Prison cost minimization

The usual argument against privatizing prisons, at least in the econ literature, is that incomplete contracts combined with profit maximization gives prisons too strong of incentives to cut costs by worsening conditions for prisoners.

And so I was more than a bit surprised to hear this on Radio NZ this morning:

Mt Eden prison operator Serco is accused of bribing inmates with double-size meals and LCD televisions in their cells, so they are less likely to cause trouble.

The Corrections Association, the main prison officer's union, says that in addition to larger meals, Serco serves dessert every night, which is unheard of in the State prison system.

Association president Beven Hanlon says these ''luxuries'' allow Serco, a private operator, to get by with a skeleton crew.

But he says guards are feeling vulnerable and are leaving on a daily basis.

In a statement, Serco says the LCD televisions are small and must be paid for by the inmates.

The company won't directly respond to the other claims, but says the quantities of food served and the number of officers employed are both appropriate.

Yup, you heard that right. The private prisons here are accused of being too cushy: they've found that actually treating inmates well makes it easier to guard them.

Morning Report had the Sensible Sentencing Trust representative bemoaning that the nicer prisons aren't punitive enough - that harsher prisons are needed to teach inmates a lesson. Well, what literature we have on that suggests rather the opposite: harsher prisons correlate with increased likelihood of recidivism.

And so New Zealand's private prisons may be doing well by doing good.