local governments. These reforms are commonsensical, and long overdue.

Another reform, nowhere mentioned in the Second Chance Act or the debates surrounding it, could go further: using private nonprofit organizations to manage prisons. This idea was developed by professor Richard Moran in 1997, and nothing much has happened since. The United States still has no adult prisons run by nonprofits.

Moran, and later legal scholar Daniel Low, make a forceful case for nonprofit prisons. Nonprofit operators, they argue, can provide the entrepreneurial spirit of for-profit operators without the latter's legal and ethical liabilities. Nonprofits can design and test new programs, with positive spillover effects for public prisons. They can save tax dollars through the use of volunteer labor and private fund-raising. Most hopefully, nonprofit prisons can do a better job at rehabilitation -- and therefore at reducing recidivism -- because of their mission focus, service ethic, and freedom from political or profit constraints.

Yet whatever the theoretical cogency of these arguments, one major problem has blunted their impact on policy: the absence of empirical support. Unlike at the adult level, however, America has many juvenile correctional facilities run by nonprofits, and new evidence from this population bears out the hypothesis that nonprofits can tackle recidivism more effectively than their public and for-profit counterparts.

In a study published in the latest issue of the Journal of Law & Economics, Patrick Bayer and I examined a sample of more than 5,000 juveniles released in a two-year period from correctional institutions in Florida. Florida proved an ideal site for the study because its Department of Juvenile Justice has been exemplary both in experimenting with nonprofit managers and in tracking offenders' post-release criminal behavior for up to a year. Because Florida keeps such good statistics, we were able to examine whether individuals released from public, for-profit, or nonprofit facilities were more likely to be rearrested and reconvicted.

After controlling for personal, institutional, and community characteristics that might affect releasees' propensity to reoffend, we found that nonprofit management led to recidivism rates 1 percent to 2 percent lower than public management and 6 percent to 8 percent lower than for-profit management. (If a few percentage points does not sound like much, recall that there are around half a million recidivism arrests made each year nationally.) These results held even if we looked only at higher-security facilities.

Nonprofits also cost the state of Florida significantly less than public prisons. For-profits were cheaper still, yet even under highly favorable assumptions their short-run savings were reversed within several years because of the costs of increased recidivism.

Can these results be extrapolated to the adult level? Juvenile correctional facilities are, no doubt, different from adult ones. And more empirical work needs to be done. But the study suggests that nonprofits can play a useful role in combating recidivism, and not just at the low-security end. Indeed, nonprofits may add more value at the adult level than at the juvenile level, as the rehabilitative and quality-of-confinement failings of adult public and for-profit prisons have been more dramatic.

Our study, and the example of the annual recidivism ratings in Florida, also suggests a method for holding prisons accountable for their recidivism performance. With such a system in place, the risk of for-profit prisons having perverse incentives to stimulate more recidivism would be minimized; instead, their profit motive would be enlisted in the fight to reduce repeat offending. Nonprofits would likewise have powerful new incentives to lower recidivism: maintaining their contracts and reputations would depend on it. Corrections departments would no longer need to prescribe rehabilitative strategies, but could leave it up to the prisons to figure out what works.

There's one hitch. Given for-profit prisons' systematically worse recidivism performance in our study, one might be worried they will never be able to rise to the challenge. If we want a private sector role in the correctional system, then, nonprofits may be the only attractive option.

Experimenting with nonprofit operators would be a low-cost, low-risk solution. The idea has stalled in the shadow of for-profit privatization; now we have empirical evidence that nonprofit prisons can work and, with the Second Chance Act, a unique opportunity to rethink prison reform. We should think big -- and different.

David Pozen, a student at Yale Law School, is a member of the school's Nonprofit Prison Project.

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